Rep. Sean Shaw
Rep. Sean Shaw

House Bill 911, effective January 1, 2018, was filed by Representative Sean Shaw and enacted by the Florida Legislature to amend Fla. Stat. § 626.854, which protects policyholders through the regulation of public adjusters. Chip Merlin discussed this new law in detail in his post on July 2, 2017. In requiring public adjusters to be licensed by the State of Florida and defining the scope of their services, the Florida Legislature also excluded the growing practice of unlicensed public adjusting and the unauthorized practice of law. By defining what a licensed public adjuster can do for policyholders, the amended law notifies contractors, vendors, accountants, and others known after a catastrophe to unlawfully solicit business to act in the scope of a public adjuster. One service to policyholders that was recently questioned was whether an appraiser is required to be licensed in Florida. In the answer to this question, many others will find the answer to other services related to public adjusters, which do require a license.

The appraisal provision in property insurance policies generally require a fair and competent or disinterested appraiser, with some policies defining those terms. But, is that all that is required, and how far can the appraiser go in determining the amount of damages? Does the appraiser also determine the cause of the damage in calculating the amount of covered damages? To answer these questions, many states have developed statutory law governing insurance and a body of caselaw grounded in fair notions of public policy.

Many states do not directly regulate property insurance appraisers through a specific licensing statute. Florida legislators made several attempts at appraiser licensing before a bill introduced by House Representative Sean Shaw, now a candidate for Florida Attorney General, succeeded in accomplishing this in House Bill 911, where the Legislature found “that it is necessary for the protection of the public to regulate public insurance adjusters and to prevent the unauthorized practice of law.”1

States vary in the scope of appraisal, some allow appraisers and public adjusters to negotiate claims on behalf of policyholders; others find that negotiation of the claim or settlement is in the purview of law and an appraiser or public adjuster attempting to negotiate or settle the claim would be engaging in the unauthorized practice of law. Further, most states now have statutes regulating the practice of public adjusting, including statutes regarding licensing requirements and contract provisions with policyholders. But where do appraisers fit in? Sometimes the answer may be in the who by statute can present, investigate, and adjust the policyholder’s claim.

Florida’s recently amended adjuster statutes,2 effective January 1, 2018, have further clarified the who:

Section 1. Subsection (1) of section 626.015, Florida Statutes, is amended to read:

626.015 Definitions.—As used in this part:

(1) “Adjuster” means a public adjuster as defined in s. 626.854, a public adjuster apprentice as defined in s. 626.8541, or an all-lines adjuster as defined in s. 626.8548.

Section 2. Subsections (7) through (19) of section 626.854, Florida Statutes, are renumbered as subsections (6) through (18), respectively, subsection (1) and present subsections (6), (7), (11), (18), and (19) are amended, and a new subsection (19) is added to that section, to read:

(1) A “public adjuster” is any person, except a duly licensed attorney at law as exempted under s. 626.860, who, for money, commission, or any other thing of value, directly or indirectly prepares, completes, or files an insurance claim form for an insured or third-party claimant or who, for money, commission, or any other thing of value, acts on behalf of, or aids an insured or third-party claimant in negotiating for or effecting the settlement of a claim or claims for loss or damage covered by an insurance contract or who advertises for employment as an adjuster of such claims. The term also includes any person who, for money, commission, or any other thing of value, directly or indirectly solicits, investigates, or adjusts such claims on behalf of a public adjuster, an insured, or a third-party claimant. 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.

* * * *

(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.

Section 4. Section 626.8548, Florida Statutes, is amended to read:

626.8548 “All-lines adjuster” defined.—An “all-lines adjuster” is a person who, for money, commission, or any other thing of value, directly or indirectly is self-employed or employed by an insurer, a wholly owned subsidiary of an insurer, or an independent adjusting firm or other independent adjuster, and who undertakes on behalf of a public adjuster or an insurer or other insurers under common control or ownership to ascertain and determine the amount of any claim, loss, or damage payable under an insurance contract or undertakes to effect settlement of such claim, loss, or damage. The term also includes any person who, for money, commission, or any other thing of value, directly or indirectly solicits claims on behalf of a public adjuster, but does not include a paid spokesperson used as part of a written or an electronic advertisement or a person who photographs or inventories damaged personal property or business personal property if such person does not otherwise adjust, investigate, or negotiate for or attempt to effect the settlement of a claim. The term does not apply to life insurance or annuity contracts.

Section 6. Subsection (3) of section 626.8584, Florida Statutes, is amended to read:

626.8584 “Nonresident all-lines adjuster” defined.—A “nonresident all-lines adjuster” means a person who:

(3) Is licensed as an all-lines adjuster and self-appointed or appointed and employed or contracted by an independent adjusting firm or other independent adjuster, by an insurer admitted to do business in this state or a wholly owned subsidiary of an insurer admitted to do business in this state, or by a public adjuster or a public adjusting firm other insurers under the common control or ownership of such insurer.

Section 8. Subsection (3) of section 626.864, Florida Statutes, is amended to read:

626.864 Adjuster license types.—

(3) An all-lines adjuster may be appointed as an independent adjuster, public adjuster apprentice, or company employee adjuster, but not more than one of these both concurrently.

The amended statutes have made clear that the who is only a public adjuster and/or an attorney at law that may for money, commission, or any other thing of value, directly or indirectly, prepare, complete or file and claim for an insured; negotiate or effect the settlement of a claim; or investigate, or adjust a claim on behalf of the insured. Since the task of an appraiser is to investigate, adjust, prepare or complete the claim, and negotiate or effect the settlement of a claim, an appraiser that is not a licensed adjuster may regrettably be found to be adjusting without a license or engaging in the unauthorized practice of law.

Under Fla. Stat. § 626.8738, public adjusting without a license in the State of Florida is a third-degree felony:

626.8738 Penalty for violation.—In addition to any other remedy imposed pursuant to this code, any person who acts as a resident or nonresident public adjuster or holds himself or herself out to be a public adjuster to adjust claims in this state, without being licensed by the department as a public adjuster and appointed as a public adjuster, commits a felony of the third degree, punishable as provided in s. 775.082, s. 775.083, or s. 775.084. Each act in violation of this section constitutes a separate offense.

Florida has been a front runner in protecting its policyholders. The need for setting a standard for well-trained and qualified policyholder advocates to aid policyholders in presenting, investigating, and adjusting their claims to level the playing field with the insurance companies’ adjusters was recognized by the Florida State Legislators. Public policy demands that policyholders are protected from those that would seek to prey upon their misfortune and provide less that honorable services in the adjustment of their insurance claim. Well done, Sean.
_______________________________
1 House Bill No. 911, Chapter 2017-147, Section 2. Subsections (7) through (19) of section 626.854, Florida Statutes, are renumbered as subsections (6) through (18), respectively, subsection (1) and present subsections (6), (7), (11), (18), and (19) are amended, and a new subsection (19) is added to that section, to read: 626.854 “Public adjuster” defined; prohibitions.—The Legislature finds that it is necessary for the protection of the public to regulate public insurance adjusters and to prevent the unauthorized practice of law.
2 Underlines are added text; strikes are deleted text.

  • Edward Fako

    I respectfully disagree, although it is a valid warning point made.

    Determining the Amount Of Loss is not necessarily in the spirit of acting as an Insureds Appraiser. The most distinct difference between Adjusting and Appraising is that most States, although I am unsure about Florida’s Appraisal Statutes and Case Law on this point, do not allow for Appraisers to determine Coverage. Sometimes various singular aspects of what Courts have deemed as Coverage, such as Matching do get included in some States Appraisals, and Scope Of Work is being allowed in more States, yet the primary impetus of the very first task that an Adjuster investigates, is to determine Coverage Liability on the Insurance Carriers behalf.

    That alone distinctly separates the two positions as unique and different. I do see much room for argument that supports this articles premise though and would not desire to be the first one to create groundbreaking Case Law, so unless the verbiage of this Statute or an Appraisal specific Statute makes a distinct definition of acceptable duties of an Insurance Claim Appraiser, it would be safer to steer clear of problems if that was the States Intent.

    • Deborah

      Edward, Thank you for your comment. As noted, states do vary in the scope of appraisal. Coverage and liability determinations are considered contract interpretations, which involve the practice of law, which a public adjuster and appraiser shall not do. However, you correctly state that an adjuster on behalf of an insurance carrier seems to do just that in many instances. The issue Florida and many other states seek to address in legislation such as this, is to deter individuals who solicit catastrophe victims to offer adjustment services using titles such as an
      appraiser, forensic accountant, or consultant in order to skirt the public adjuster
      licensing requirements, which are put in place to protect the public. And yes, I
      have had that discussion with others—you do not want to be the one finding
      yourself as a test case on the new law. I appreciate your comments, Thank
      you, again. Deborah

      • Edward Fako

        Deborah,

        If determining Coverage and Liability is deemed exclusive to the Practice Of Law, how then are any Insurance Carrier Staff, Desk or Independent Adjusters enabled to make such decisions?

        Is there a Statutory loophole for the Insurance Carriers personal that is not reciprocal to Policy Holders representatives?

        • Deborah

          Good afternoon, Edward. I hope you enjoyed the Holidays. More often than not, people conduct business with one another through contracts and agreements without any problems. It is when the terms and conditions of those contracts or agreements (coverage and liability in insurance contracts) are disputed or interpreted differently by the parties that the contract / agreement may require a legal interpretation for resolution. Carriers have in-house counsel to advise claim representatives and independent adjusters of the carrier’s position when disputes arise regarding the terms and conditions of the policy. However, as noted, it does appear that those determinations are the opinions (legal interpretations) of the claim representative or independent adjuster, as the coverage position and/or denial letters are signed by them, and not the carrier’s counsel. We would love to hear from claim representatives and independent adjusters on this issue. Thank you, Edward.

          • Edward Fako

            Thank you Deborah,

            Even more directly on point, when an Insurers Appraiser absolutely REFUSES to acknowledge that providing a Uniform Comparable Reasonable Appearance using Like Kind And Quality materials is even open for being Appraised.

            Okay, let’s just use the “M” Word, “Matching” in Illinois. As your colleague, Edward Wahoo wrote, Matching is Appraisable in Illinois per Windridge Condominiums v Philadelphia Indemnity Insurance Company.

            Yes, theoretically the Umpire will settle that, but what if there trained opinion considers Matching a Coverage Issue which is not applicable for being Appraised?

            I have previous Illinois pre events that also validate that.

            Is there stance legitimate? Is it because it was a Federal Court Ruling, (Based On Illinois Law Though), or does the venue matter?

            This Opposing Appraiser has been guided throughout by AmFams Appraisal Liaison with a documented recording she made to the Policy Holder advising them that there is No Way that they are owed a complete new roof. It is a unique shingle size and design and weight, discontinued in 2009. The exposure is 1.5X5X the standard re real on all other shingles. No ITEL comparable match is available.

            This goes on claim after claim in the Appraisal process.

            Should the Policy Holder seek a Declaratory Action Judgment to validate that Windridge v PIIP as Ruled means precisely what the Court stated, that Matching is Appraisable?

            Thank you on advance for the consideration of your time.

            Edward Fako
            InsuranceClaimAppraisals@gmail.com

    • Edward,
      I think the situation where unlicensed people are soliciting policyholders as “appraisers” is what is going to get people arrested and charged. It is also the practice of law to advise others to pursue appraisal versus alternatives.

  • Robert Pearce

    A step in the right direction but not far enough. There should be a separate license for Appraisal as there is with P. A. services.

  • ND

    Thank you for helping to spread the word about this. Too many people don’t understand that this law affects them if they are not attorneys or licensed public adjusters.