Steven Badger on LinkedIn: Every single day.... Today's example is from a Facebook forum called… | 118 comments (2024)

As I said yesterday, every single day....Check this one out: https://lnkd.in/gCmEf-6B It is something called the "Insurance Claim College". This intro tells the whole story....~~~After signing up on our roster, you will be enrolled into our adjuster training program.Training is free. The only caveat is that you have to find the homeowners with claims so you can get experience handling claims. We focus on finding denied and underpaid claims to train on there are more than you can imagine.This allows you to see the mistakes other adjusters make because they didn't go through this training.As you learn how to start the claims process you will be partnered with a field adjuster who will show you how to scope and estimate a loss properlygiving you the experience you need.The training program also rewards you financially for your efforts.Our enrollees get $200 for each successful claim.Those who go on to operating their own claims business will average $1,000-$2,000 for eachCatastrophic adjusters average $5,000 or more per paid claim.~~~So let me get this straight. Independent adjusters are going to get trained in this college by trolling neighborhoods for "denied and underpaid claims". Presumably, these claims will then be sent to a public adjuster to pursue, and the independent adjuster will then get to "see the mistakes other adjusters make" and, therefore, become better adjusters themselves. And best of all, the independent adjuster gets $200 for each claim they find to get trained on.Oh, where do I begin.Let's begin by talking about legality. In Texas, this model is 100% improper. Under 4102.155, public adjusters cannot use unlicensed individuals to solicit business for them. And that's clearly what is going on here. Further, under 4102.160(2), public adjusters cannot pay an unlicensed persons any type of compensation for bringing them clients. No denying that is the program here.I guess I have to admire the creativity....

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Frequent readers of my posts all know the three things I do to begin every morning. One of them is to read Chip Merlin's excellent blog while at a particular location.https://lnkd.in/g5pn34ZEYes, I just did those three things this morning, like every morning. As I read Chip's blog this morning, I saw that it opened with this line….~~~Good ole insurance defense attorney Steven Badger is going to love reading this post while sitting on his Royal Throne~~~No. I didn’t love reading this post.Was I happy to see yet another loss for Houston policyholder attorney Eric Dick?Sure. A well-deserved loss and more good case law on appraisal burdens for my Texas insurance company clients.But besides for that truly shallow satisfaction, the entire situation makes me angry - angry as to what Texas insurance companies are having to deal with in defending meritless lawsuits like this. Even moreso, however, it makes me sad for the Texas homeowners who are signing up for representation by Mr. Dick. These homeowners are obviously lured into his office by his low-brow billboards and television commercials using the catch phrases: “Need A Lawyer. Hire A Dick” or “Better Get Dick” or “I Love Dick” or “Can’t Lick This Dick”. You can even go on his website and buy merch with these slogans and his photo.I am receiving calls almost every week from former clients of Mr. Dick who are alleging that their cases were dismissed for want of prosecution, that he cashed their settlement checks and they never got their money, and other sad tales of woe. A simple Google search will reveal a lawsuit I filed against him a few years ago alleging this type of conduct. And another one is coming very soon.[Interestingly, now splashed at the top of his website is this line: “NOTICE: ALL CHECKS ISSUED BY DICK LAW FIRM MUST BE VERIFIED BY ROBBIE FREDERICK, DEANNA DICK OR ERIC DICK.”Well, there's gotta be a good back story there.]There is a long list of lawyers who have come and gone in the Texas first-party property insurance world – Kent Livesay who was convicted of insurance fraud in hail lawsuits, Zach Moseley whose day of reckoning is surely coming, and many others.All of these lawyers left a trail of destruction in their path.What is it about the first-party policyholder litigation world that attracts these types of lawyers and their unprofessional conduct? And most importantly, how do we bring an end to it?Not only for the benefit of my insurance company clients, but more importantly to protect the Texas homeowners they purport to represent.

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Anyone care to enlighten me as to why a contractor would offer a price discount to the homeowner when the roof is being paid for by the insurance company? Seems the only winner in that deal is the insurance company.

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Everyone who has heard me speak about appraisal knows that I despise the practice of seeking unilateral umpire appointments. Might it comply with the literal language of the policy? Perhaps. But I also believe that it is contrary to the overall intent of the appraisal process (a cooperative process to resolve disputed claims), it is unethical if an attorney does it (ex parte communication with a court), and it is just plain bush-league (only the bottom-feeder lawyers who cant operate fairly on a level playing field do it).I am glad to see that Chip Merlin agrees. Every reputable policyholder attorney should agree.But, sadly, some policyholder attorneys still engage in the practice. I have written previously about a case pending in federal court where the policyholder attorney obtained a unilateral umpire appointment, not from the federal judge hearing the lawsuit, but instead from a state court judge 300+ miles away who just so happened to be married to a public adjuster. We also received notification of one in Forth Worth just a couple weeks ago.There is no room for these types of games in the appraisal process. You wonder why appraisal clauses are getting rewritten and are now two pages long? Here is one of the reasons.Hopefully this is an issue we can all agree on. Let's all call out the schemers engaging in this unfortunate practice (on either side) and tell them to knock it off.https://lnkd.in/ggkYH-fQ

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Credit to Chip Merlin for using his blog today to expose one of the dirty schemes taking place on the policyholder advocate side…..Chip's Blog Link: https://lnkd.in/gKhsZS7MHere is the back story…MMA (McClenny Moseley) hired estimating company PCG Claims (PCG) to write estimates for its Louisiana hurricane claims. PCG charged MMA over $9 million for this work. The PCG/MMA agreement provided that PCG would get paid “$250 an Hour, not to exceed 5% of the recovered property settlement.”PCG agreed it would be paid upon MMA "collecting and deposit any or all of its entitlement to attorneys' fees and costs." This obviously made PCG's compensation contingent on a recovery in the lawsuit.To finance its operations pending settlement of the lawsuits, PCG turned to ClaimPay for “factoring” of its receivables.ClaimPay gave money to PCG in exchange for a piece, with a near 20% surcharge, of the receivable from MMA.And you can guess what happened next.MMA falls apart.MMA no longer is pursuing the cases. The estimates become essentially worthless.PCG is suing MMA for its $9m (lawsuit attached).And now ClaimPay is suing PCG to recover its factoring payments.Chip saves the most important paragraph of his blog until the end…~~~One final note: The estimating company was providing its services to MMA on an hourly basis, not to exceed a certain percentage of the recovered amount. I am certain that insurance defense attorneys will note that this type of arrangement will generally disqualify the estimator from being able to provide an expert opinion because there is a contingent element to it. Thus, the estimates provided in this case were essentially worthless to everybody.~~~Chip is right.The estimator had an interest in the amount of the final claim settlement.And, obviously, the amount of the claim settlement was in part dependent on the amount of the damages claim, which was based on the PCG estimate. The higher the estimate, the more PCG stood to make.That creates a huge credibility problem for the estimator at trial.It also creates an ethical issue for the lawyer.In Texas, it is an ethical violation for a lawyer to retain an expert on a contingency fee basis.Was this MMA/PCG/ClaimPay arrangement an isolated incident?Is this arrangement common in the industry on the policyholder side?Yes, this insurance industry defense attorney is interested in learning more about this type of arrangement amongst policyholder attorneys and their estimators (or other consultants). Who can tell me more?

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My post last week about insurance companies invoking the right to repair clause and use of preferred contractor programs generated a lot of comments.Not surprisingly, most of the negative comments came from those with the most to lose when such programs are used--public adjusters and storm chasing contractors (at least the contractors who refuse to work cooperatively with insurance companies).Coincidentally, I saw two news articles last week that illustrate why insurance companies have been left with no choice but to move in this direction or, even worse, stop writing policies as cost savings measures.The first article talks about how hard it has become for churches to obtain insurance:https://lnkd.in/gDE7MaKBThis comes as no surprise to me.The worst abuses I see in my litigated claims typically involve churches and school districts .My clients pay tens of millions of dollars each year to settle church and school district lawsuits alleging claims of very questionable damage and various other bogus schemes.The second article reports that Progressive Insurance has completely stopped writing policies in Texas and other Midwest states:https://lnkd.in/ghwiwj9AWhy?Because of the hail exposure.So?I ask all of you complainers: If you don’t like what's happening out there -- preferred contractor programs, increasing deductibles, ACV only coverage, etc. -- what other solutions do you have to address the climate risk crisis?Something has to change.And we aint gonna stop it from hailing in Texas.Here’s an idea.I’ve raised this before--Is it time for all roofs installed in Texas to be rated Class 4 Hail Resistant

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A well-respected policyholder attorney sent me a policy endorsem*nt yesterday that she had just read in a potential new matter she was reviewing.She said:“Badger, what the hell is this?It says my client has to use a contractor selected by the insurance company.That isn’t right. That cant be enforceable.Do your clients really want to get into the construction business?”My response:“Yep. I’ve been telling everyone on your side for several years that this is coming.It is absolutely enforceable.”And it is no longer coming.It is here.This week alone I have had four conference calls to discuss preferred contractor/right to repair programs.Two with insurance companies considering these programs and two with contractor groups creating programs marketed to insurance companies.I’m being asked to draft policy endorsem*nts creating these programs. Contractors are calling me regularly asking if I can get them in with my clients under these programs.Yes, it’s a monumental shift from the previous insurance company mindset of staying out of the repair world.Insurance companies loathed invoking the right to repair. That mindset has changed.Insurance companies have realized that the manageable risk of a contractor putting on a bad roof is far less than the ongoing battles with contractors in fighting over, appraising, and litigating the cost to install a roof that the insurance company has agreed to pay for.It is far easier, and less expensive overall, to just either invoke the right to repair (already in the policy) or use a “Preferred Contractor Program Endorsem*nt” (added to the policy) to require the insured to use a contractor selected by the insurance company.If that contractor screws up, it will have insurance that names the insurance company as an additional insured. And lets all be honest, the number of roofs poorly installed under these programs will be far far far fewer than the number of appraisals and lawsuits the insurance company has to deal with right now involving contractors inflating their pricing so they can “win the storm” on every claim.Speaking of which, five years ago I spoke for the first time at the Win the Storm Conference. In front of a couple thousand storm chasing contractors, I actually read them a short book--The Goose That Laid The Golden Eggs. I told the large audience of contractors -- all of whom were there to learn how to fleece more money out of insurance companies in storm claims -- that they were indeed killing their golden goose.That day is now here. They killed their golden goose.Watch for a Preferred Contractor Program Endorsem*nt in the next policy you review.

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Last week I posted about a company that was sending "invoices" to policyholder clients previously represented by convicted felon public adjuster Drew Aga/Mitchell. Here is the post: https://lnkd.in/dPS8zUVEI copied the Texas Department of Insurance on my post with the hope they would take action to stop this. And they did.I heard from the TDI today advising that the letter below was going out to everyone who had received an invoice. While the letter is still a little wishy-washy, it is a big step in the right direction.Thanks to the TDI for stepping in and taking action to prevent further victims of the very sad Aga/Mitchell debacle.

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“Badger, the insured’s appraiser is clearly biased, when should we object to him?”I hear this question often.There are two possible answers….A. Wait until after the appraisal award comes out and if its not favorable then you can object.B. Immediately. So what’s your answer?This is an easy one for me -- “B”. The problem with waiting is that if you object after the appraisal award comes out, it just looks like sour grapes.You're mad that you lost and are looking for a way out of the award. Plus, you have wasted everyone’s time and money in conducting an appraisal process with a biased appraiser (assuming you are right).The only argument I hear supporting waiting is that you would be “interfering in the appraisal process” by objecting now. That’s silly.You always have the right to ensure that the appraisal process is being conducted in accordance with policy terms. Any breaches of the appraisal clause should be raised when you become aware of them.Conversely, by objecting as soon as you have evidence of bias you provide the other side with an opportunity to do the right thing and pick someone else. It’s just the better approach.And I am glad to see that the 11th Circuit Court of Appeals agrees (Florida case). In Biscayne Beach vs. Westchester the court held that the insurance company waived its right to object to the appraiser by waiting until the appraisal process was completed. The right time to object is when the party receives information supporting an alleged bias. Opinion attached.So if you are up against a biased appraiser, on either side, dont hesitate to raise your objection.

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