An excellent and successful insurance company defense attorney, Bill Berk and I were on a panel presentation at the 2019 Windstorm Insurance Conference earlier this year. Berk reminded the audience of adjusters that under Florida law, they should not be saying or implying bad things about each other. He noted this Florida regulation:

A public adjuster shall not represent or imply to any client or potential client that insurers, company adjusters, or independent adjusters routinely attempt to, or do in fact, deprive claimants of their full rights under an insurance policy. No insurer, independent adjuster, or company adjuster shall represent or imply to any claimant that public adjusters are unscrupulous, or that engaging a public adjuster will delay or have other adverse effect upon the settlement of a claim.

I can imagine how many public adjusters and company or independent adjusters reading this post are thinking about times they may have forgotten this ethical regulation.

I raise this regulation because a public adjuster wrote me about a regional independent adjustment firm, Residential Property Adjusting, Inc. from Connecticut, Rhode Island, and Massachusetts that expressly tells the public on its website:

Like most insurance specialists, we strongly recommend AGAINST hiring a public adjuster. However, should you choose to make that decision there are a few things you should know. First, understand that your insurance carrier is legally and ethically bound to handle your claim under the terms of your insurance policy and it is interested in resolving your claim as quickly and fairly as possible. In other words, give them a chance to do the right thing as they usually will.

Second, understand how a public adjuster is compensated. Public Adjusters charge a percentage of your final settlement, usually around 10%. So if your insurance company offers to pay you $100,000 then your hired public adjuster WILL TAKE $10,000 of that amount. Public adjusters will always tell you that this fee is offset by their skills in securing a larger settlement in excess of what the average insured can obtain for himself. In other words, if the damages can be repaired for $100,000 they will try and get the insurance company to settle at a much higher figure like $140,000. What they usually fail to tell you is that your insurance company is only obligated to pay you for either what costs you actually incur or what costs you will incur to have repairs done. It does not owe you any “excess,” and certainly will not agree to pay the bill you incur to hire the public adjuster.

Your insurance company will never object to your hiring of a public adjuster as legally they can’t. But most good insurance companies will assign experienced adjusters to handle the files where a public adjuster is involved. A good insurance adjuster can spot where the public adjuster is falsely inflating a claim or estimate and quickly put a stop to it. Just because a public adjuster creates a massive estimate, does not mean that the insurance company will honor it. In fact 99.9% of the time they will make payments based solely on the ‘insurance company’ estimate created by either their staff employee or an outside Independent Adjuster such as our firm. They will review the public adjusters estimate to see if additional line items are warranted, but that’s usually where it stops.

Also, remember that these outside contractual arrangements with a public adjuster will always be at your expense…..

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It is also important to note that a public adjuster (PA) has no legal authority. They are not an attorney, nor can they act as one. Some public adjusters make the mistake of advising their client to sue an insurance carrier if they don’t get their way. Other than being poor advice, it’s also illegal advice, and the public adjuster (PA) is at risk of losing their license if it is reported to the State Department of Insurance of their violation.

If you ultimately decide to hire a public adjuster (PA) we recommend the following some simple strategies to narrow the selection. If they can’t meet these criteria then we really really really discourage you from hiring them. Here is the advice:

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2. Ask for a timeline provision in your contract. Specifically, request that they settle your claim within 45 days from being hired or the contract is void and no payment is owed. Unfortunately, many public adjusters will drag out files for up to 6 months or a year (even more at times).

I have certainly stated incorrect opinions in the past and am not close to being perfect. Perhaps after reading this blog post, the managers of this independent adjusting company will have a change of heart and remove this position on the topic.

Until then, any attorney, public adjuster or policyholder dealing with this independent adjusting firm should keep this as evidence. It reads like a similar script which some insurers wrongfully teach adjusters how to dissuade policyholders from hiring public adjusters and shows a bias against the policyholder getting professional and licensed help in the adjustment of their property insurance claim.

Before cheering too loudly, I want to suggest that any public adjuster holding a Florida license should immediately audit their websites to make certain that they are not in violation of the regulation above. Some clever and unfriendly insurance attorneys and adjusters may be checking your public adjuster websites as soon as they finish reading this post.

I suggest those interested in this topic read, And Goodwill to All–Unless You Are a Public Adjuster, where it stated:

Dogs and cats. Oil and water. I predict the civility Dan Odess suggests in his article will not be acknowledged by many on the insurer side simply because it came from a public adjuster. For adjusters with a pre-determined attitude, no matter what the truth may be, their mind is already made up.

And remember, such acts in many states can result in fines and possibly cost one’s license or livelihood in the property adjustment business. So, let’s be nice to one another out there in the adjustment world. It is tough enough.

Thought For The Day

Don’t let fear or insecurity stop you from trying new things. Believe in yourself. Do what you love. And most importantly, be kind to others, even if you don’t like them.
—Stacy London

  • Stephen Byers

    Amazing. Insurance companies get 90 days to pay or deny, and that doesnt happen in many cases, with loops holes of “ongoing investigations” and someone is really saying this:
    “request that they [A public Adjuster] settle your claim within 45 days from being hired or the contract is void and no payment is owed. Unfortunately, many public adjusters will drag out files for up to 6 months or a year (even more at times).”
    The Public Adjuster have an invested interest in seeing payments happen as fast as possible. its.

    • wmerlin

      Steve,

      Thanks for your response. It is hard for me to imagine that public adjusters have any motive for dragging out a claim. The claims may take longer because in cases where is a professional for the policyholder critiquing the insurance company’s position or disagreeing with it, the final claim resolution takes longer. But, that has nothing to do with a public Adjuster desiring to drag out the adjustment process.

  • Deidra Muchmore

    I feel the need to state the obvious: Of course a claim will close much faster if no one challenges the settlement offer from the carrier. Having been faced with unprofessional behavior ad nauseam on far too many occasions, (as all PA’s experience), I would appreciate the existence of this particular law in Texas! We expect to have a spirited debate…..but, can we at least have a respectable conversation?

    • wmerlin

      Deidra,

      Thanks for your comment.

      Yes, we should have more respectable conversations. To be fair, I have taught many classes to public adjusters with examples of rhetoric in letters and emails which are not close to professional.

      I have written that when insurance adjusters play in the mud and start gamesmanship to “win” the adjustment or an appraisal, that public adjusters cannot just act like everything is okay with such actions. Indeed, you have to be able to “get in the mud” with them by calling out exactly what is going on and stopping the behavior. However, two wrongs never equal a right and one can still be professional while getting down in the trenches with others not playing fairly or respectfully.

      I always think of insurance defense attorney Janet Brown as a perfect example of how to act and calling out improper and non-respectful actions. She always did it in a professional manner with others whose conduct was not appropriate. She was tough as nails, but with class and professionalism.

      • shirley heflin

        Dear Chip:

        Attorney Janet Brown is a perfect example of a brilliant defense attorney crushing the opposition with class and professionalism!

        Respectfully,
        SHIRLEY HEFLIN
        Tampa, FL