With 2013 just around the corner, many are looking forward to the start of a New Year, and we begin to make resolutions for 2013. If you are a public insurance adjuster getting ready to close out your business for the year, it is important to remember that staying organized and going paperless are great resolutions, but pursuant to the January 1, 2012, changes to Florida Statute 626.854, certain information needs to be retained from files opened in the past year.
Effective January 1, 2012, Florida Statute Section 626.854 (12) mandated that public adjusters do the following:
Each public adjuster must provide to the claimant or insured a written estimate of the loss to assist in the submission of a proof of loss or any other claim for payment of insurance proceeds. The public adjuster shall retain such written estimate for at least 5 years and shall make the estimate available to the claimant or insured, the insurer, and the department upon request.
It is not uncommon for the Department of Insurance review public adjuster files, both closed and active. If you have an organized and systematic method of saving your documentation, these file reviews go faster and your work for policyholders is better because you are more efficient.
While the statute states that public adjusters are required to retain the written estimate for at least five years, public adjusters should also keep the corresponding documents prepared in connection with the respective claims. Keep the photos, contract for services, proof of loss, documents that support the claim, and all communications with the insurance company and the insureds. This includes email messages. Save all documents that support the amount of the fee charged to the client.1 It is better to be safe than sorry. Computers crash, ipads break, and staffing changes happen. Save your records and back them up.
Consider saving documents for several additional years or perhaps do not purge at all. Frequently, someone needs access to this information. An attorney for the insured may need your file even if he or she is handling a dispute has nothing to do with an insurance claim. As a public adjuster, your file should have a detailed evaluation of the property during the certain point in time. This snapshot of information can be very helpful in a myriad of different cases, especially for commercial and condominium clients. Your file can also be important if an insured has a later insurance claim. Whether the damages are similar or a completely different scope of work, having your records of the initial loss will save time and confusion.
With all the different online and electronic document storing systems and the ease of use of electronic records retention, there is no reason for public adjusters not to save and maintain their files and photographs. Photographs serve as great evidence of the condition of the property and can be easily saved. Make sure the date stamp on the Jpeg file is accurate.
Public adjusters should also remember to make sure 2013 contracts comply with the statute and administrative code.
6) Required Contract Terms. Public adjusters shall ensure that all contracts for their services contain the following terms:
(a) The contract shall legibly state the full name as specified in Department records of the public adjuster signing the contract.
(b) All public adjuster contracts shall show the public adjuster’s:
1. Permanent business address and phone number; and
2. Florida Department license number.
(c) The contract shall show:
1. The insured’s full name and street address;
2. Address of loss;
3. A brief description of the loss;
4. The insured’s insurance company name and policy number, if available.
(d) The contract shall show the date the contract with the public adjuster was actually signed by the insured or claimant.
1. The full compensation to the public adjuster shall be stated in the contract.
2. If the compensation is based on a share of the insurance settlement, the exact percentage shall be specified.
3. Any costs to be reimbursed to the public adjuster out of the proceeds shall be specified in an addendum to the contract.
(7) All contracts for public adjuster services must be in writing. The contract must be signed by the public adjuster who solicited the contract.
(8) No public adjuster may settle a claim unless the terms and conditions of settlement are approved by the insured.
Florida Statute Section 626.854(7)
An insured or claimant may cancel a public adjuster’s contract to adjust a claim without penalty or obligation within 3 business days after the date on which the contract is executed or within 3 business days after the date on which the insured or claimant has notified the insurer of the claim, by phone or in writing, whichever is later. The public adjuster’s contract must disclose to the insured or claimant his or her right to cancel the contract and advise the insured or claimant that notice of cancellation must be submitted in writing and sent by certified mail, return receipt requested, or other form of mailing that provides proof thereof, to the public adjuster at the address specified in the contract; provided, during any state of emergency as declared by the Governor and for 1 year after the date of loss, the insured or claimant has 5 business days after the date on which the contract is executed to cancel a public adjuster’s contract.
Also, check out Chip Merlin’s post, Florida Legislative Update for Public Adjusters.
Next week, we will post a recap of some of the most popular posts on public insurance issues from 2012 and re-visit the Atwater v. Kortum decision that has invalidated a part of Florida Statute 626.854.
1 Tax requirements dictate how long to save documents relating to income, profits, and losses; ask your tax professional.