Hurricane Claims & Fraud: Mediation Vs. Hiring An Attorney

UPDATED: Jul 14, 2023Fact Checked

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Jeffrey Johnson

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Jeffrey Johnson is a legal writer with a focus on personal injury. He has worked on personal injury and sovereign immunity litigation in addition to experience in family, estate, and criminal law. He earned a J.D. from the University of Baltimore and has worked in legal offices and non-profits in Maryland, Texas, and North Carolina. He has also earned an MFA in screenwriting from Chapman Univer...

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UPDATED: Jul 14, 2023

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UPDATED: Jul 14, 2023Fact Checked

Many state insurance departments have created state sponsored mediation as a way to resolve insurance claims without filing a lawsuit against your insurance company. Many of the cases involve hurricane fraud, where an insurance company has acted in bad faith by delaying or denying payments. There are pros and cons to each method, but which is better for you?

What is state sponsored mediation?

Florida’s Department of Financial Services (the state’s insurance department) has set up hotlines where you can call and voice your complaints or address what you perceive to be insurance fraud on the part of the insurance company, according to R. Jason Richards, a Florida attorney whose firm represents victims of hurricane fraud and bad faith insurance practices. He says that in Florida, and other states such as Mississippi, they’ll provide pro bono attorneys who can assist you with your claim and state sponsored mediation. He told us:

It’s a good way to get your issues resolved without having to file a lawsuit. They do that specifically for the reason of trying to avoid an influx of litigation and resolve claims through the mediation process. They’ve done a good bit recently especially after the hurricanes in 2004. There were so many of them here in Florida that they took some action to try to get those cases resolved without flooding the courts with lawsuits. It’s not required, but it can work and is a good program for some people.

Is hiring a lawyer better?

When should someone use state-sponsored mediation versus contacting an attorney? Richards says that it depends on the type of claim and the conduct of the insurance company. He explained:

If it’s just a straight undervaluation of claim case where the adjuster is giving you X amount of money, but the contractor says that it’s going to cost a lot more than that, then that type of case may be more ripe for mediation. That being said, it’s important to understand that when you go to mediation, you’re on your own and you generally don’t have an attorney there.

So, you have to understand what you’re doing at the mediation. If it gets a little bit complicated or requires some expert testimony to determine a wind / flood issue, or you need to hire an adjuster to argue your side, then you may want to bring in an attorney.

However, the impartial mediator at a state sponsored mediation may help you, the policyholder, in a sense. He or she may walk you through the process and hold your hand a bit. If you can go through the state mediation process and you’re comfortable with the resolution that’s been offered, then it benefits you to the extent that then you don’t have to pay any attorney fees out of your recovery. However, if you’re unsatisfied with the amount the insurance company is offering at the mediation, then you can always contact an attorney at that point.

An unfortunate, but common, reality

Richards says that while mediation certainly can be good in some situations, he told us that it is often ripe with an unfortunate, but common, reality. He explained:

Unfortunately, what we’ve found is that sometimes at the state sponsored mediations, the insurance companies come into those proceedings without the intent of offering any money of significance. So it can sometimes be a waste of time for the policyholder because the insurance company didn’t really plan on changing their position, so they end up having to hire an attorney anyway and they’ve wasted their time by going to mediation, taking off work and everything else hoping to get a resolution.

Case Studies: Hurricane Claims & Fraud

Case Study 1: State-Sponsored Mediation – Resolving Insurance Disputes

When John encountered delays and denials from his insurance company, he became frustrated and sought an alternative solution. Turning to state-sponsored mediation, John enlisted the assistance of a pro bono attorney. Through this collaborative process, John successfully resolved his claim, effectively avoiding the need for litigation.

Case Study 2: Engaging an Attorney for Insurance Matters

Sarah found herself in a situation where her insurance company undervalued her claim following a devastating hurricane. Recognizing the need for expert guidance, Sarah decided to hire an attorney. With the attorney skillfully presenting her case, Sarah achieved a fair settlement that accurately reflected the true value of her damages.

Case Study 3: Overcoming Challenges in State-Sponsored Mediation

Mark, too, opted for state-sponsored mediation to address his insurance concerns. However, he encountered an uncooperative insurance company during the process. Disappointed by this setback, Mark sought the expertise of an attorney who adeptly navigated the complexities of the situation. Through the attorney’s efforts, Mark ultimately secured a fair settlement, with state-sponsored mediation.

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Jeffrey Johnson

Insurance Lawyer

Jeffrey Johnson is a legal writer with a focus on personal injury. He has worked on personal injury and sovereign immunity litigation in addition to experience in family, estate, and criminal law. He earned a J.D. from the University of Baltimore and has worked in legal offices and non-profits in Maryland, Texas, and North Carolina. He has also earned an MFA in screenwriting from Chapman Univer...

Insurance Lawyer

Editorial Guidelines: We are a free online resource for anyone interested in learning more about legal topics and insurance. Our goal is to be an objective, third-party resource for everything legal and insurance related. We update our site regularly, and all content is reviewed by experts.

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