I am writing this blog in terminal C at Salt Lake City International Airport after spending two days in conference with my Merlin Law Group colleagues and one of the foremost insurance experts in the nation. This eye opening seminar confirmed that many in the insurance industry are not good neighbors, they are not there to help, and now exist solely for profit. Hurricane Sandy has given New Jersey an education in property insurance claims handling. Many are learning what those in Florida, Texas, and other storm prone states have known for decades.

One issue that we spoke about in this seminar reminded me of a question that a public adjuster recently asked me. How can insurance adjusters engage in such egregious conduct and maintain their licenses? It is a good question, and one I am sure many have asked themselves. There is, unfortunately, a simple answer to the question. New Jersey does not license adjusters that represent insurance carriers. The state only licenses public adjusters who represent policyholders.

Wondering why, I looked into licensing in other states. Louisiana, Florida, and Texas, which frequently face natural disasters, require insurance company adjusters to be licensed. New Jersey and Pennsylvania, which have been fortunate to avoid substantial damage from major storms until recently, do not require insurance company adjusters to be licensed.

Law regulating the insurance industry tends to be reactive as opposed to proactive. New Jersey has not licensed insurance company adjusters because the insurance industry has a strong lobby and has not been subject to widespread criticism until recent months. Thus, there was nothing to react to, and the Legislature completely ignored those on the front line working for the carriers. I suspect New Jersey will move to regulate insurance adjusters in light of the industry’s terrible reaction to Hurricane Sandy.

  • Insurance Veteran

    The fact that after three days of learning nothing more than the answers to the exam questions you can become a licensed adjuster with almost aotomatic reciprocity with 37 states certainly does not produce the most qualified folks to handle insurance claims be they public or independent adjusters. The system needs overhauling however where do you find warm bodies to put in front of consumers when catastrophe hits if you make the process too stringent. Seems no one including legislators have come up with the answer yet.

  • On the IA side of the industry, the volume of the newly licensed has long since passed the point of saturation. Carriers are responding by reducing fee schedules to the point that many experienced IA’s will take a pass.
    Carriers have long lamented that it is these rookie adjusters and the mistakes these folks are making that are giving rise to the public adjuster and the plaintiff attorney.
    Carriers it seems are more interested with the quantity of claims closed as opposed to the quality of claims closed. Yet in all reality, who cares if an adjuster can knock out 6/7/8 claims a day when 50% are going to get reopened?
    I believe the best defense with regard to the public adjuster or plaintiff attorney rep’d insured is a comprehensive concise estimate giving the insured everything they are legally entitled to the first time around.
    Yet as the previous poster stated, “How can you expect an adjuster with 3 days of training to competently assess damage to an insured’s property?”
    The answer is, “you can’t!”

    I don’t have a sure fire way to reduce such egregious mistakes made by rookie adjusters, yet I strongly believe that what is going on in the state of Florida is a great place to start.

    With regard to Florida public adjusters, all prospective PA’s must apprentice under the supervision of a licensed PA for x amount of time (I believe it to be 1 or 2 years)Only then and after said PA has demonstrated competency are they awarded an unrestricted public adjuster’s license.

    Chip, what would you think about IA’s having to train to the same standard? Rookie IA’s unleashed upon the insured with a total of 40 hours of instruction is a recipe for disaster which has been proven time and time again.
    Giving rookie IA’s a provisional adjuster’s license and requiring a 1 or 2 year period of time as an apprentice under the direct supervision of a licensed IA or IA firm would literally change the landscape in which we all operate.
    Rookie IA’s initial licensing should NOT be the end of the learning process, it should only be the…beginning.

    A 3 day course should NOT give the rookie IA a license to earn, it should ONLY give them a license to…learn

  • David Swank

    Just because some states do not require licensing of adjusters equate to bad adjusters handling claim losses.

    Many reputable IA firms require the adjuster hold “A” license from any state in order to work for us. We have seen 10% of our new adjusters who have never worked for Mariposa leave us due to poor performance. So in the end it really has little to do with whether a state requires the licensing of an adjuster or not. It has everything to do with the quality of work, professionalism and core principals and individual ethics. This of course holds true for IA and PA.

  • Insurance Veteran

    Both Canada and Australia have stringent licensing programs which are the equivalent of a two year college degree to secure an adjusting license. There are designations one must attain in order to get an adjusting license and there are continuing education requirements leading to a full license. In Canada in some provinces there is a 5 tier license the top level only being attainable after years of apprenticeship. Not good for P.A’s or attorneys as the level of activity on both fronts is a small percentage compared to the USA.

  • Insurance Veteran

    Granted a license does not confer knowledge or capabilities on an adjuster when the licensing criterion is a farce such as the Texas license. Proper licensing requirements which necessitate lengthy course work and supervised apprenticeships most certainly produce a better quality adjuster. The framework within which Cat adjusters get unleashed on an unsuspecting public needs to change. As a Cat adjusting firm owner I know the selection of competent associates for my firm is not an easy task and it never ceases to amaze me how easily people confer designations on themselves. Rather than just providing a warm body for the consumer the industry needs to strive to put a competent workforce out there to service their client base. Anything less should be unacceptable.

  • SHIRLEY HEFLIN

    Shirley Heflin
    (Tampa, FL)

  • SHIRLEY HEFLIN

    P.S.

    reference your opening sentence above:

    “…after spending two days in conference with….one of the foremost insurance experts in the nation…”

    Who is this expert you hold in such high esteem? Are you referring to CHIP MERLIN???

    SHIRLEY HEFLIN
    (Tampa, FL)