Florida law is significantly more specific about who may work on, aid in, or prepare a claim for a policyholder. Many insurance restoration contractors, all insurance consultants, and all those non-licensed third parties who help contractors, policyholders and public adjusters with insurance claims should get ready for a new way of doing business when a new law takes effect on January 1, 2018.

The new law has other significant changes, especially regarding public adjuster apprentices, but today, I focus on the following:

19) Except as otherwise provided in this chapter, no person, except an attorney at law or a public adjuster, may for money, commission, or any other thing of value, directly or indirectly:

(a) Prepare, complete, or file an insurance claim for an insured or a third- party claimant;

(b) Act on behalf of or aid an insured or a third-party claimant in negotiating for or effecting the settlement of a claim for loss or damage covered by an insurance contract;

(c) Advertise for employment as a public adjuster; or

(d) Solicit, investigate, or adjust a claim on behalf of a public adjuster, an insured, or a third-party claimant.

Insurance Consultants, who are not licensed public adjusters or attorneys, advertise, and I suppose provide, all types of services to policyholders, contractors, and public insurance adjusters. Frequently, these unlicensed consultants act as a “back room” or “third party administrators” for contractors and public adjusters. They send, prepare, and work on property insurance claims. These acts are unlawful in many states, including Florida. The new law clarifies those who may lawfully assist policyholders in preparing and making claims. I suggest those unlicensed individuals who do this work stop or obtain a public adjuster license right away.

Restoration contractors are important. After disasters strike, communities need competent and motivated construction professionals. Restoration contractors who have pre-arranged temporary but experienced help willing to do first class work in places far from home should be congratulated for their work. Some people say they may be “storm chasers,” but the best restoration contractors do quality jobs and are a blessing when a community is devastated. Policyholders, insurance companies and the public need professional restoration workers devoted to rebuilding communities when disaster strikes.

Restoration contractors who choose to ignore this new law and who prepare, complete or file an insurance claim on behalf of a policyholder or third-party claimant should also look for a criminal defense attorney. As indicated in NAPIA Annual Meeting in San Antonio Will Discuss Water Damage Claim and Unauthorized Practice of Public Adjusting, they are breaking the law and the Florida Department of Financial Services has issued a bulletin warning of the possible penalties.

Here is a good example of a Florida contractor advertisement promising to perform illegal activity:

We specialize in insurance claims, you can rely on us to take care of your claim from start to finish. All you have to do is make the call to start the claim. We handle the rest. They make their estimate, and we make ours. We negotiate with the insurance company to find not only an agreed upon price, but also an agreed upon scope. Once everyone is on the same page, we get contracts signed, and begin work. Every company is different in how the handle claims, we work directly with your insurance adjuster to make sure that everything is done in a timely manner and gets finished properly. Giving you a stress-free insurance restoration claim process.

When dealing with unexpected damage to your home, filing an insurance claim can feel like a nightmare that never ends. Trust our team with over 10 years of insurance claim experience to handle the process from start to finish.

Our goal is to make sure the claim is payable at an amount that is large enough to restore your home to its pre-damage state.

• Fire and smoke damage

• Wind and storm damage

• Water damage

• Tree damage

• Car damage

All an enterprising State Attorney would have to do to build a case is simply send investigative subpoenas to this contractor and take statements from that contractors’ employees who solicit contracts. The State Attorney would then inquire of policyholders what the company representative told them at the time of solicitation and during the claim. The State Attorney could also send investigative subpoenas to the independent and company adjusters who negotiate the claims with the contractor to determine who wrote emails about the insurance claims and what the company representatives said and did during the claims process. This would establish whether a person not licensed as a public insurance adjuster or an attorney acted to “aid,” “prepare,” or “negotiate” the insurance claim. As an aside, I suggest that insurance adjusters should be careful not to aid those who are endeavoring to break Florida law.

I am truly surprised that the Florida insurance industry—which has complained about some of these contractors in Dade and Broward counties—has not asked why the Attorney General and the State Attorneys in those counties are not pursuing charges. Some insurance claims executives have told me that they have complained to authorities, and nothing has happened.

The bottom line:

  1. The new law strengthens previous law.
  2. The new law better protects consumers and the insurance industry.
  3. People involved in the restoration industry and those estimating and dealing with insurance companies in any way should be careful not to break Florida law.

Positive Thought For The Day

“I am not an advocate for frequent changes in laws….But laws and institutions must go hand in hand with the progress of the human mind. As that becomes more developed, more enlightened, as new discoveries are made, new truths discovered and manners and opinions change, with the change of circumstances, institutions must advance also to keep pace with the times. We might as well require a man to wear still the coat which fitted him when a boy as civilized society to remain ever under the regimen of their barbarous ancestors.”
—Thomas Jefferson

  • Ron Delo

    Thanks for this Chip!

  • Chip Merlin


    Good to hear from you. Wait until my blog tomrrow for the 4th of July!

  • rogerpoe

    As a general contractor, I appreciate that Texas public servants understand that Contractors can Fairly, Reasonably, and Necessarily communicate with Insureds adjusters, per proper market context. The Texas Department of Insurance published the following Bulletin and FAQ’s to support their common-sense and practical market position. Hopefully – Florida and other States public servants understand the same. https://www.dropbox.com/s/d2rnbrkcql85w1a/TDI%20Guidelines%20For%20Contractors%20To%20Not%20Act%20As%20Public%20Adjusters.PDF?dl=0

    • Chip Merlin

      Contractors that have provided bill, estimates or proposals to do work should be spoken with by insurance adjusters. I do not know of a state that prevents this and good insurance company practice should include investigation of this and of the contractor’s credentials and method of business.
      For example, some “fly by night” contractors hire so called “independent contractors” to escape workers compensation laws and other laws when these individuals are really employees. Price is only one aspect of the investigation and quality is another that should be as important.

  • James Purcell

    While I understand the good intentions, my initial reaction is that the bill is too broad and vague.

    It prohibits any person from ‘directly or indirectly’ preparing, investigating or filing an insurance claim for an insured or on behalf of a public adjuster.

    If that’s the case:

    – Is EagleView prohibited from providing roof measurements which are used to establish replacement cost? Is their fee included in the PA’s 20% cap?

    – What about a PA paying ITEL to determine if a material is no longer available?

    – How about a thermal imaging professional who is hired by a PA to help investigate a claim?

    – Or a leak detection company?

    – Roofing consultants?

    – Last week I hired a landscaping architect to assist me in evaluating $120K in damaged trees from a propane truck explosion. Is this now acceptable practice for the carriers but illegal for a PA?

    – For that matter, how does this not apply to insurance appraisers working on behalf of the insured or hired by the PA? Appraisers are unlicensed and for compensation directly investigate and adjust claims on behalf of a public adjuster or insured.

    – If a PA asks me to update the pricelist on an estimate I did last year, but I’m licensed as an IA, will I be a criminal if I charge him for my time?

    On another note, the bill prohibits PA’s, apprentices, etc. from entering into a contract with the insured that vests in them control over who performs the repairs on the property. Why is it OK for People’s Trust and Citizens to enter into a contract with the insured that vests in them control over who performs the repairs on the property?

    If I’m misinterpreting or misunderstanding the bill’s language, please correct me. While I’m sure the FL DOI isn’t going to be arresting anyone at EagleView anytime soon, it sure looks like they have the power to if they want to.

    • Joel Perez

      I’m no lawyer, so take this with a grain of salt. I printed the statute and poured over it. I saw nothing in it that would preclude a PA from hiring any specialist to assist on the claim. The last line of 626.854 (1) says: “The term does not include a person who photographs or inventories damaged personal property or business personal property or a person performing duties under another professional license, if such person does not otherwise solicit, adjust, investigate, or negotiate for or attempt to effect the settlement of a claim.”

      So I posit that this excludes admins or secretaries (whatever you want to call them now). Professional services who assist by providing estimates for complex issues, such as a landscaper, or roofer, or plumber, ITEL, etc. This would also exclude other staff, I know some large PA firms have estimators. Other PA’s use estimating services. I don’t see how the law limits these, as they work under the license and do not effect the payment of anything, but provide info for the PA to prepare his file. The key phrase is “solicit, adjust, investigate, or negotiate.” I have in occasion received calls from PA admins who attempt to negotiate. I remind them of the existing statute which also prohibits that and request to speak to the PA/Attorney.

      What I am interested to know is Chip’s opinion on the amended 626.8548. Can a PA appoint a IA and then the IA solicit claims like a PA? I can already see the problems with this…

      • James Purcell

        Thanks for offering your thoughts on this, Joel. I’m not a lawyer either!

        All of the examples I gave, (leak detection, EagleView, Thermography expert, estimator), I chose specifically because none of these are required to be licensed in the State of Florida.

        So if that leak detection specialist meets the PA at the house, uses his expertise and equipment (for compensation) and informs the PA of the source and extend of the leak….. How can he argue he is not directly or indirectly assisting a PA and/or investigating an insurance claim?

        I’m a licensed IA who has, and continues, to adjust claims on behalf of carriers. But I am also often hired by attorney’s and PA’s to provide comprehensive estimates, especially for more complex situations. When we do this, our fee is based on an hourly rate with no interest in the outcome of the claim so we can remain unbiased. In almost every case, I will discuss the claim with the PA and the PA will have already determined causation, coverage and scope of damages but needs an accurate estimate of repair costs. The way this bill is written, it feels like if I so much as ask the insured if their wood flooring was glued down, I’m now ‘investigating’ the claim….

        • Chip Merlin

          This is a good point. The public adjuster’s contract is supposed to include costs for experts to help with a loss and investigation. There would seem to be some conflict with this new statute.
          But, a public adjuster that has a bunch of or just one or outside unlicensed estimators with no professional license is going to be in trouble and so will those making the estimates. Just read the statute.
          I think the statute was enacted in part to prevent unlicensed people form placing values which will go into the making of claims. The legislature and Department of Insurance want to protect consumers and ensure that people making estimates of value which go into a claim are under their jurisdiction.

      • Chip Merlin


        Thanks for your comment. I would suggest you read the response I made to James Purcell. I also point out that the exception is:

        The term does not

        “include a person who photographs or inventories damaged personal property” but this has nothing determining value. As soon as you put a value on anything inventoried, I would suggest you have to be a public adjuster or a public adjuster apprentice. Just read the definitions further into the law.

    • Chip Merlin


      I would be very careful about working on or providing an estimate on a first party insurance claim for a public adjuster when you do not have a public adjuster’s license. Just read the statute language. You may not like what it says, but here is the language:

      “no person, except an attorney at law or a public adjuster, may for money, commission, or any other thing of value, directly or indirectly:

      (a) Prepare….an insurance claim for an insured….

      “investigate, or adjust a claim on behalf of a public adjuster.”
      So, suppose a public adjuster says to you, “James, can you go out an investigate the damage and prepare an estimate which I will make part of the claim?” If I were you, I would hire an attorney to get an opinion before doing that act unless you also have a public adjuster’s license.
      I am certain that the legislature wanted to stop what some public adjusters were doing which is nothing other than solicitation and having unlicensed third parties do the work of claim preparation.

      • rogerpoe

        Wind/hail storms create reconstruction market work. Insurance claims commonly run alongside that market dynamic.

        As a general contractor – If someone asked me – ‘Can you go out and investigate the damage and prepare an estimate which I will make part of the claim?’, I would agree to go out and Inspect the damaged structure, and prepare a Safe and Sound reconstruction estimate. I would also be paid for that service.

        I do not ‘”prepare” insurance claims for insureds, or “investigate” claims, or “adjust claims” on behalf of public adjusters.’ Once paid – A insured client, public adjuster client, attorney client, or whoever can do with my reconstruction information whatever They want to do with it to (“effect”/”influence”) the claim..Because..They own it, just like the paper it is printed on.

        • Chip Merlin


          All I can tell you Roger is what the law says. Some can disregard it at their own peril.

          • rogerpoe


            Thank you for your reply.

            I, for one, am not looking to ‘disregard what the law says’. Rather;

            1. I want to understand it’s true meaning, and true intent.
            2. I do not want to be bullied out of fair market share.
            3. I do not want others to disregard the law, or to be bullied.

            So – I do need clarification, as, apparently, other professionals do that have commented on this blog.

            Is it your understanding that – My (unbiased and objective) inspection of a insured damaged structure, and preparing a safe and sound reconstruction estimate (by a [public adjuster’s] request) – for My own fair livelihood — would have me now break the law?

  • Bob Cook

    Can you help clear this up in my mind , Example , A Roofer signs an AOB with the Insured for Replacement of the Tile Roof , He then holds the Benefits of the Policy and Steps into the shoes of the Insured , Is he negotiating for Himself , or for the Named insured , Is this a grey area that will continue to be a loophole for the “AOB Door Knockers”

    • Chip Merlin

      I am not certain how that will play out when the person is negotiating for himself rather than the policyholder. I would suggest that contractors be very careful about their AOB contracts and especially what they tell policyholders.
      One of the things lost when the policyholder hires just a contractor is the discussion about how to repair or replace to a more modern appearance and not just rebuilding back the way it was before. In those cases, the damage estimate is theoretical because it is never intended to be put back as is but replaced differently. Public adjusters can help a lot with the description of these policy benefits and options.

  • Dorothy Nicklus

    Interesting that lawyer can charge as much as the property owner allows. I found that many that are represented by an attorney call me after nobody comes to inspect their homes but a settlement was negotiated. Go figure.

  • Ginelle Baker

    What do I find the actual Florida State law regarding this issue?