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:

  1. 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.
  2. The communication must be sent only by regular United States mail and not by registered mail or any other form of restricted delivery.
  3. The communication may not be made to resemble legal pleadings or other legal documents.
  4. 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.
  5. 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.
  6. 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.