Chubb Challenges Unlicensed Adjuster’s Role in $1.77 Million Fire Claim Dispute
White Plains, NY, August 12, 2025 – Chubb, a leading global insurance provider, is embroiled in a legal battle over a $1.77 million fire claim, challenging the involvement of an unlicensed adjuster in the claims process. The dispute, centered on a 2006 fire at an 18th-century house in Lakeville, Connecticut, insured by Chubb’s subsidiary Federal Insurance Co., underscores broader concerns about the use of unlicensed adjusters in complex property damage claims.
The Case
The claim stems from a fire that caused extensive damage to a historic Lakeville property, insured for $1.1 million. Federal Insurance Co. paid nearly $1.77 million to settle the claim, with over $1.4 million going to Paul H. Mertz Jr., the general contractor hired to perform repairs, and an additional $15,675 paid to Mertz as a consultant. Chubb alleges that Mertz, acting as an unlicensed adjuster, inflated repair estimates and engaged in fraudulent practices, including charging for work not performed and misrepresenting costs.
According to court documents, Mertz’s estimates included $239,411 for unnecessary building code upgrades, $100,229 for demolition and debris removal (while paying a subcontractor only $21,000), and costs for replacing items like vanities and cabinetry that were cleaned rather than replaced. Chubb contends that Mertz’s dual role as both a consultant for the insurer and the contractor for the homeowner created a conflict of interest, violating Chubb’s policies prohibiting consultants from soliciting repair contracts during their assessment work.
Chubb’s Legal Action
In a 2012 lawsuit filed in U.S. District Court in White Plains, Chubb accused Mertz and his company, The Mertz Co., along with Chubb’s former adjuster Dennis Sorge, of fraud and breach of fiduciary duty. The lawsuit highlighted eight fire-related claims across Connecticut and Westchester County, alleging a pattern of inflated estimates and undisclosed conflicts. A federal jury in 2016 ruled unanimously in Chubb’s favor, awarding $12.3 million against Mertz and his company, including $6.4 million for fraud and $5.9 million in interest. Judgment against Sorge was suspended pending bankruptcy proceedings.
Chubb’s challenge specifically targets the unlicensed adjuster’s role, arguing that Mertz’s lack of a proper license exacerbated the mishandling of the claim. The company emphasized that adjusters must be licensed to ensure compliance with state regulations, such as Connecticut’s insurance laws, which mandate training and adherence to fair claims practices.
Industry Implications
The case highlights growing concerns about unlicensed adjusters in high-stakes claims, particularly following natural disasters. In California, for instance, emergency declarations have allowed unlicensed adjusters to handle wildfire claims to address processing backlogs, but critics argue this can lead to errors, delays, and lower payouts. “Nonlicensed adjusters may lack the necessary experience and knowledge of local insurance regulations, which can compromise the fairness of the claims process,” noted a recent industry analysis. Public adjusters, who advocate for policyholders, are often recommended to counterbalance such risks, ensuring thorough documentation and fair settlements.
Chubb’s proactive stance aligns with its reputation for rigorous claims handling, as evidenced by its top ranking in the J.D. Power 2024 U.S. Home Insurance Satisfaction Study and 2025 U.S. Property Claims Satisfaction Study. The company’s claims process emphasizes detailed documentation, including photos, videos, and repair estimates, to support fair and prompt resolutions.
Moving Forward
The Lakeville case, part of a broader $12.3 million fraud judgment, underscores the importance of regulatory compliance in the insurance industry. As Chubb continues to pursue accountability, the dispute serves as a cautionary tale for insurers and policyholders alike about the risks of unlicensed adjusters in complex claims. Industry experts suggest that policyholders facing similar situations engage licensed public adjusters to navigate disputes and ensure equitable outcomes.
Chubb declined to comment further on the ongoing litigation, and representatives for Mertz did not respond to inquiries. The case remains a focal point in discussions about claims integrity and the role of qualified professionals in the insurance sector.
Source: Westfair Communications, December 15, 2016