Unpaid Invoice

Q: "A lender client has not paid my bills for a report I did a year ago. They say the value was no good. They were supposed to pay me $10,000 in 4 installments of $2,500. They paid me $5,000 but still owe me the rest. Will my insurance company help me file a lawsuit to collect the fee?"

A: Unfortunately, your insurance policy only provides coverage if you get sued for a covered claim. The carrier will not hire counsel to collect an unpaid fee. You could consider filing a case on your own in small claims court. There are a few simple forms to be completed and you will have to show up in court for the "trial" to argue your case. You can probably handle this without an attorney, but you should check with your local small claims court and carefully look over the rules. You should also think twice about filing this collection action because such activity often leads to a cross claim back against the appraiser, alleging negligence. You claim the client refused to pay because he was not happy with the value. The client might allege that the report was prepared in a negligent manner. It can be a bitter pill to swallow, but sometimes the better way to go is to write off the bad debt. It could wind up costing you a lot more if an E&O claim is made.

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