Guest post by Chris Smith, Co-Founder of Deep Magic Marketing
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From record-breaking hurricanes and floods in the East to massive wildfires in the West, it’s been a hell of a year already. And with more storms brewing on the horizon — and climate models predicting increasingly extreme weather in our future — it’s easy to feel overwhelmed by the sheer size of disaster headed our way.
What keeps me out of the survival-bunker is: 1) I don’t own a survival bunker; and 2) I’ve witnessed the extraordinary human will to rebuild — and my job is to connect the ones harmed by disaster to the attorneys that power this resilience.
Why are attorneys needed at this moment? As the dial of disaster twists up to 11, insurance companies are starting to squirm. We saw the stories after Hurricane Sandy: thousands of homeowners and businesses left footing the bill for their destroyed property, even after years of paying for flood insurance. FEMA’s conservative estimate of Hurricane Sandy insurance claims which were wrongfully denied amounts to $390 million.
Aware of past catastrophe and savvy to insurance industry tactics, victims of the recent storms started filing for relief even before the rain stopped. But if history is any guide, hundreds or thousands of those affected by this season’s catastrophes will meet delays, underpayments, and denials from their insurance providers.
It’s been described as a war fought on two fronts: people trying to salvage their flooded, burned, and broken-down lives have to simultaneously take on massive insurance corporations. In this pinch, they often turn to public adjustors, considering the lawsuit route to be a ‘last ditch’ effort. But we at Deep Magic Marketing aim to educate disaster victims on the benefits brought by having an attorney.
The big one is a full, fair recovery. If policyholders have to fight to get the insurance relief they paid for, they deserve the full amount of that recovery – but a public adjustor can siphon off 5-20% of their award for their own wages (and higher amounts, in cases of price-gouging). However, in most jurisdictions, courts can order insurance companies to pay the plaintiff’s attorney fees in addition to the recovery amount. In many states this right is protected by statute.
And it’s not hard to see why. In a 2003 case before the Colorado Supreme Court, the justices noted:
“If the only damages an insurer will have to pay upon a judgment of breach are the amounts that it would have owed under the policy plus interest, it has every interest in retaining the money, earning the higher rates of interest on the outside market, and hoping eventually to force the insured into a settlement for less than the policy amount.”
Cary v. United of Omaha Life Ins. Co., 68 P.3d 462, 468 (Colo. 2003) (quoting Dodge v. Fid. & Deposit Co. of Md., 778 P.2d 1240, 1242-43 (Ariz. 1989)).
The Supreme Court of Appeals of West Virginia also put it bluntly, stating in Hayseeds v. State Farm that it didn’t matter whether the wrongful insurance denial was in good or bad faith: “In either case, the insured is out his consequential damages and attorney’s fees. To impose upon the insured the cost of compelling his insurer to honor its contractual obligation is effectively to deny him the benefit of his bargain.” Hayseeds Inc. v. State Farm Fire & Cas., 352 S.E.2d 73, 80 (W. Va. 1986).
These courts (and many others) recognize that the specter of legal fees is the only force keeping insurance companies accountable to their policyholders after a disaster. These policyholders often feel like they’re in a David vs. Goliath battle – but the court award of legal fees is their trusty slingshot.
Of course, the effectiveness of this method makes it a target for insurance industry lobbyists. Their efforts to blunt the power of plaintiff-side lawyers came in sharp relief in the middle of Hurricane Harvey flooding, when victims in Texas rushed to file lawsuits in the moments before a state-wide anti-policyholder law went into effect, which limited recoverable attorney fees if initial estimates of damage were less than 80% accurate.
But for now and in most places hit hardest by disaster, policyholders have a tremendous amount to gain by working with attorneys. And for attorneys seeking to expand their practice, these decisive moments are the perfect time for them to dive into action.
As a preferred partner with Filevine, we play match-maker with these two groups. We reach hard-hit communities with compelling and factual marketing about their options, and then steer them to the attorneys who can meet their needs.
We’re watching our customers grow their client base by simultaneously giving a community resilience in the aftermath of disaster. This is how we build societies – and law practices – that can weather the storm.