What Usually Must Happen Before Payment
- Settlement terms confirmed: The parties usually confirm what is being paid, what claims are being resolved, and whether anything is being paid beyond the claim amount (like court-awarded costs or fees). In many claims, there is no separate “attorney fee” line item paid by the insurer.
- Documents signed: A settlement commonly requires signing a release. A release generally ends the dispute in exchange for payment, so it matters whether the release includes (or waives) any request for fees.
- Liens/reimbursements addressed: If there are reimbursement issues (for example, certain medical payers seeking repayment), those are typically handled as part of wrapping up the claim. This is separate from whether the insurer must pay your attorney’s fees.
- Disbursement: After funds are received, they are typically distributed according to the settlement paperwork and the attorney-client fee agreement (fees, case costs, medical bills/liens if applicable, and the client’s net amount).
When an Insurance Company May Have to Pay Attorney Fees in North Carolina
North Carolina generally follows the rule that each side pays its own attorney unless a statute (or a contract) allows fee-shifting. In the insurance-claim context, the most common paths to insurer-paid fees involve going to court and getting a judge’s order.
- Possible fee award in certain suits against an insurer (judge’s discretion): In some property damage, personal injury, or certain suits against an insurance company on its policy, a judge may award a reasonable attorney fee as part of court costs if specific requirements are met—such as an unwarranted refusal to negotiate or pay, and other statutory conditions. See N.C. Gen. Stat. § 6-21.1.
- Unfair and deceptive trade practices (UDTPA) fee-shifting (judge’s discretion): If a lawsuit alleges and proves an unfair or deceptive act or practice under Chapter 75, the court may award attorney fees in certain circumstances (for example, willful conduct plus an unwarranted refusal to resolve). See N.C. Gen. Stat. § 75-16.1.
Two practical takeaways matter here: (1) these are typically post-lawsuit issues decided by a judge, not something an adjuster routinely adds to a claim payment; and (2) even when a statute allows fees, the award is not guaranteed.
How Appraisal Fits In (And Why It Usually Doesn’t Create Attorney-Fee Payment)
When the dispute is mainly about value (for example, the insurer’s offer is far below an appraisal report), invoking a policy’s appraisal clause is often a way to resolve the valuation disagreement without fully litigating the entire case.
But appraisal is not the same as a court judgment. In many situations, appraisal resolves the number, and then the claim is paid based on that number—without a separate requirement that the insurer also pay your attorney’s fees. Whether any fees are recoverable depends on the legal claims asserted and the procedural path (including whether a lawsuit is filed and what the court finds).
What Can Cause Delays (And Confusion About Fees)
- Mixing “claim amount” with “fee shifting” concepts: A higher valuation outcome (through appraisal or negotiation) does not automatically mean the insurer must also pay your attorney’s fees.
- Release language: Some releases are broad and may waive extra-contractual claims (including claims that could support fee-shifting). This is one reason it’s important to understand what you are signing.
- Disputes about whether the insurer’s conduct was “unwarranted” or “willful”: Fee-shifting statutes often require specific findings. Insurers commonly dispute those points.
How This Applies
Apply to these facts: Here, the dispute sounds like a valuation gap (the carrier’s offer versus an appraiser’s report) and you are considering using the policy’s appraisal process. In many North Carolina claims, that kind of appraisal-driven resolution results in payment of the claim amount, while attorney fees remain governed by your agreement with your lawyer.
If the facts also support that the insurer unreasonably refused to negotiate or pay, or engaged in conduct that could support an unfair-and-deceptive-trade-practices claim, attorney-fee shifting may become a court issue—typically after suit is filed and the required findings are made.
Conclusion
In Durham and across North Carolina, insurers usually are not required to add your attorney’s fees on top of a settlement or claim payment just because you hired a lawyer. Fee shifting is possible in narrower situations—most often after a lawsuit—when a statute allows it and a judge makes specific findings. A practical next step is to have a North Carolina attorney review the valuation dispute, the appraisal clause process, and any potential claim-handling issues before you sign a release or commit to a strategy.
