Joey Childress and yours truly will present a seminar of water damage claims at the National Association of Public Insurance Adjusters Convention in San Antonio next week. I discussed how public adjusters can register and even get a discount for attending in Are You a Public Adjuster Who Wants to Be Better at Helping Policyholders and Make More Money Doing So?
One topic that will certainly be discussed is contractors illegally practicing public adjusting or law. NAPIA General Counsel, Brian Goodman has indicated this is a trend becoming more prevalent.
Our firm has several restoration contractor friends and clients. We are constantly explaining what public adjusting and the practice of law entails and why it is illegal for them to practice either. But, there are numerous contractors that not only commit these illegal acts but flagrantly advertise that they do so.
An example brought up at the Georgia Association of Public Adjuster’s board meeting yesterday is Southern Pro Restoration. Here is their internet advertisement:
Welcome to Southern Pro Restoration! We are a family-owned and operated Atlanta-based roofing company that specializes in total roof restorations due to storm damage. Your homeowner’s insurance may pay to replace your roof due to storm damage and we can help. We take all of the necessary steps to assist you in scheduling a meeting up on your roof with an adjuster from your insurance company. This ensures that you will have a fair and thorough assessment of all the damages and the best chance of getting it approved for replacement. We also employ a staff of insurance experts that deals directly with your insurance company to secure the payment for your new roof. The insurance company will figure the replacement cost of the new roof, and we complete the roof for that amount! By working with the insurance company, we also eliminate the need for homeowners to spend valuable time getting several estimates from multiple contractors. We do it all…from ‘Inspection to Installation.’
The problem has become so prevalent that the Florida Department of Financial Services has this warning:
Industry Warning: Contractors
Public Adjuster License Needed To Assist With Claims
Sometimes contractors attempt to help victims of disasters by offering assistance with their insurance claim. If they do so they may illegally be engaging in the practice of public adjusting without being properly licensed by the Department of Financial Services.
The definition of a public adjuster, as explained in Section 626.854, Florida Statutes, is any person, except an attorney, who, for money or any other thing of value (which would include securing a contract for repairs):
•Prepares, completes or files an insurance claim form for an insured
•Aids in any manner on behalf of an insured in negotiating for or effecting the settlement of a claim
•Advertises or solicits for employment as an adjuster of such claims
However, the contractor may discuss or explain a bid for construction or repair of covered property with the residential property owner who has suffered loss or damage covered by a property insurance policy, or the insurer of such property, if the contractor is doing so for the usual and customary fees applicable to the work to be performed as stated in the contract between the contractor and the insured.
If you are acting as a public adjuster in any manner by negotiating or effecting the settlement of an insurance claim on behalf of an insured and you are performing any of these services for money, commission or anything of value without being licensed as a public adjuster (Section 626.854, Florida Statutes), you could be subject to arrest and may be charged with a third-degree felony as provided by Section 626.8738, Florida Statutes.
I have spoken at restoration contractor seminars about this topic. Many restoration seminar leaders espouse the value of contractors hiring public adjusters or lawyers to help with the claim. This is fine, but nobody should teach contractors practices which are illegal. Indeed, I publicly responded to contractors at a Texas restoration seminar who asked me how they should handle coverage issues to settle claims. I then said in response, ‘I cannot tell you to do so because you are either practicing law or public adjusting.’ I know this is not what they wanted to hear but lawyers should not be teaching others how to break the law.
Contractors can and should discuss pricing and methodology of repair with insurance adjusters. Indeed, many insurance adjusters may not be fully aware of OSHA requirements, local pricing, manufacturer’s requirements, local considerations, and a myriad of other issues that arise when determining costs of repair. Insurance adjusters normally should speak with the policyholder’s contractor to fulfill the insurance adjuster’s good faith obligation to fully investigate facts concerning the amount of damage sustained and owed.
These topics will certainly be discussed at NAPIA’s annual convention next week. I urge public adjusters to attend and learn what can be done to help stop illegal practices which harm consumers and promote practices which are legal and lead to proper resolution of insurance claims. If you show up, I will give you some tips about handling water losses as well.
Positive Thought of The Day
Water is life’s mater and matrix, mother and medium. There is no life without water.