When a claim becomes a nightmare and the policyholder has, unsuccessfully, exhausted every avenue to settle their claim, it's time to seek outside help. At this point, the policyholder needs to carefully weigh all options, including legal recourse.

Oftentimes, policyholders jump the gun and threaten to retain legal counsel before the insurer denies the claim. Don't do this. Keep your cool and be smart like a fox.

Once an insurance company knows you are represented by counsel, they are less likely to resort to blatant bad faith practices. Therefore, if you do retain counsel early on in the claims process, you may not want to disclose that fact until your attorney feels the time is right.

IT'S TIME TO RETAIN AN ATTORNEY, IF:

1. Your file is documented with communiqués, daily logs and tapes of conversations that show a pattern of bad faith even after your written insistence that the claim be handled properly;

2. The insurer has, without merit, denied your claim;

3. The insurer has not paid a reasonable amount for necessary repairs and is clearly attempting to escape further payments;

4. A statute of limitations is nearing. These statutes vary greatly from state to state. In some instances the law requires a claimant to notify potential defendants about any injury within an extremely short period of time - as little as a few weeks or months;

5. When you have suffered a monetary damage; and/or

6. When the insurance company refuses to make any more payments for the loss.

It's important to note that many attorneys will not review a case if the insurance company's actions (or inactions) have not YET resulted in monetary damages. Many attorneys will only review a case once monetary damages have actually occurred. While delay tactics and inadequate payments for repairs are upsetting and often result in additional damage, these actions do not always result in actual damages. That's not to say that the insurance company is acting in good faith when it chooses this path. This just means that certain attorneys will not have an interest in a case until actual monetary damages have occurred.

Remember, once your insurance company knows you have retained counsel, all direct communications between you and the insurance company will end as will your opportunities to tape conversations with the adjuster and insurance company-retained experts involved with your claim.

There's no glamour in having to retain counsel. If you think that it's fun and games, you're wrong. It's expensive and a lawsuit is all consuming. But, sometimes it's a policyholder's only recourse.

TIPS ON HOW TO RETAIN AN ATTORNEY:

1. Get several referrals from other policyholders and/or friends. Do not consider internet chat rooms or message boards to be reliable attorney referral resources;

2. Make sure there is no conflict of interest with any attorney you are considering BEFORE you spill your guts about your case to them;

3. Get a handle on exactly what you are trying to achieve. Your goals may or may not be realistic and only discussions with various attorneys can help you determine realistic goals;

4. Know the risks involved. There's no such thing as a guarantee: Ask about possible outcomes and what other alternatives are available to you (mediation, arbitration, Appraisal Process);

5. Have a face-to-face interview with any attorney you are considering. Ask him/her what type of approach they feel appropriate for your case (aggressive or more passive). Ask yourself: Would this attorney make a good first impression to a jury? Do I feel comfortable with this attorney? Also, do a little internet research on any attorney you are seriously considering. There are legal searches (www.martindale.com) that can provide rating information;

6. Ask the attorney to provide you with fee options for both hourly and contingency rate agreements and/or a combination of the two. Contingency fees range from 30 - 40%, typically. Negotiate, if possible, your fee agreement and insist that hours expended on your behalf (if not a contingency arrangement) and out-of-pocket expenses (whether or not its hourly or contingency) be itemized on monthly statements;

7. Ask the attorney to estimate, as best he or she can, the out-of-pocket expenses (and hourly costs, if an hourly rate applies) associated with your case and how long it might take to conclude your case;

8. Ask the attorney to provide you with options for paying out-of-pocket expenses (if the attorney is to absorb these costs, the contingency fee will be much higher);

9. Ask the attorney to tell you about some of his/her experience with similar cases. They may not be able to go into too much detail because of client/attorney privilege but get an overall idea of successes and failures. If the attorney tells you about some failures, ask them what they would have done differently;

10. Ask the attorney if he/she has the time and resources (staff, financial, etc.) to pursue your case aggressively. Also ask who at the law office will be your primary contact and introduce yourself to him/her and exchange numbers and email addresses. Ask if other attorneys and/or paralegals will be working on your behalf - meet all of them;

11. Ask the attorney to provide names of experts he or she may consider using in your case and ask others about these experts and their trial record; and

12. Set some ground rules with the attorney. Let him/her know what you expect and ask what is expected of you. Be sure the two of you can live with those expectations.

ONCE AN ATTORNEY HAS BEEN RETAINED, KNOW THE RULES OF PROFESSIONAL CONDUCT

Attorneys have high standards and certain duties that they must uphold: Privileges, ethics and rules of professional conduct. Your lawyer must represent you ethically, zealously and within the bounds of the law.

Some basic ethics and professional rules include:

1. Your lawyer must competently analyze legal issues and exercise knowledge of the law applicable to your case.

2. He or she must communicate with you in a timely and effective manner.

3. Your attorney owes you, as the client, a duty of loyalty.

4. Your lawyer can't simultaneously represent you and another client with legal interests that conflict with yours. An example of an obvious conflict would be representation of both the insurance company and policyholder for the same claim.

5. Your lawyer is required to follow your directions in handling your case unless those directions are illegal.

6. Your lawyer must keep your personal property separate from his or her own property, and must keep your money in an escrow account. Any time you demand it, your lawyer must return your money or property.

7. Your attorney may have other responsibilities to you, depending on your case and the ethical rules that apply in your jurisdiction.

Your discussions with your attorney are confidential. When you speak with an attorney about a legal matter, your communications with that attorney are privileged. This means that subject to some very limited exceptions, and unless you grant permission, your attorney can't disclose to a third party any information that you provided. However, be sure not to copy others (experts, other witnesses, etc.) on communications with your attorney. If you do, you may open the door for all communications between you and your attorney to be considered not confidential.

And, for Pete's sake, don't post information about your case, advice given by your attorney, discussions with experts or any other facts about your case on the internet. Insurance companies monitor most of the major message boards used by policyholders and will use what they read against you. And, if your experts are posting on message boards to solicit business, get rid of them. This is viewed by credible attorneys as the kiss of death.

The selection of the right lawyer is the most important decision you will make. If you select the wrong one and he or she is working on a contingency fee arrangement, you are almost stuck with them, regardless of the job they are doing for you. Simply put, if you fire a contingency-based attorney, they will have a lien on your case and that will make your case unmarketable to any other attorney.

With the help of other plaintiffs and certain legal associations, we prepared a list of attorneys for your consideration. This list will be reviewed monthly and changes will be made.

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