Policyholders and Public Adjusting Under Attack in the Florida House of Representatives
Some public adjusters were calling me asking about the recent proposed legislation of Florida House Bill 1181. This extraordinarily anti-consumer legislation was filed by a Democrat, Janet C. Long. My impression is that this legislation is a potential nuclear bomb for policyholders and public adjusters.
This proposed law is a means for insurers to prevent policyholders from having access to professional help at the time they most need it. Under Long's proposal, the impact will be that insurers will pay less in claims to policyholders in the short term and the long term. The insurance industry lobby has done a wonderful job getting in Representative Long's ear on this one because it is not going to help her constituents at all--unless they are insurance executives and insurance lobbyists.
The significant portions of this bill do the following:
1. Severely restrict public adjusters’ ability to earn a living by limiting solicitation and income.
2. There would be no solicitation of a loss within 30 days by a public adjuster.
3. There would be no face to face solicitation except with prior clients or family members.
4. The values to be charged by the public adjuster are always in excess values determined or paid by the insurance company.
5. The notice of loss for a claim has a deadline of three years. This has little impact on newly filed claims since insurers have a contractual clause requiring prompt notice as soon as practical. While the statute says it does not shorten the time, it obviously does because amounts not specifically claimed within the three years are also outside the deadline. This comes up all the time in cases where carriers delay payment and construction does not even start for a couple years after a storm. Hidden damages found during reconstruction or which show up later will have an effective three year time limit for claims to be made.
The description of the House Bill 1181 listed on the Florida House of Representatives Website is fairly close to my conclusions except for the impact on the Statute of Limitations of five years:
Public Adjusters: Prohibits public adjusters from making specified employment solicitations; prohibits specified unsolicited written communications; provides exception requirements; revises prohibited solicitations; revises prohibited charges by public adjusters; specifies required information in public adjuster contracts; bars specified personal lines residential coverage insurance claims subject to specified notice requirements; provides for nonapplicability to specified civil actions limitations.
Here is the language regarding the solicitation:
626.854 "Public adjuster" defined; prohibitions.—The Legislature finds that it is necessary for the protection of the public to regulate public insurance adjusters and to prevent the unauthorized practice of law.
(5)(a) As used in this subsection, the term "solicit" or "solicitation" means contact in person or by telephone, facsimile, United States postal service, electronic mail, or any other method of communication directed to a specific recipient.
(b) Except as provided in paragraph (c), a public adjuster may not solicit professional employment from a prospective customer with whom the public adjuster has no family or prior professional relationship, in person or otherwise, when a significant motive for the public adjuster's doing so is the public adjuster's pecuniary gain.
(c) An unsolicited written communication to an insured for the purpose of obtaining professional employment is prohibited unless it complies with the following requirements:
- The first page and the lower left corner of the face of the envelope of such written communication shall be plainly marked "ADVERTISEMENT" in red ink in 14-point font.
- The communication must be sent only by regular United States mail and not by registered mail or any other form of restricted delivery.
- The communication may not be made to resemble legal pleadings or other legal documents.
- The communication may not contain any information as to the public adjuster's or public adjusting firm's record or history in obtaining claim payments or settlements for other insureds.
- The communication may not be mailed less than 30 days after the occurrence of an event that may be the subject of a claim under an insurance policy.
- A public adjuster may not 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.
Here is the language relating to the limitation of the fee which can be charged by public adjusters:
A public adjuster may not charge, agree to, or accept any compensation, payment, commission, fee, or other thing of value in excess of:
1. Ten percent of any amount in excess of the insurance company's claim valuation to repair or replace damage to covered property for claims based on events that are the subject of a declaration of a state of emergency by the Governor.
2. Twenty percent of any amount in excess of the insurance company's claim valuation to repair or replace damage to covered property for all other insurance claim payments.
(c) For purposes of this subsection, the term "claim valuation" means the total amount offered in writing or actually paid, or any combination of such amounts, by the insurance company to the policyholder for the claim for the damaged property, including loss of use, additional living, emergency, and any other expenses required to be paid under the terms of the policy.
The language which may effectively shorten the five year statute of limitations is:
626.70132 Duty to file windstorm or hurricane claim.—A claim, supplemental claim, or reopened claim under an insurance policy that provides personal lines residential coverage, as defined in s. 627.4025, for loss or damage caused by the peril of windstorm or hurricane is barred unless notice of the claim was given to the insurer in accordance with the terms of the policy within 3 years after the windstorm or hurricane first made landfall, or the windstorm caused the covered damage, in this state. For purposes of this section, the term "supplemental or reopened claim" means a claim for recovery of additional payments from the insurer for losses from the same hurricane for which the insurer has previously paid pursuant to the initial claim. This section may not be interpreted to affect any applicable limitation on civil actions provided in s. 95.11.
So what are we supposed to do now?
It's obvious insurance companies have all the $$$ and pay off politicians to advance their agenda, in one form or another. If they want to get something passed bad enough they most certainly will.
"Good Intentions" will only last for so long, before the massive insurance "money machine" completely takes over. Any resistance would simply serve as a delaying action.
Instead of endless battles trying to prevent legislation from passing, why not petition for laws, favorable to PA's, that actually cannot be overturned by some political whim.
Is there anything that policyholders and public adjusters can do to stop this suggested law?
If you feel that we help the insured, then why are you not going to bat for us?
As you full well know and have taught it to us many times that we (public adjusters) cannot practice law, but you can. I realize that before we came, there were lawyers. I
If things keep going this way, many of us won't be around.
But if you feel that we are of benefit and have a positive impact on the industry, why are you not taking the bull by the horns and fighting this legal battle with us?
Let's not forget, the insurance companies have established that we are in the good hands of our good neighbor, who is on our side. Why would policyholders need representation, when already represented?? As long as companies are unfettered in their advertisements, paid from policyholder premiums and not from their own coffers, we don't stand a snowball's chance in hell of changing perception.
Those advertising funds should be used for appropriate use: surely policyholders themselves are legitimate and entitled to have a basic understanding of how to determine what they are entitled to under their property insurance policies (home, business, auto, boat, etc.), in terms of fundamental adjusting principles, rights, and rules that show and tell what they can expect. There is no reasonable argument against the policyholder having equal information as the company, before and during the claim process. No one could very well argue that a policyholder in good standing is any less legitimate than the company itself.
If you think about it objectively, the insurance company adjuster should be paid from the company's own pocket as well, and not from policyholder premiums. Just imagine paying for an attorney who represents the other side, then that attorney claims to represent you as well in the same transaction, then you pay for your attorney on top of that. That's how it is in the world of insurance--two party contracts between the public and the companies. They are indeed the other side, not the same side. I know they don't want to be thought of as the other side, but they truly are and I believe have more to lose by trying to wear both hats at once. Nowhere else in our society do we tolerate anyone representing both sides in any one transaction or contract. We just haven't gotten around to sorting it out yet when it comes to insurance. Actually it was first sorted out when insurance was invented. However, it has been gradually warped from its original intent ever since, in spite of the words that still exist and spell it out otherwise. These very words have stood the test of time. However, they are now under attack and crumbling to sanction insurance companies' upper hand over policyholders. I do believe though that eventually our assumed, commingled interests will be separated as they were originally intended, surely as any conflict of interest is worthy of separation.
The St Pete Times today (2/25/10) has a article that says the FL Cabinet delayed the authorization to sell $710 million Cat fund bonds to pay for storm claims. Governor is concerened about fraud. Cat fund offical said P As are a big part of the problem.
My question is:
what happened to the Insurance companies SIU units that are required to be staffed to investigate fraud if in fact there is fraud?
As the Cat fund says they cannot investigate these paid claims (and remember they were paid after one would assume a thorough review by the carriers) then prehaps a investigation should start with the insurance compaines SIU units to see if they are staffed to do the job the legislature said they were suppose to do.
Adjuster and Heidy,
I am going to have a special Guest Blog about what policyholders and public adjusters can do in tomorrow morning's post.
Everybody reading this should remember a few important aspects about our democratic process, the need to participate, and the need to reform when criticism is warranted:
1. Most elected officials truly want to make the "world, country, state" a better place to live and work. They are not corrupt, but are truly well meaning people.
2. Politicians viewpoints on issues are often ignorant because nobody knows everything. If full time insurance lobbyists show propaganda to these elected officials that only shows that policyholders are getting something they do not deserve and that public adjusters are fleecing insurance companies and policyholders, you do not need to be a genius to appreciate their impressions and viewpoints.
3. Many insurance companies require and train their employees and agents to speak with elected representatives about issues in such a way to slant impressions to elected representatives about the need for laws that protect insurance company interests over consumer interests. They often have these scripted out as talking points so that the propaganda actually makes it sound like the proposed law is in favor of the policyholder---usually through the promise of lower rates which then never materialize or do so at the cost of not having coverage.
4. Unless interested people take an active role to visit with, write, and support representatives that appreciate the truth and the need for policyholder protection, the full time lobyists and employees of the insurance industry will prevail with their message.
5. You have to participate if you want justice to work in a democracy because large corporate interests have already figured this out and spend massive money and time coordinating special interests by industry.
6. Public adjusters have made numerous changes in the law and have made more suggestions for improving their trade and preventing abuses by some. This reform within the public adjuster trade through leaders in FAPIA and NAPIA needs to be explained and continue.
7. Show up and support representatives that appreciate the consumer side of insurance. You need to encourage and provide financial support to consumer organizations and FAPIA's legislative efforts, including showing up next Tuesday for Frank Artiles in Coral Gables.
8. If you want justice, you cannot just sit back and expect others to do it all for you. You have to work at it with your time and money. Make a commitment and stick to it. If it is important enough, make a big commitment and encourage others. One person can make a difference.
9. Do not get discouraged. I have visited with and provided information to various representatives for a number of years. Sometimes, I have felt like it is just me, a few lobbyists I have personally hired because I have to work on my cases, and just a handful of others in Tallahassee trying to push for laws that favor consumers and explaining the important role of public adjusters. I feel as if I have wasted a significant amount of money and time while some other colleagues simply do nothing and provide no support. And, I still keep at it.
In contrast, the insurance lobbying effort is massive, professional, and full time. They can outspend and provide greater numbers of individuals in their efforts.
And, policyholders cannot give up because the alternative is unjust laws. Those well meaning political representatives understand the enormous wealth and resources of corporations. Contrary to popular rhetoric and demeaning criticism, most elected representatives are not "paid off" or "corrupt." They will listen if you can present a credible and persuasive impression that is based on genuine and authentic truth of an issue.
Policyholders and Public Adjusters can't give up. We must be prepared to fight like we do everyday of the week.
How do we fight? The best way is to support people like Frank Artiles and to get people like Janet Long removed from office. That's right--vote them out of office. Then we must educate the remaining legislators as to how insurance companies are taking advantage of policyholders.
Legislators will listen if credible information is presented to them. And, if they won't listen? Then they need to be voted out.
If we find that mediations handled by Public Adjuster's were public records, then FAPIA needs to get a questionaire out to these policyholders and then get this information to all the legislators and ask them if they are aware of this information.
The Public Adjusters need to educate these legislators the way we brought about changes to the Continuing Education requirements and other licensing requirements. However, we need the FAPIA attorneys to deal with the issues as to why Public Adjusters are treated unfairly when it comes to fees.
Why are the fees that are paid to Public Adjuster cut in value per legislative law, yet the Independent adjusters are allowed to bill carte blanc? Why aren't Insurance adjusters salaries and perks, such as company cars, mileage reimbursement, and other perks set by legislative law. No one challenges this.
And what about the the 48 hour rule? Why can't our attorneys file suit against the Governor for the Public Adjuster rights being discriminated against and enjoin both actions? I am not an attorney and would like an answer from Chip as to whether we can do this.
Chip helped us start FAPIA, and we need his help more than ever along with all the other attorneys that help us in our battle with the carriers.
My understanding is that Reprentative Long tried to pass something similiar to this last year and failed. Is that correct?
I also believe that she has been a failure in the past and with God's help will continue to be a failure because of her bad intentions.
One last question about the 3 versus 5 year statue, are the insurance companies going to start changing all the contracts with insureds because of this or does this only affect public adjusters, meaning attorneys will still be able to go after 5 years?
Chip:
I appreciate your well-informed comprehensive & detailed response. However, my view is a bit more pessimistic than yours in regards to our noble "elected officials".
When I say "corrupt" I mean it in the sense that they have cushy jobs, massive slush funds, great perks, and they want to keep them. They don't keep them by going "against the grain" or going up against multi-billion dollar insurance company or muli-nationals. That's a sure-fire way to get kicked out of office.
In today's cut-throat politics, even those with the best intentions often end up succombing to the massive corporate giants & political special interest groups. It's quite obvious what these possible new "laws" are attempting to achieve: the complete destruction of professionals helping policyholders obtain full recovery.
Let me provide an example: A Florida Representative firmly believes public adjusters help policyholders and what they stand for. Then, an Allstate lobbyist walks in his office, and in so many words, basically inidcates that if the Florida Representative, keep endorsing Public Adjusters or furthering their cause, Allstate cannot suppport other legislative agendas of that Represenatative nor help you get re-elected next year. (I realize it isn't as black-and-white as this, but you get the basic idea)
Please excuse my rant. This attack on the one profession tht helps policyholders right after a loss just makes me sick.
I agree with Chip...one person CAN make a difference!!
The following letter will be sent to the Lakeland Ledger, the Polk Voice, Woman to Woman, Tampa Tribune, Orlando Sentinel, St. Pete Times, Miami Herald, Sun Sentinel ... and any other newspaper I can think of!! I fully intend to send this to the offices of Janet C. Long and Mike Bennett.
Every homeowner you have helped has a story...their story needs to be heard in Tallahassee.
In February, 2009, my home caught on fire. It was totally devastating to me and my family. We were displaced, scrambling to find a safe place to stay. Thankfully, we had family in the area that we could temporarily reside with. We spent a month in a hotel. We were responsible for the upfront cost of our room, with the Insurance Company reimbursing us. We have been renting a place since then. We are still, in essence, displaced.
We had insurance. You get a false sense of security with insurance, and I will admit I am grateful that we had what we had. However, if you think your insurance company is going to do right by you, think again.
We had to go through all our belongings and attach a value to them, a daunting task to say the least. How do you place a value on things that have sentimental value? The insurance company then took our list and decreased the value of everything in our home by at least 60%. I was so outraged by this. The premiums had been paid faithfully. The policy was up to date. Yet, we were being punished for having "lived". Let me tell you, the contents of your home are only worth 1/2 of your home's worth, and yet this insurance company wants to decrease the value of our contents. The insurance adjuster is not there to be your "friend". He/She may seem to be that way, but don't be fooled. Insurance adjusters are trained to make sure you get as little as possible, and saving the Insurance Company as much money as possible.
Let me also state, for the record, it was our Public Adjusters who were able to make the insurance company give us some money to LIVE on those first few weeks. the insurance company surely didn't want to give us anything up front!
We would have had to settle for what our insurance company was giving us if we had not hired a public adjuster. Most people are not even aware of what public adjusters do. They come in and are able to make the insurance companies pay what is rightfully owed to the home owner. They take on the insurance companies so that the home owner can get on with living.
As I stated before, our fire was in 2009. We still have not completely settled with our insurance company. Our public adjusters, Matzen, Inc., are still in the process of winning our case.
On Jan. 16, 2010, the Lakeland Ledger ran an article entitled "Property Owners Win Higher Settlements With a Public Adjuster" and yet, there is legislation in Tallahassee that will limit the public adjusters across Florida from having contact with any policy holders. House Bill 1181 was filed by Rep. Janet C. Long, Democrat, and co-sponsored by Sen. Mike Bennett, Republican.
This bill states that for the protection of the public...Protection of the PUBLIC? Is she crazy?
This bill is highly suspicious to me of being backed by the Insurance Industry. Within the guidelines of this bill, Insurance Companies must be contacted within 24 hrs of an incident. Meanwhile, public adjusters would not be able to contact a potential client (know anyone who's house has burned or has a sinkhole? Can you say Charlie, Frances and Jean?) who has had a loss until 30 days after the event. The stipulations within this bill will, in essence, tie the hands of any public adjuster from having contact with a potential client, who, believe me, will need them.
You may not think this will affect you. You may believe you are safe and sound within your home because you have a policy in place. Begin to reconsider this notion. I never expected to have a fire. I feel confident that the people in Polk, Hillsborough, Pinellas, Highlands and any other counties that have had sinkholes this year thought they were safe as well.
It is in every citizen's best interest to help stop this bill. It will affect someone you know personally within your lifetime.
The following video was created to inform policy holders about the importance of our job as Public Adjusters...share this with anyone who owns a home...
In Your Darkest Hour
http://www.youtube.com/watch?v=7n9Lwz4hHKk
Chip,
While I do have some problems with what has been proposed, there are some things that I do agree with. I have no problems dealing with honest, knowledgeable, professional public adjusters. It is the ones who think it is a get rich quick scheme.
Should there be a 30 day waiting period before contact? No. That is unreasonable.
Should a public adjuster have an intrest in a construction company or be given fees for refering clients to a contractor? Surely not.
Should a public adjuster prepare their estimate in house and not be using a contractor to prepare the estimate? Yes. Too many times I have seen estimates prepared by contractors presented and have many more items than what the public adjuster and I had agreed was part of the loss.
Is the apprentice program justified? Yes.
The fact that the Florida public adjusters cry about fee limits amazes me. Texas, Michigan, and numerous other states limit the fee to 10% of the settlement amount excluding ALE. PERIOD. The 10% does not apply to just storm losses but any and all losses regardless if storm or not. I have seen firms in these states as well as Florida and I have not heard one public adjuster in the other states say they cannot make good money at 10%.
Sadly, I have seen the lack of professionalism in the public adjuster ranks in Florida more so than in other states. I truly believe it is because there are too many who got into it for the money and not really to assist a policy holder.
When you set the fees to where the $ signs are not as pronounced, you limit the get rich quick, do not want to be professional types. Sadly I saw too often in 2005 and '06 the total lack of professionalism of public adjusters.
I had occasion to handle claims with Mr. Tutwiler in the 90's when I was based in St. Pete. When you deal with a professional such as Mr. Tutwiler, claims do go smoother as both sides know what is expected of the other.
Some of the attacks are warranted and some are not. Compromise is in order to settle this issue. I will never disparage a public adjuster to a policy holder or advise not to retain one. I will tell them that it is their option to retain one just like it is their option to retain an attorney.