An insurance agent asked the following question relating to the ability of public adjusters to advise policyholders about the types of insurance coverage policyholders should purchase:
. . . Some public adjusters, even “consultants,” have started a new type of business, signing up Florida policyholders to provide advice and compare insurance policies. They provide these additional services if a policyholder signs a public adjusting contract in advance of a loss. [Is this] illegal because those individuals are acting as an insurance agent without a license?
. . .Times have changed. With the advent of the internet, home and business owners can purchase coverage without ever meeting with an agent. Can a public adjuster assist a home owner when purchasing and comparing coverage through the carriers online portal? [Can they] help them compare the policy coverages from different companies? We are insurance policy coverage experts, it would seem our expertise is more than appropriate.
My first thought was, no, public adjusters cannot do this because only licensed insurance agents (and attorneys who are specifically excepted from the law) are allowed to do this. But, I also followed up with insurance agent expert Brent Winans for his opinion. Winans replied:
The blogger makes a good point as far as public adjusters’ qualifications to advise insureds on property insurance coverage issues for a fee, but it doesn’t appear to me that Florida law presently allows it. I reviewed the statutes on both public adjuster and insurance agent licensing.
The agency license statute 626.7315 states:
626.7315 Prohibition against the unlicensed transaction of general lines insurance.—With respect to any line of authority as defined in s. 626.015(7), no individual shall, unless licensed as a general lines agent:…
(4) In this state, engage or hold himself or herself out as engaging in the business of analyzing or abstracting insurance policies or of counseling or advising or giving opinions, other than as a licensed attorney at law, relative to insurance or insurance contracts, for fee, commission, or other compensation, other than as a salaried bona fide full-time employee so counseling and advising his or her employer relative to the insurance interests of the employer and of the subsidiaries or business affiliates of the employer;
Besides “regular” insurance agents, “Unaffiliated insurance agents” are also included as licensed insurance agents who may perform these duties for a fee –
“Unaffiliated insurance agent” means a licensed insurance agent, except a limited lines agent, who is self-appointed and who practices as an independent consultant in the business of analyzing or abstracting insurance policies, providing insurance advice or counseling, or making specific recommendations or comparisons of insurance products for a fee established in advance by written contract signed by the parties. An unaffiliated insurance agent may not be affiliated with an insurer, insurer-appointed insurance agent, or insurance agency contracted with or employing insurer-appointed insurance agents….
The public adjuster statutes 626.854 and 626.865 do not amend the above statutes, so I do not believe public adjusters are permitted to provide policy analysis and recommendations for a fee.
Love public adjusters and what they do for policyholders following a loss. Love insurance agents because without the insurance product first being sold, I would not be doing what I do for a living. Still, public adjusters should not advertise, solicit or charge for services related to the analysis of insurance coverage needs.
Thought For The Day
There are worse things in life than death. Have you ever spent an evening with an insurance salesman?