Insurance Adjuster Liable for Misrepresentation

By Laurie Murphy

When a large tree fell onto the insureds' property and damaged their home, they did what any other homeowners would do - they called their insurance company.  The insurance company, Travelers, sent out an adjuster who took some photos and told the insureds that their policy did not pay for cleanup.  Though they asked for another adjuster, Travelers refused to appoint one.  Based upon the adjuster's representations to them, the insureds paid to clean up the mess themselves.  They then sued the adjuster for misrepresentation on the theory that they relied upon the adjuster in spending their own money to clean up the damage.  The insurer argued that an adjuster could never be sued individually for misrepresentation in the course and scope of his employment.  The trial court agreed, but the appellate court reversed finding that an adjuster who misrepresents the terms of an insureds' policy to their detriment can indeed sue the adjuster individually for misrepresentation.