Policyholders Who Do Not Obtain Professional Claim Assistance Following a Loss May Be Foolish
The Florida Association of Public Insurance Adjusters’ (FAPIA) winter conference starts today. On its website is a link to a summary judgment motion filed in a lawsuit I noted in Second Public Adjuster Constitutional Solicitation Ban Challenge Filed. In the summary judgment was an amazing statistic that, if true, would certainly indicate that policyholders need professional help when dealing with their insurance claims:
A public adjuster’s involvement also frequently increases the dollar amount of a policyholder’s final settlement. By some accounts, the average settlement rises by as much as 20 to 50 percent. See, Peter C. Beller, In the Wake of Disaster, Help for Hire, New York Times (Feb. 2, 2006); and Brian D. Mockenhaupt, For Public Adjusters, Disaster Means Business, Providence (R.I.) Journal-Bulletin (Jan. 18, 1998). The Florida Legislature’ own program policy analysis office has found that, in claims related to the 2005 hurricanes filed by policyholders of the state-run Citizens Property Insurance Corporation, settlements averaged 747 percent higher ...The same legislative report found a smaller but still significant increase – 574 percent -- in settlements when public adjusters represented Citizens policyholders in non-catastrophe claims.
I was amazed at the statistics found and published by Citizens. I think it is far overstated and policyholders should not expect that type of percentage increase unless they have a smaller claim. While I may criticize Citizens' claim handling, there is no way it is that bad and it underpays to that extent that often. If I were a public adjuster, I would advertise this statistic every time I talked with a prospective client.
This lawsuit seems to be moving along quite a bit faster than a similar public adjuster lawsuit in Dade County which I noted in two earlier posts, Florida Public Adjusters File Lawsuit to Overturn 48 Hour Solicitation Ban and Fee Caps, and Public Adjuster Lawsuit Challenging State's Cap on Fees and Solicitation Ban Survives Venue Change. I expect that the summary judgment will be heard within the next sixty days. Pre-trial hearings are set and the judge seems to be moving this matter along pretty quickly.
Chip,
"... and it underpays to that extent that often."
I agree that not all insurance claim adjusters are incompetent and are trying to cheat policyholders. I also agree that if I were a public adjuster, I would use such statistics when talking with prospective clients. However, let’s keep it professional!
Not all policyholders who have claims require assistance that will cost them money. I'd recommend policyholders wait until their insurer completes their estimate and consult with their contractor. Although rare; some insurance adjusters get the claim and damages correct. No need for the policyholder to pay a percentage of their loss if it's not truly needed. If a policyholder is unsure or believes they are not being treated fairly they can have a professional look at it to be sure.
I’m sure many Public Adjusters reading this will disagree and will b under the impression that the sooner they are hired the better it is for the insured. Well… in some instances, yes.
Pretty sad state of affairs when a policyholder needs to rely on someone else rather than their own carrier or their rep to secure a valid indemnity.
What does this say about the adjusting community at large?
The lax, almost non existent, training provided that allows three day wonders to adjust is at the root of the problem. Licensing and training need to be far more stringent.
The public deserves far better than they are getting at present.
Joe,
I can appreciate your position. Indeed, many would hope that the insurance company adjusters could make the initial estimates very close to the final outcome. I am certain that for many insurers, the claims results are nowhere near what the statisics ae being reported for Citizens.
On the other hand, Citizens is not subject to any accountability for not acting in good faith. It is treated differently as a matter of law and many us are critical of that.
Vet,
I agree. And yet, I am certain that there are many competent and experienced adjusters that get the estimates and adjustments right or fix their mistakes quickly. Their claims get settled quickly and with happy customers. In my business, I do not hear of these stories, but I have always assumed that to occur in the vast majority of adjustments.
When I read the legal pleading with statistics apparently supported by Citizens, I was shocked. I have heard of some "hardball" claims offices that would routinely be wrong 200-300%. But 500-700% company wide wrong was a shocking indication of not getting it right at all. I suspect that the statistics must be skewed as a result of many smaller claims because it is simply such an outrageous number.
And I agree with you--the industry does not have enough thoroughly trained people in the field. Instead, there appears to be a trend of field adjusters not having enough training and experience with supervisors expected to find the flaws. Honestly, I think some of the personal lines carriers place their adjusters through more thorough training.
New public adjusters now must go through a one year apprentice program. FAPIA pushed for this law fearing concerns for consumers as you suggest.
The insurance industry has no minimum standard of experience for independent or staff adjusters.
Chip:
Taking from your reply to Vet above:
"...New public adjusters now must go through a one year
apprentice program. FAPIA pushed for this law fearing
concerns for consumers as you suggest.
The insurance industry has no minimum standard of
experience for independent or staff adjusters."
It's just ludicrous (in my opinion!) that the:
"The insurance industry has no minimum standard of
experience for independent or staff adjusters."
Here are people (i.e., independent and/or staff adjusters) for the "insurance industry" handling claims for insureds (i.e., PEOPLE)...claims that affect people's lives, businesses, livelihood, transporation, medical treatment, lost wages, disability benefits, and a host of other items, and the insurance industry has no "...minimum standard of experience for their independent or staff adjusters"????
This is really a sad state of affairs! It's no wonder we are where we are in the scheme of things involving insureds not being paid promptly and treated fairly as promised in their insurance policy/contract.
SHIRLEY HEFLIN
Chip,
The percentages get very high when you consider all the claim denials by the carriers prior to a Public Adjuster's involvement.
They deny the claim.....P.A. settle's it for $50,000. This is not uncommon.
j