Public Adjusters (PA), in Florida, have been extremely successful over the past twenty years helping policyholders collect all they are entitled. The success rate is too high for insurance companies. The State of Florida is facing a significant battle over the business practices of Public Adjusters.
Three insurance organizations support legislation that restricts the activities of Public Adjusters. Florida Insurance Council, Property Casualty Insurers Association of America, and Florida Property Casualty Association made statements criticizing Public Adjusters…who represent homeowners when it comes to the professional preparation of insurance claim…Accusing them of “inflating” the claims, which drives up the costs for all policyholders.
Think about it, friends. To settle a claim, insurance companies make agreements with the policyholder and the PA. This means that “a buyer” and “a seller” can agree on a price. Insurance companies are not required to agree to a higher price. Insurance companies hate it when a policyholder hires a claims representative to prepare his claim. This is similar to the IRS getting mad about people who have their taxes prepared and filed by an accountant.
In February, state senator Mike Bennett (R-Bradenton) and Rep. Janet Long (D-Seminole) filed new legislative bills. These bills (S2264 & H1181) are designed to:
* Public adjusters are prohibited from calling customers or visiting their homes to solicit business unless they have a prior relationship or were close family members.
* Stop PAs from sending mail out to potential clients within the first 30 days following a storm. The bill also requires Pas to write “ADVERTISEMENT” on their letters in red, 14-point font.
* PAs are prohibited from telling prospective clients about their firm’s track record of obtaining settlements for policyholders.
* PA service fees are capable at 10% for hurricane claims and 20% for all property claims.
A Public Adjuster can’t attempt to contact a potential client for more than 30 days after a hurricane has passed. This is considered criminal restraint. Communications systems can be disrupted for up to 30 days after a major hurricane. Most times, a PA cannot contact prospective clients in the aftermath of a hurricane. This is because they can’t reach them through either mail delivery or personal visits.
Insurance policy benefits include immediate board-up, mitigation, living expenses, and emergency board-up for insureds who have suffered damage. This kind of assistance is needed immediately by the insureds, and not just 30 days later after the storm.
A building contractor can solicit business immediately after a storm, provided there is no law. The same applies to a roofer, tree-removal company, and a debris hauler. PAs should not be subject to any restrictions. In tax season, there is no restriction on accountants. There are no restrictions for Personal Injury lawyers after an accident. Why should you pick on PAs
Also, think about this. In hot weather, hurricanes can occur. Mold damages quickly develop from water damage. If mold is not treated within 30 days, it can make a building completely unusable and may even require demolition. Insurance companies have also written strong Mold Exclusions, which you can be certain they will invoke.
Under the pretense of protecting policyholders in Florida, state legislators want to deny policyholders timely assistance with their insurance claims. This effort is too transparent to not be seen as what it really is…a desperate insurance sector trying to maximize its profits at the expense of policyholders of Florida.
Recent state research found that the Division of Insurance Fraud has received 937 complaints from policyholders and insurers about fraud related to public adjusters. From 2004 to 2009, it investigated 269 of these complaints and made 31 arrests. Curiously, it did not reveal how many complaints policyholders had made about the claims practices of their insurance companies. The study did not show the number of hundreds of thousands of claims that were filed between 2004 and 2009. We do know that six major hurricanes ravaged Florida during that period.
They were:
Charlie – Category 4Frances-Catego 3
Jeanne – Category 3.
Dennis – Category 4.
Katrina – Category 3
Wilma – Category 4
Let’s look at the numbers and get some perspective to see how misleading this report is.
Let’s assume that 1,000,000 property claims were filed over the six-year period for all listed hurricanes. This number is absurdly low, as tens of thousands of property owners sustained repeated losses during the hurricanes. However, at just 1 million claims, 937 are less than 0.093% of all claims. This is less than 1% of the claims that were actually filed. In 31 cases, there was not enough evidence to warrant an arrest or even a conviction.
31 arrests, not convictions, over six years are not enough illegal activity for legislators to pass additional laws restricting ALL Public Adjusters’ business operations. I think the Public Adjusters are paragons for virtue when taken together. They should be praised, not pilloried…lauded, not legislated…decorated, not demagogued.
I wonder if Senator Mike Bennett or Rep. Janet Long would reveal how much money they received from the insurance industry-related donations to their financial records. I suspect that these Florida solons were bought and paid for in part by the insurance lobby.