Property Insurance Coverage Law Blog : Florida Insurance Lawyer & Attorney : Merlin Law Group Law Firm : Tampa, Houston, Coral Gables, Gulfport

Clay Morrison is a public insurance adjuster who, in a former life, owned a restoration company. His largest customer was State Farm. Clay is now the president of Morrison & Morrison, Inc. His public adjusting office is based out of League City, Texas and similar, to many public adjusters, the business includes family—the “other” Morrison is Clay’s wife, Ruth, a Texas attorney and corporate counsel for the firm.

Morrison decided to become a public insurance adjuster when he was “urged” by one large insurance company to go against his ethical standards and change the way business was done. Morrison’s article, published in the NAPIA Summer Bulletin, details the closed door meeting he was invited into with an upper level claims manager who made a request for Morrison to help State Farm.

The request:

“We refer a lot of restoration business to you, and we need your help in rectifying the consumer’s entitlement mentality.”

Morrison declined State Farm’s request, but his very successful restoration business was quickly out of business.

Now, Morrison is a public insurance adjuster, member of the NAPIA board, Secretary of the Texas Association of Public Insurance Adjusters (TAPIA), FAPIA member, and a Windstorm Network certified umpire.

Morrison explains that even as a small operator of his own public adjusting firm, he found it very important and beneficial to be a member of professional educational programs. Morrison acknowledges the expense of being active in multiple associations, but explains his two reasons for going the extra mile and spending the extra dollar.

Number 1: “If you want to be successful in a field, you must associate yourself with people who are most successful in that field.”

Number 2: “If you endeavor to do something, you should strive to be the best.”

Two valuable points for all of us to consider as we enjoy this holiday weekend and our work.

Public adjusters can do a lot of good for policyholders. Their ability to do so can be highly controversial with the legal bar. Knowing insurance law is as important to a public adjuster as knowing criminal search and seizure law is to a police officer. However, neither may practice law.

The National Association of Public Insurance Adjusters (NAPIA) had a long time general counsel, Paul Cordish. Although deceased, his legacy endures with a Cordish legal writing award to a law student writing the best legal paper on an insurance subject designated by NAPIA. NAPIA presents this award at its annual meeting, and the law student provides a presentation of his or her legal work.

Every six months at every NAPIA mid-year and annual meeting, Cordish presented his views on the current state of public adjusting throughout the country. Cordish always provided wisdom and true insightful thoughts. Many of us miss him greatly.

Today, Brian Goodman performs the same function as General Counsel to NAPIA and does a wonderful job eloquently expressing many of the same messages to the general membership as Paul Cordish. In my view, NAPIA has been blessed by these two attorneys providing terrific counsel to a profession often under attack by the insurance industry and then by the legal bar.

Mary Fortson provides oversight to our firm regarding ethics and logistical oversight of our attorneys. She has attended many NAPIA meetings over the past decade and has heard one clear message from Brian Goodman to all public adjusters, the same message Paul Cordish gave over the five decades he was NAPIA's general counsel. That message is:

Do not practice law if you are a public adjuster. The unauthorized practice of law represents the most serious threat to public adjusters as a profession because the bar associations may limit or prevent the activities of public adjusting under the guise of protecting the public.

So, I was not surprised when Mary Fortson and TAPIA's first President, Jim Beneke, asked me to provide a one hour presentation on the unauthorized practice of law at TAPIA's first meeting. It is an important subject and one professional public adjusters take very seriously.

While I will not provide a detailed analysis of this topic in a limited blog, my view is that many public adjusters hear the warnings, but they still practice law everyday in letters and phone calls. Most of the offenses come in advocating legal issues and coverage disputes with insurance adjusters. The other major offenses come at the time of providing advice to policyholders as to which legal resolution process should be taken to resolve disputes. Advocating a legal position and telling a policyholder to file or not file a lawsuit are acts of practicing law that are routinely breached by well meaning public insurance adjusters.

Over the past year, I have given the same presentation four times. Each time I cringe as I provide examples to the audience of what may constitute the unauthorized practice of law because I can see that public adjusters in the audience are squirming as I explain what they do is illegal--and I am a friend.

The truth is that many insurance company adjusters could make life horrible for those public adjusters who routinely write long legal dissertations about an interpretation of coverage with case law and statutes. I am surprised more public adjusters do not become grieved to the department of insurance and the local bar association.

Most professional public adjusters do not get themselves into this predicament. My hope is that my message and warning will save other public adjusters from the turmoil of such accusations in the future.

You are invited to attend the inaugural meeting of the Texas Association of Public Insurance Adjusters (TAPIA). The meeting is being held at the Hotel Derek in Houston, Texas on October 15, 2009 from 10:00am until 3:00pm. There is no charge to attend this meeting, which will also include lunch.

 Please register for the meeting on the TAPIA website, mytapia.org, where you will also find an application for membership that includes information about the membership fee. You are encouraged to join TAPIA before the annual meeting, although the opportunity to join will also be available at that time. Future TAPIA meetings will be for members only.

 On the agenda for the October 15th meeting, in addition to business items regarding the organization, is a discussion of the current issue with the Texas Department of Insurance regarding the public adjuster’s fee cap and other contract-related items. Attorneys David Weber and Kim Yelkin from Gardere Wynne Sewell LLP will be there to lead the discussion. Also on the agenda is attorney William “Chip” Merlin from Merlin Law Group who will present valuable information for public adjusters on the topic of The Unauthorized Practice of Law.

 On behalf of the TAPIA board, I strongly encourage you to become a TAPIA member and attend the annual meeting. We are at a critical time in the development of our industry in Texas and need the participation of all pubic adjusters to make certain that consumers receive the best service possible. (emphasis added)

The importance of TAPIA as an organization serving consumers cannot be overemphasized. The insurance industry is supposed to serve its customers, but rarely do I see any insurance industry executives leading the charge to self-regulate or promote laws that protect their own customers from improper treatment. The only licensed individuals, other than attorneys, that stand up for the interests of policyholders are public adjusters. It is no wonder that many in the insurance claims industry are antagonistic to them.

I feel fortunate to speak at this inaugural meeting and look forward to providing an informative and worthwhile presentation to all in attendance.

If you are a licensed public adjuster in Texas, you have to be at this important meeting.

I reported on this last January in my post, Citizens And TWIA Bad Faith Exposed. I further documented it last February in my post, Views From Hurricane Ike TWIA Insurance Adjusters. I made a sarcastic report of it in The Parable of Hurricane Ike Insurance Claims. Then, I suggested that my current client and Ike protest leader, Brenda Cannon Henley, had a valid reason to protest against TWIA in, Texas Windstorm "Slabbers" and Policyholders March on Austin. Indeed, we ran over three separate posts regarding how TWIA was wrongfully adjusting roofing claims. If you simply type “TWIA” in my keyword search to this Blog, TWIA shows up 37 times in 2009. Virtually all of my posts are negative regarding the reports of TWIA claims handling. TWIA makes State Farm and Allstate look like angels regarding claims ethics and satisfaction.

It finally seems as if the local media and Texas regulators are learning what all of us in the claims administration business believe--TWIA claims executives are out of control and its claims management needs to be replaced. Purva Patel of the Houston Chronicle recently reported in, HURRICANE IKE: State Looking into Roof Damage Policy, that Texas regulators started an investigation of TWIA roofing claims:

State regulators are investigating how the Texas Windstorm Insurance Association handles certain roof claims related to Hurricane Ike.

At issue is whether unsealed asphalt shingles are considered damaged, and if so, whether Ike was the cause.

The windstorm association doesn't always think so. But some homeowners say they have valid claims because Hurricane Ike lifted the shingles on their roofs, breaking the seal that binds shingles to each other.

The Texas Department of Insurance notes that although the association claims such shingles are not necessarily damaged, unsealed shingles would not pass a home inspection that's required to obtain coverage from the association and to keep coverage if a home is repaired after a storm.

“Because we see that discrepancy, and we think that when a homeowner's shingles have been adhered, that does constitute damage, we're pursing an investigation,” said Catherine Reyer, an associate commissioner of enforcement at the department.

The insurance department began investigating in late July and has received 23 complaints against TWIA on the issue.

Yesterday, reporter Mark Greenblatt, of station KHOU published an excellent article regarding an investigation by Texas authorities into TWIA’s unfair and deceptive claims handling:

The Texas Department of Insurance has filed a formal complaint against the Texas Windstorm Insurance Association , accusing it of “unfair or deceptive” handling of claims.

In a letter to the State Office of Administrative Hearings, the Department of Insurance says the insurance company could be subject to disciplinary action if the complaint is upheld.

Texas Windstorm is the only insurance option against windstorm damage or hail from hurricanes for consumers who live along coastal sections of the state.

 The complaint specifically criticizes how the company handles claims related to wind-lifted roof shingles.

The department’s action comes as KHOU continues its ongoing, two-month investigation of Texas Windstorm’s claims handling practices, and one week after we asked the State why no enforcement action had been taken against the company. At that time, KHOU cited the 724 consumer complaints we found that the Department of Insurance upheld against the company since Hurricane Ike.

You can watch the video broadcast of Mark Greenblatt’s news story by clicking here.

Next Friday, September 11, 2009, our firm will host a seminar for licensed public adjusters in Texas. This event is titled “Hurricane Ike-What a Difference A Year Makes?” and Texas Department of Insurance representative Jack Evans will be a featured speaker at lunch. I will introduce Brenda Henley who will discuss some of the events planned for the memorial of Hurricane Ike.

While I plan to finish teaching public adjusters how to help policyholders prove and present claims at 2 pm, I will finish early if any TWIA executives or claims managers wish to have a civil discussion with experienced and licensed claims adjusters about how they may better adjust TWIA customer claims. The planned informational meeting of the Texas Association of Public Insurance Adjusters (TAPIA) can certainly be delayed to allow for such an important exchange of information.

Everybody who knows me understands that this will not be a lynching, but a civil discussion of issues and concerns. The question is whether TWIA claims executives have the stomach to engage in civil debate with skilled and knowledgeable public adjusters as to how policyholder claims should be handled and paid and about their claims practices that are now under public scrutiny.

Recognizing that public adjusters need to have a relationship with the Texas Department of Insurance, Jack Evins from TDI will speak during lunch and be there to answer questions. Our experience is that regulators like to hear what is going on in the field and will follow-up on proof of abuses reported to them and verified by others.

The seminar will end at 2 pm and the TAPIA introductory meeting will start immediately thereafter.

So, if you are a Texas public insurance adjuster, September 11, 2009, is an important professional date for you to be in Houston to learn and share information and ideas.

The format of the seminar seemed to work very well, so once again we expect this event to be very interactive. The agenda will include the following topics:

• TWIA Issues – Status of Litigation, Whistleblowers, Overhead & Profit, Flood, Depreciation, Co-operation
• Causation and Sufficient Proof, Texas-style—It’s Different Here
• Valuation – Estimates That Have Impact and Hold Up in Appraisal or in Court
• Update on TAPIA
• Expert Panelist Analysis—Topics: Wind Speeds, Roof Damage, Wall Damage, Flood vs. Wind Damage, Sliding Glass Door or Window Damage, and Wind-driven Rain

The conference will begin with registration at 7:30 am and conclude at 2:00 pm. To register and receive additional details, you will need to go to www.adjusterlife.com. Please register by May 28, 2009.

This is an invitation-only event for Texas-licensed public adjusters. Be sure to register today, and please bring your Texas Public Insurance Adjuster license with you to the seminar.

It’s been nearly nine months since Hurricane Ike. Both Merlin Law Group and you, the public adjuster, have been working hard to hold insurance companies accountable so that policyholders see the results to which they are entitled.

Merlin Law Group is pleased to once again provide this free seminar as an opportunity to share knowledge we have gained by serving our clients and each other.