Maybe. But probably not if you suffer a property or casualty loss. Let’s first discuss a property loss such as a house fire. Do you need a lawyer in such as case? If you’re super wealthy and just don’t have time to work with your insurance company than a lawyer could represent you in working up your property settlement. But even then, lawyers charge more than Public Adjusters and do the same thing, so unless you feel you’ve been wronged and are looking to file a lawsuit against your insurance carrier (when you should seek representation) there just aren’t very many reasons to hire a lawyer for a property loss. When dealing with property claims, assuming that you have a standard policy from one of the large carriers who all have similar coverages, just ask yourself, are they paying me enough for me to rebuild so that you’ll be back to a pre-loss condition except for the deductible? Property losses shouldn’t usually require a release so if hidden damage is discovered such as during demolition, you can still re-open your claim. Plus, often times and especially large property losses, it’s not uncommon for the policyholder to already have a contractor and often your insurance company is going to work with that person to get an agreed repair cost. Property claims are more black and white… how many square feet of carpet? Are the walls painted or have wallpaper? Is your roof concrete tile or asphalt shingle? Lawyers don’t like black and white property claims because they are only worth a finite amount and insurance companies are good at calculating structural damage.
On the flip side, what about an injury claim? Maybe you were in an accident and it wasn’t your fault, or you tripped and fell at a business and for whatever reason they are negligent (maybe they had sub-standard maintenance issues). Here it’s a much finer line between should you or should not not seek legal representation. Here are some things to consider when making the decision. Are you an honest person? Like really… are you out to simply get reimbursed a reasonable amount for your medical costs and something for your pain? Or are you looking at this incident as a pay-day?
If you’re injured, it’s not serious though, you don’t “over-treat” just to rack up excessive medical bills in effort to inflate your claim, and in the end you’re realistic in your expectations, there is a good chance that your adjuster will appreciate this, calculate what they think your claim is “worth” and make you an offer to settle. This is your chance to negotiate. But think of it like this. If you went to the doctor once after the accident because you had general soreness for a couple days, didn’t miss any work, and that’s it, you can expect the adjuster to offer you money to reimburse your medical costs and maybe a hundred or two for your pain and suffering. That sounds kind of reasonable to me. If you counter and ask for $500 for pain and suffering, you likely won’t get it but maybe you can get another $50 or $100. The adjuster will appreciate you being in the range of reasonableness. However if they offer you $250 for pain and suffering and you ask for $10,000, you’re probably not being realistic. Keep in mind, your average injury adjuster has been doing this for many years and knows generally what claims are worth. No two claims are the same, but claims worth a few hundred dollars for pain and suffering look much different than claims worth $5,000. So do you need an attorney on these small injury claims? In the end you probably don’t because you’d have to get at least 33% more with an attorney than you would have otherwise to cover the cost of the attorney not to mention you’re now adding an unknown amount of time to the wait before you get your money. **Side note, if you have a small claim, maybe only worth a couple thousand or less, you may actually have trouble finding an attorney to take this type of case since there obviously isn’t a lot of money in it for them.
What about a an injury claim with a few thousand in medical bills related to the loss? This is kind of on the fence because it depends on how well you can negotiate direct with the insurance company and again, will hiring an attorney and losing 33%-40% of the settlement be made up with the larger settlement? Also consider, if you know your medial costs and you’re already starting to negotiate a settlement with the insurance company you might be looking a money in hand within days. Hire an attorney and you may not see money for six months or a year or longer. There is some value in getting paid less today vs. more in a year.
How about if you have significant, legitimate and obvious injuries? In this case you may be better off getting an attorney who can compile everything for your case and negotiate a higher settlement. Large claims is where the threat of filing a lawsuit carries some value for the attorney. Personal injury attorneys don’t want to file suit as it takes time and money and rarely, and only in truly extreme situations do they actually end up in court, but just the filing of a suit forces the insurance company to hire their own attorney to defend the suit and even if the insurance company “wins” they may end up “losing” due to legal costs. That’s why nearly all injury claims are settled before trial. Plaintiff attorneys would much rather negotiate a settlement so they get paid quicker (well… as fast as quicker can be when a claim is traveling at the speed of attorneys which isn’t very fast). I’m pretty claim savvy myself being an adjuster for nearly 20 years, but if I had a significant injury claim with lost wages, significant pain and suffering, possible long term medical issues, etc. I’d likely hire an attorney myself. But on the flip side if working with the other adjuster they acknowledge that they only have low policy limits such as $15,000 or $25,000 total, maybe I don’t hire an attorney since the realistic amount of the recovery is likely going to be capped as getting a judgement in excess of policy limits can be tough and take time. What good is a judgement in your favor if you can’t collect?
So at the end of the day, when you suffer a loss, should you get an attorney? It depends. Property claims… probably not. Injury claims… maybe. If you reach out to attorneys and they won’t take your claim because it’s too small or you’re obviously inflating your injuries to the point that it’s obviously fraud, that’s a good sign that you probably don’t need an attorney and should just do your best to negotiate with the insurance company direct. Middle range injuries, it may come down to how well you can present your damages and negotiate with the adjuster yourself. Serious injury claims where policy limits are high, it often will make sense.
A few other points, if you search in Google the question if you should hire an attorney following an injury, nearly all of the hits at the top will be from law offices who always say yes. They make money when people get hurt and happen to call them vs. the next guy. Personal injury attorney web-sites are filled with horror stories about the big bad insurance companies, telling you how evil insurance adjusters are and overall how insurance companies are out to screw everyone. The reality is that these are broad and somewhat dishonest claims lacking in true context. Another thing that attorneys always will tell a potential client is that they will make sure to get the insurance company to increase their settlement to account for possible future injury costs that may not be known at this time. The reality is that this is often a myth. It’s extremely rare for injuries to suddenly pop up years later that weren’t known prior yet are related to a specific loss long ago. Good adjusters won’t put any value into these type of claims. ATTORNEY: My client may discover in two years that their back didn’t fully heal so we want an extra $15,000 to account for this possibility. ME: I may get hit by a bus tomorrow. Should I just stay home on the off chance it happens?
And one last point, if you do need an attorney (or Public Adjuster on a property claim), there is nothing wrong with trying to negotiate their rates, especially if you have a larger value case. If an attorney says he charges 40%, it’s not unreasonable to simply ask if this rate is negotiable. If he or she says no… shop around as there are endless attorney’s who want to get a slam dunk case with a high pay-day. If they do negotiate, will they take 20%? Probably not. Are there some who will take 25%? Yea there are some who maybe would but also keep in mind that good work isn’t cheap and cheap work isn’t good. Competent and experienced attorneys probably can pass on a case if the party insists that they take significantly less than what they usually get paid. In the end, if you’re looking to hire an attorney 30%-35% isn’t unreasonable for a competent attorney to represent you, especially if you have a high value claim. If your claim is obviously going to be worth hundreds of thousands of dollars, it’s reasonable that the attorney would be willing to take a less than their normal rate if they know that they are looking at a huge pay-day. Just keep in mind, very often the attorney isn’t looking out for your best interest, they are looking to get the highest settlement possible in a reasonable period of time so they can bank their cut.
Questions or comments, don’t be shy.