Second Public Adjuster Constitutional Solicitation Ban Challenge Filed
A lawsuit was filed in Leon County Circuit Court yesterday challenging the 48 hour solicitation ban on public adjusters. Last month, we posted Florida Public Adjusters File Lawsuit to Overturn 48 Hour Solicitation Ban and Fee Caps, reporting on the first of these two similar lawsuits. The second lawsuit is different in that it focuses solely on the 48 Hour Ban on solicitation, where the first challenges the fee caps enacted by the Florida legislature.
The most recent lawsuit succinctly states the issue and controversy:
This action challenges the constitutionality of Florida Statutes limiting the ability of public insurance adjusters to engage in truthful commercial speech. Specifically, the challenge is to the following provision of Section 626.854, Florida Statutes (2008) (referred to hereafter as the “challenged statute”):
6) A public adjuster may not directly or indirectly through any other
person or entity initiate contact or engage in face-to-face or telephonic
solicitation or enter into a contract with any insured or claimant under
an insurance policy until at least 48 hours after the occurrence of an
event that may be the subject of a claim under the insurance policy
unless contact is initiated by the insured or claimant.
The pleadings in the current lawsuit fairly set forth some general activities of what public insurance adjusters do:
Public insurance adjusters exclusively represent insurance policyholders, advocating for the best settlement possible from insurance companies. Typically, public insurance adjusters contact and contract with an insured owner or renter only after a disaster or mishap, not before. Then they assist with preparing, filing, and adjusting insurance claims. The work of a public insurance adjuster includes assisting in the inventory of lost items, estimating damages, appraising the policyholder’s loss, and attempting to negotiate settlements for the insured. A public insurance adjuster also may advise clients on policy conditions regarding temporary repairs and protective measures. The range of responsibilities depends on the contract with the insured.
…The fees charged by public insurance adjusters are capped by state law
at certain percentages of the insurance claim payments received by their clients.
Studies show that the work of public insurance adjusters can increase the average settlement by an amount greater than the fee charged by a public adjuster for that work.
The pleadings also set out the some of the factual basis for the unconstitutionality:
Statutes and regulations provide numerous consumer protections against deception by public insurance adjusters, and also provide strict penalties for
deceptive practice. Yet no pattern of generally false or misleading speech has been
found to exist in the profession of public insurance adjusting.… A legislatively created 2007 Task Force on Citizens Property Insurance
Claims Handling & Resolution concluded that the public needs to be protected
from unscrupulous public insurance adjusters. However, on information and
belief, the Plaintiff alleges that no testimony or other evidence was presented to the
task force or to legislators who considered the task force recommendations to
demonstrate that a 48-hour ban on early solicitation would directly advance the
state’s goal of protecting the public.…The Plaintiff further alleges …that DFS has not received any complaints from the public during the past five fiscal years establishing a pattern of problems with public insurance adjusters soliciting within the first 48 hours after claim-producing events.
…There are no time restrictions on other licensed or unlicensed businesspeople or professionals -- such as insurance company adjusters, cleaning services, contractors, roofers, smoke-mitigation or water-damage experts, etc. -- who may freely approach and contract with policyholders in the immediate aftermath of claim-producing events.
Very good constitutional attorneys are representing the public adjusters in both lawsuits. While not easy, I predict that the constitutional challenge to the 48 hour ban will be successful. The value to policyholders of having public adjusters assist in the claims process is best immediately after the loss. There was no evidence showing why a ban would help the public—the insurance industry lobby simply got the language into law. I think that some Florida legislators felt the entire practice of helping policyholders collect full benefits under the policy and charging for that service is a bit “unsavory.” Other Florida legislators may have heard stories that some public adjusters are unscrupulous, and therefore, felt any legislation limiting public adjuster participation in insurance claims was a worthy legislative goal.
I was curious, in your opinion, if you felt that the lawsuit filed by FAPIA has any greater chance of succeeding than the one filed by the 3 PA firms?
The arguments seem very similar, with the obivous exception of FAPIA not attacking the fees caps as the other suit has.
Chris,
The complaint in the second lawsuit is for a public adjuster the same way three firms have another suit. My understanding is that FAPIA is supporting the legal fees in the second lawsuit, but FAPIA is not the plaintiff.
Chances? Who knows if one has a better chance than the other. Combined forces and efforts,and if they share information, the two have a better chance than one--that is a certainty. I am hopeful that occurs.
Both have good constitutional attorneys representing the public adjusters.
Chip:
Having worked on the other side of the fence, I will tell you that the biggest complaint alleged was Public Adjuster's, specifically in Miami and Broward shielding the insured from the Fire Marshals and Fire investigators.
Insurance Companies wrote exclusions into most policies for fires started by any resident relative, even children. The insurance carriers, like State Farm, pay to assist the legal authorities with the use of canine sniffing accelerant detection dogs, training seminars, etc. Information like this can be used and dedected by authorities, and the carrier then uses the information to NO PAY claims.
This happens alot with Juvenille Fire Setters.
Fire Marshal's from DFS and local Fire Investigators complain about the above, and the famous line up on the street waiting to speak with insured.
Just another way of stacking the deck in favor of the carrier.
Richard,
Thanks for the perspective. It is the first and only time I have heard the complaint about public adjusters "shielding" possible witnesses and suspects to a possible crime.
Certainly, if the insurance company is investigating or helping the authorities investigate a possible crime, my strongest suggestion is call and retain an attorney experienced with the sometimes bizarre investigative techniques of fire investigators and SIU types. If the public adjusters are making that suggestion, they are doing the policyholder a favor and the SIU types and fire investigators may not apppreciate that professional assistance.
However, public adjusters should never interfere in a criminal investigation. I am not aware of any public adjuster having been charged with that or having a complaint filed with the Office of Insurance Regulation regarding that issue. If a public adjuster is interfering in an active police investigation, the public adjuster should be charged. I just have no proof this has occurred.
It is interesting how much money State Farm spends to advertise its "sniffer dogs" used in fire cases. The incidence of arson by a State Farm homeowner is very, very low. Thus, the advertising would not be for the purpose of making all of us more suspicious of fires being intentionally set, would it?
Do you think those ads make people go out and want to buy State Farm policies? No way.
Those ads are designed to propagandize the possibibility that arson is a bigger problem than what it really is regarding its customers to create this aura of suspicion. If there is any other logical reason, I am all ears and will gladly reflect it on this blog.
Most intentionally set fires are done by teenagers, ususally male. It does not surprise me that some insurance companies now place in the small print an exclusion that a fire set by a resident relative would apply to a teenage son living in the house. Policyholder parents probably are not aware of this provision.
It would be best for an Attorney to represent an accident victim after a loss as well or even a fire loss.
Why does the Florida Bar completely ban solicitation of Attorneys in this case except for mail order solicitation after a certain period of time.? I do recognize that the Bar ban is different then the State ban of Public Adjuster's in that it has been instituted by the Bar.....but it is a solicitation ban on a Professional that could best serve the public shortly after a traumatic event. Please keep in mind the ban on Public Adjuster's are for all types of property losses, not just fire.
I do not think many 3rd party losses that attorneys handle are any different then a 1st party loss the Public Adjuster deals with.....yet there is a no solicitation ban in effect.