Quarterly Newsletter Fall 2018
A public adjuster (“PA”) is a person who investigates or reports insurance claims and acts on behalf of the insured during the claim process. Similar to many states, a PA must be licensed in Washington. When acting on behalf of the insured, a PA may make representations to the insurer that may be relied upon during a claim and coverage investigation. The issue of whether an insured is bound by the PA’s representations acting on the insured’s behalf is an unresolved issue in Washington. However, in Reverse Now VII, LLC v. Oregon Mut. Ins. Co., 2018 WL 3373977, C16-209-MJP (W.D. Wash. July 11, 2018), Judge Pechman in the United States District Court for the Western District of Washington held, as a matter of first impression, that a PA’s material misrepresentations could be imputed to the insured.
The case arises out of an insurance claim for fire loss at an apartment complex owned by the plaintiff and insured by Oregon Mutual. Oregon Mutual accepted coverage and retained an independent adjuster (“IA”) to investigate the scope of repairs and adjust the loss. The insured retained a PA. The IA and PA worked on a scope of repair, but got into a disagreement about certain issues, in particular, whether the exterior siding could be repaired or whether it required complete replacement. The insured decided to enter the appraisal process to resolve the dispute. The PA selected Randy Gower as its impartial appraiser. Oregon Mutual selected Gary Halpin as its impartial appraiser. The appraisal process concluded with a panel finding that Oregon Mutual owed an additional $188,544.23 for repairs. Oregon Mutual paid the balance shortly thereafter.