Scott Johnson

Insurance lobbyist Scott Johnson is a bulldog advocate for the insurance industry. He usually is trying to make policyholders, their attorneys or anybody other than the insurance claims executives and adjusters look bad to support the insurance industry’s legislative efforts. I fell out of my chair when he described his own personal claim and why the insurance industry needs strong oversight and civil penalties to keep it in line.

Here is his November 11, 2018 blog post:

I may have been in the insurance industry for 40 years, but…when it comes to Florida’s mediation statute, I’ve been a lay person. I had no idea how useful and easy (and free) state sponsored mediation could be. That’s until December 2010 when, late one holiday evening, our cozy fireplace popped a small flaming ember onto the rug immediately in front of the hearth.

In the seconds it took to find the TV remote and pause our movie, locate the appropriate fireside tool and flick the menacing cinder back from whence it came, a silver-dollar sized hole was seared into our high-end, deep pile carpet.

Anticipating our annual Christmas party my wife and I covered the scorch with a small foot stool. Later, I would patch it, hide it or, maybe, just ignore it.

My wife did not agree. Despite its small size, she was not content with a black spot in the middle of our main living space.

And so this instructive story begins.

I called my insurance agent and soon my insurance company dispatched a local claim representative accompanied by a local carpet expert to examine the damage. The carrier’s expert said…”It’s for sure this carpet can’t be patched. It’ll never match. You’ll have to replace the whole thing.”

My wife was giddy.

Small samples of the carpet cut from the back of our coat closet were sent to a laboratory in Indiana which confirmed the price per square foot. Unfortunately the insurer was only going to pay for the carpet in the room where the damage occurred and not in the two adjoining rooms.

I received a check for $2,200 ($3,200 minus a deductible of $1,000). It was a precise and accurate computation based on the value of the carpet and the square footage in the room where the damage occurred.

That did not satisfy my wife, an interior decorator who was no longer giddy.

So we got two estimates on our own that included carpet replacement in the two adjoining rooms. Both estimates exceeded $7,000. The lowest was $7200. I told the adjuster I needed $7,200 otherwise I would have two different colored carpets and an angry wife. I explained it’s an open concept with a great room and two adjoining rooms that flow into it, all of which can be seen from the front door. I said, the value of the home will suffer if the carpet doesn’t match.

At this point I should say that I had been very careful not to let the company know who I was. I didn’t want preferential treatment. I just wanted what I had paid for and what the contract said I was entitled to.

The adjuster said, “Sir, we have a line-of-sight rule”. I said, “Show me where it says that in the policy.” He said. “Sir, we don’t cover cosmetic damage”. I said, “Show me where it says that in the policy.”

Finally, I referenced Florida’s “Pair and Sets” statute with language that’s been used to require replacement of undamaged carpet in adjoining rooms. (See NOTE #1 below)

Also helpful was that, along with all the other policyholders of this carrier, I received an unrelated notice that when/if my policy renews it would be amended to limit coverage for “cosmetic damages” to $10,000.

I called the adjuster. Obviously cosmetic damages were covered, I explained, “why would you ever apply a limit to something if it isn’t even covered?” He was getting irritated.

Finally, totally frustrated, he told me that if I wanted any more money, I would have to seek state sponsored mediation, which I immediately did with just a phone call to the toll-free number provided in the envelope that transmitted the $2,200 claim check, which I never cashed. (See Note #2 below)

It’s been eight years since this happened but, my recollection is that the day before mediation the carrier’s attorney called and offered a higher settlement. “In grey area’s such as this” she said, “we see no need for the expense and hassle of mediation if we can reach an acceptable payment number with you.”

Ultimately, they agreed to give me $6,000 minus the $1,000 deductible for a total of $5000. If I had hired a public adjuster, it would’ve cost me up to 20% of $6200 ($7,200 minus $1000 deductible) a maximum yield of only $4800 minus the PA’s 20%. So I saved $200 by making one phone call.

While this case might be too small for most attorneys, it would have been better to hire one rather than a public adjuster as attorney fees are usually paid by the insurer.

Here’s the ironic conclusion.

I was lazy, and though I intended to, I didn’t replace the carpet. We just covered it with a small area rug and pledged to fix it someday. Someday never came, but…one day a carpet repair man came to the house and I showed him the scorch in the living room and explained how an expert from the insurance company said it couldn’t be repaired.

He exclaimed, “I can fix it and no one will ever know it’s there! I do it all the time.”

“How much?” I asked incredulously. “I wouldn’t charge anything for a job that easy”, he said. Then, he went to the closet, cut a small piece of carpet from the back corner, patched it over the scorch and within ten minutes… Voila’ …it was repaired.

Eight years later, I still have the same carpet and neither me nor my wife, “eagle-eye”, can even find the patch job.

I did not send the $5,000 back to the insurance company. (see Note #3 below).

Scott Johnson gets the same treatment that many policyholders receive every day from some insurance companies. Trained adjusters know they have to pay for cosmetic damage and they know the insurance laws regarding matching. Johnson just exposed the intentional scams so many policyholders face every day by the same insurance industry he is paid to represent. He was a potential victim trying to be duped by an insurance adjuster that knew better. Fortunately, Scott Johnson’s tenacity, self-education and experience helped him overcome this wrongful claims practice my clients and Merlin Law Group attorneys face every day.

Johnson should be congratulated for exposing another example of insurance company wrongdoing which can be shown to legislators and insurance commissioners.

Quote For The Day

“Businesses have moved from doing business to doing lobbying, and I think that’s a very bad thing.”
—Angus Deaton

  • Tad Balzer

    The important thing here is that clearly, this is not an isolated incident or the act of a bad adjuster. This is a result of adjusters taught to behave this way. The good ones do the right thing the bad ones get promoted.

  • Anthony

    If you used a Public Adjuster you likely would have got paid a bit more. There was likely smoke damage that went unaddressed, not to mention the O&P which may also have been part of a proper settlement. Was the floor under the carpet damaged? Debris removal and other coverages coukd also have been triggered. Dont be so foolish to think you dont need representation or that you ‘saved’.

    Think of all the time that was also wasted instead of getting a proper settlement using a public sdjuster in the first place.

    • Anthony

      One more thing.. contents manipulation & maybe even contents storage to the estimate. This discussion reminds me of an old adage
      He who represents himself……
      What’s even worse is that he believes he did the right thing by not using a licensed professional.

      • Anthony,

        Bingo! You are right for so many reasons.

        And in this case, maybe it was just the loss of money and the inconvenience of staying in a to be remediated area.

        But, there are many occasions that by not moving out or not securing the other to be remediated areas, policyholders and others actually are physically endangered as a result of the by product dust and other safety issues. Many adjusters inadvertently overlook, hope will not occur or even intentionally just look the other way knowing that asbestos, lead, mold and other by-products of the construction or loss harm the policyholder who is left to stay in the area of remediation.

        Thanks for sharing this important point.


  • Edward Fako

    Did Mr. Scott Johnson admittedly commit Insurance Fraud by opting for full RCV Coverage Payment without proceeding with the Replacement of his damaged carpeting?

    It is typical that the Policy Holder needs to state that they either intend on, or have already contracted and done the work involved typically within 180 days of submitting their request for the RCV portion of the claim.

    This seems to show the level of this mans ethics and integrity and speaks volumes, particularly when such a big fuss was made about how his Wife, being an Interior Designer could not live with the damaged carpet burnt with the fireplace ember.

    How disingenuous!!!

    • shirley heflin

      Very valid points Ed ! Maybe that’s why Mr. Johnson waited 8 years to make this public (i.e., waiting on the statutes to toll).

    • Gary Williams

      BS. It was a compromise settlement. Insured had no duty to replace anything. Nothing unethical or immoral about that.

  • shirley heflin

    Dear Chip:

    It took Mr. Johnson 8 years to divulge and share with us the “wrongful claims handling” experience he experienced? I guess he gets a “thanks” for that….but that’s it.

    Sometimes one has to experience the industry they represent and champion for to see if their efforts are worthwhile. In Mr. Johnson’s case, this may have changed his mind…..or not.

    Tampa, FL

  • shirley heflin

    Dear Chip:

    P.S. The Johnsons take the time to find their remote, pause their movie, “…locate the appropriate fireside tool…and then “flick” the fireplace’s “…small flaming ember…back from whence it came, a silver-dollar sized hole was seared into our high-end, deep pile carpet..”

    Do these people live in a Unicorn world or something? When you see fire you IMMEDIATELY take action to put it out (not find the remote, pause the movie, etc.)!! If the defense had known this, they could’ve asserted a mitigation defense.


  • Jim Johnson

    A classic story, the insurance carrier brings out a so called expert to say the carpet couldn’t be satisfactorily repaired (probably someone on their direct paid contractor program)!

    A more common sense settlement would have been hiring a real carpet repair specialist to go out to see if the carpet could be satisfactorily repaired and have the carrier pay the small charge to see what happens. Small burned from embers, cigarettes are pretty easy to repair if a donor piece is available.Sometimes damage in high traffic areas such as a hall way are not as repairable as the carpet is worn in this area and the donor piece from a closet might not be!

    Without more facts, it is hard to say of deprecation withholding was involved, sometimes the adjuster will call the settlement a repair and then pay RC upfront. Once the case is reviewed by a mediation attorney, they are surely not going to apply depreciation at that point.

    Anthony has a point too as often adjusters miss things pertinent
    to the loss, such as clean-up, scratched base trim, contents handling, debris
    removal, and so on! However, O&P is debatable
    if just replacing carpet!

  • Shirley, Edward, Jim, Tad et al,

    Thank you for taking the time to make some very important comments.

    I did not indicate that Scott Johnson did anything unethical regarding the
    claim. While I have significant problems with his lobbying rhetoric which is
    often amateurish mudraking rather than factual and logical, I do not think he
    did anything unethical or is a bad person. Scott Johnson is an insurance lobbyist
    doing the best he can with the talents he has.

    Instead, the insurance company claims actions were very unethical. If they
    would break the law to underpay his claim, think how they treat less
    sophisticated policyholders.

    Finally, the fact that his wife was “giddy” about having a replacement of her
    carpet, there is nothing wrong with that. Policyholders pay extra money to
    obtain a Replacement Cost policy. You get new for old if the old item gets
    damaged and the damage is not excluded and cannot be repaired back to pre-loss

    The insurance company should be happy and “giddy” to pay their customer as well
    because that is what their product is advertised to do. But, the insurance
    company mangers seem “giddy” to obtain the premiums and revenues while making
    these promises and very greedy and downright angry when their customers ask
    them to pay what they promised to do in the first place.

    • Edward Fako

      As always, I Thank You for your time, efforts and dedication.

      You are Correct Chip about your point…..

      You definitely did not imply any such allegations. And someone less savvy surely would have been steamrolled into accepting the original offer.

      ***** Is it proper insurance policy procedure to collect the entire RCV payment without even contracting for the full replacement, let alone not ever having it done in the 8 years that had elapsed? *****

      In your position, I understand you choose not to incite a potentially formidable adversary, which is a wise choice for such a small matter.

      Only when the peril became a “Fortuitous Event”, did Mr. Scott Johnson suddenly become naive about the workings of an Insurance Claim. Only when he gained Thousands of Dollars in RCV payments did he feel the Adjusters Rulings were the “Final Word.”

      “… but…it was not fraudulent or even dishonest, not even close. If I’d sent the money back it probably would not have been accepted and by the time the carpet was patched I was already with another insurer. Besides, it was the insurer’s expert that declared the scorch to be unrepairable and I thought that was the final word.

      Yet, during the negotiations of the claim, this was his and his Wife’s disposition towards the damage.

      Recall how his self described Wife’s Eagle Eye from being an Interior Decorator absolutely could not live with the charred appearance.

      “My wife did not agree. Despite its small size, she was not content with a black spot in the middle of our main living space.”

      “Here’s the ironic conclusion.

      I was lazy, and though I intended to, I didn’t replace the carpet. We just covered it with a small area rug and pledged to fix it someday. Someday never came”

  • rogerpoe

    I wonder if Scott Johnson, in performing all of his (contractual/policy) duties after the loss, made claim for his labor required to mitigate the loss through the whole restoration dynamic.