The Florida Department of Financial Services (DFS) has issued an email authorizing Florida licensed public adjusters to hire anybody to make estimates of damage. This email corrects my latest two blogs which indicated that the OIR wanted to prevent those not licensed from working on insurance claims by determining valuations of loss and estimates of damage.

How one can write an estimate of a building, equipment or personal property loss without investigating the loss is beyond my understanding—but not beyond those running the Florida Department of Financial Services. The Florida DFS will allow any third party, including a person who has lost his or her license to work as a public adjuster, convicted felons, unlicensed contractors, contractors who may have lost their licenses, and unqualified people, to write estimates of damage. The only requirement is getting a public adjuster to hire them.

Here is the text of an email from the DFS in response to a public adjuster’s inquiry prompted by my prior two posts on this matter. He lists no qualifications for the third-party a public adjuster can hire to write an estimate for a first party insurance claim:

Hiring a third-party to prepare an estimate on your behalf would not be a violation, so long as that individual provides the estimate to you and does not does not otherwise solicit, adjust, investigate, or negotiate for or attempt to effect the settlement of a claim.

Thank you,

Jeffrey L. Young, MPA
Regional Administrator
Bureau of Investigation
Division of Insurance Agent & Agency Services

The impact of the Regional Administrator’s ruling cannot come at a better time for those who do not have public adjuster licenses and have no intention of obtaining one but are eager to start working on Florida insurance claims. They can make a deal with a public adjuster for a percentage of the settlement or of the estimate amount and provide those estimates to the public adjuster.

So, let’s look at the practical impact. Public adjusters who do not have enough in-house manpower or finances to hire or oversee licensed public adjuster estimators can simply hire third parties to make as many estimates as possible. Those public adjusters essentially turn their businesses into solicitation and negotiation businesses. They will give up a part of their fee but make a lot more money because they handle matters in volume.

For policyholders who are supposed to be protected by this regulatory scheme, this may not be so good. They will hire a licensed professional to assist in the claim, but the loss evaluation estimates can be done by a person who is not subject to the professional competence and integrity requirements that are required for the job. In sum, the DFS does not care who determines the amount of estimated loss so long as it is sent to the insurance company by the licensed public adjuster.

For all of you who were upset with me for explaining who could not write estimates for insurance claims in Florida, including those with criminal backgrounds, I apologize because I must have been mistaken. The law that I helped to draft is apparently not the law—at least according to those who are supposed to enforce it.

Obviously, I do not think this is best for policyholders. I have always suggested that the public adjustment trade should look at rules and regulations from the viewpoint of the policyholder—What is best for the policyholder even if it is not economically best for the public adjuster in the short term? The profession of public adjusting certainly took a step backwards with the Department’s view of the matter.

  • James Purcell


    I understand and share many of your concerns. I can’t stand some of the ‘loss consultants’ I know are out there (really soliciting for attorneys) but I think there could be a reasonable middle ground, such as allowing licensed IA/All Lines Adjusters like myself to write estimates on behalf of a PA. I have no problem with regulation prohibiting felons from estimating claims or requiring a bond be posted or some other form of responsibility for the final work product.

    I’ve worked with a considerable number of PA’s who over inflate estimates because they have a financial interest, or are so unskilled at properly using Xactimate that they underestimate a loss by thousands of dollars. In NJ, contractors were overwhelmed with the requirements of providing flood estimates that were 1,000’s of lines items long and took us days to prepare on their behalf. Our work helped ensure their bids were competitive, met FEMA and industry requirements and freed them up to focus on serving the client and managing their workers.

    These situations hurt the insured, too. We have always striven to be impartial, reasonable and accurate when preparing our estimates and I think we ultimately provide a benefit to the insured and the public adjuster. Jen and I work for insurance carriers, insureds (as appraisers), contractors, mitigation contractors, attorneys and just about every potential party involved with a claim, which I think helps us maintain or ‘middle ground status.’ I’m glad we’re not being forced to “choose sides.”

    • HelionPrime

      Well said!

  • HelionPrime

    Public adjusters can send many vendors to a property; roofers, plumbers, EMS technicians, leak detection services, etc… Can’t we at least trust that they will do right by their customers and send quality people in? Is more regulation really the answer?

  • rogerpoe

    Chip – I have to agree with the the Florida Department of Financial Services conclusion.

    Why is that?

    Because Public Insurance Adjusters can verify that physical damage scope, legal reconstruction protocols, and viable reconstruction costs are safely and soundly accounted for by expert reconstruction estimators/consultants.

    Conversely – They can also weed out those that are not experts.

    As a personal note..Over the years, I have deeply appreciated your efforts to make sure our fellow neighbors everywhere are not taken unfair advantage of by unscrupulous insurance companies, adjusters, engineers, contractors, attorneys, or others, after a disaster situation.

    Thank you for that dedication to do the right thing.

    – Roger

  • Kyle Larson

    At the end of the day is it not the insurers duty to fully investigate the loss? I can write estimates all day long, but I can’t force insurers to accept what I put in the estimates. If the insurers have competent folks on their side they should be able to sniff out the BS.

    To me the bottom line is that there is always bad actors, on all sides, and I have yet to see any state regulation that has figured out how to remove greed from the human condition.

    • You make a very good point—insurance companies have a duty to fully invest age facts of coverage and evaluate the value of the loss.

      Public adjusters are also hired to evaluate the loss for the policyholders. They can do this only because licensing that has been hard fought by many over a long period of time (usually through those that have been in NAPIA leadership) was won by limiting those that do this to those that are public adjusters. Otherwise, the ability to represent people as public adjusters has been historically been outlawed as the practice of law Arkansas still takes this view.

      A relatively new industry has formed of estimators that now write loss evaluations for public adjusters and many of these people are not licensed in any form or fashion.

      People new to public adjusting often forget where their ability to practice came from and the promises made to regulators to get the licensing passed in the first place.

      Many public adjusters are now allowing completely unlicensed people to engage with policyholders to make estimates of value to be delivered to insurance companies. These public adjusters are often paper pushers who cannot even explain the
      estimate because the Public Adjuster did not go to the loss except to solicit the loss.

      Pretty pathetic public adjusting if you ask me. And, the insurance industry is keeping score of this trend claiming wrongfully inflated claims by unlicensed people working under public adjusters is harming the public and the social product of insurance.

      I personally had to go to Tallahassee in 1993 to help prevent public adjusting from being outlawed because of such antics. But, few remember those days. Many of today’s public adjusters were in grade school when this happened. But it can happen again.

      There is no right to be a unlicensed adjuster—it is licensed by the state. If the trade allows bad acts to occur, the state may legitimately take the right away as it tried to do in 1992-93. Many insurance company claims personnel think virtually every claim
      submitted by a public adjuster is intentionally inflated and they have stories to back it up. Legislators can vote to write the licensing law without public adjusters being included. Then what?

      • James Purcell

        To my understanding, the public adjuster submitting a wrongfully inflated estimate is ultimately responsible for what is in the estimate regardless of whether he prepared it or someone else did. Therefore, I would also expect a PA submitting fraudulent estimates prepared by someone else would just end up writing their own wrongfully inflated estimate.

        Might be self serving, but I’ve always had a problem with carriers and PA’s writing estimates at all. They both have significant financial interests in the outcome. Whenever you buy or refinance real estate, the property is not valued by the parties to the contract but a disinterested, specially trained and licensed real estate appraiser. I would bet if both the insured and insurance company were required to utilize disinterested, expert estimators or contractors NOT performing the work, we would see a significant decrease in the margin between the two positions on repair costs. The carrier and PA could still negotiate between the two reports (as well as application of coverage) and the insured would have the benefit of having their repair costs evaluated by two independent professional estimators.

        Just my two cents but it’s clear the industry is well served having you as a prominent voice and leader.

      • Kyle Larson

        Then what?, ( and I don’t think you are going to like my answer) Open up what a PA is. By this I mean allow PA’s to work for, or even be a contractor.

        I know what your saying, “but Kyle this will create a massive conflict of interest”

        Does it really though? Don’t PA’s already have a built in conflict of interest? Their pay is directly based on the dollar amount of the claim. The bigger the amount, the more they get paid. If they had skin in the game and had to actually incur the costs to get the work done, out of the settlement they secured, they would most likely become much better at their job.

        I know the other thing your saying is, “but Kyle, the insureds will get screwed because then the PA/Contractor will cut corners so they can keep more profit” or “They will wrongfully inflate claims so they can get fat”

        “Hogs get slaughtered”

        If the contractor/PA was licensed and regulated, an insured, or insurer, would have a regulatory body to turn to if a contractor/PA did try and do less work then the scope, and price, they secured, was allowing for and said regulatory body could be the “slaughterhouse”

        I believe this sort of solution has a ton of merit. It would force contractors who wanted to engage in the insurance restoration game to become ethical, or suffer the consequences, and it would provide help for consumers who’s claims are well below an amount PA’s want to get involved with, which is in reality, by a large margin, the vast majority of claims.

        I have spent way to much time in the last 15 years thinking about these sort of things and I look forward to your reply

  • Jim Johnson

    I tend to agree with Mr. Purcell. In addition, I do feel
    people employed by the insurance carriers, including independents and staff
    adjusters should have more proficiency requirements. I have met many staff
    adjusters who write grossly under figured estimates, and independents who go
    out on substantial losses never having handled a claim before. I assume in the
    interests of getting claims handled the Florida Department of Financial Services
    with let anyone working for a company have a 6 month temporary license.

  • Jim, Roger and everybody making a reply,

    Thank you for your comments and discussion. I have a blog post which will be
    published on Monday which will address the underlying reason why I think the
    law is good for policyholders and public adjusters.

    I would say that if I had to help draft this today, I would probably have some
    exception language for insurance agents somewhat aiding and assisting and
    licensed Florida contractors writing estimates for work or repairs to be done
    or under a licensed public adjuster. Insurance agents pointed this out shortly
    after the law came into effect. I had a discussion with Brian Goodman at the
    First Party Claims Conference in Providence about general contractors writing
    estimates for he work they intend to do.


  • Joel

    I used to write estimates for several PA’s when I was an IA, and when I flipped my license, they all went away. I do not know a single PA who will allow another PA, who is a competitor, to write their estimate. Some law firms will.

    There was even one PA who I used to write who shall remain unnamed that would not even give me the address of the loss, just send me his scope notes, which looked like spaghetti. Such is the level of paranoia, hence loss consultant. They can’t take your business, only improve it. But I agree with Chip on this, I would never use them.