For most of my career, property insurance underwriting has been understood as the business of evaluating risk. What is the building made of? Where is it located? What is its occupancy? How old is the roof? What fire protection exists? Is the building exposed to hurricane, hail, wildfire, flood, or other catastrophe risks? Has there been a prior loss history? These are the kinds of questions underwriters have traditionally asked before deciding whether to insure a property and at what price.
In commercial property underwriting, this traditional approach has often been summarized by the familiar acronym COPE: construction, occupancy, protection, and exposure. IRMI defines COPE as the four property risk characteristics an underwriter reviews when evaluating a submission for property insurance. Construction concerns the materials and building method. Occupancy concerns how the property is used. Protection concerns fire protection and related safeguards. Exposure concerns surrounding risks posed by neighboring property or the area around the insured location. This is underwriting in the historical sense. It is underwriting the risk of loss.
But something different is emerging in the property insurance marketplace. Some insurers and excess and surplus lines carriers are now using endorsements and policy conditions that do not merely evaluate the risk of fire, wind, hail, water, or collapse. They focus on what the policyholder may do after the loss occurs. They restrict whether the policyholder may hire a public adjuster. They require use of preferred contractor networks. They steer the claim into insurer-controlled repair channels. They discourage independent estimates, independent scopes of repair, appraisal, supplements, and litigation. In practical effect, these provisions do not simply underwrite the property. They underwrite policyholder independence.
That is a historical change, and it deserves far more attention than it is receiving. The issue is whether the property insurance industry is underwriting actual risk or underwriting against policyholders who seek professional help after a loss. Those are not the same thing.
Public adjusters have long occupied a recognized place in the claim process. They are not an underground profession. They are licensed, regulated professionals who assist policyholders with first-party property insurance claims. The NAIC Public Adjuster Licensing Model Act expressly governs the licensing of public adjusters and states that public adjusters assist insureds in first-party claims. The model act defines a public adjuster as a person who, for compensation and on behalf of the insured, acts or aids in negotiating or effecting settlement of first-party claims for loss or damage to the insured’s real or personal property.
Similar to other departments of insurance, Florida’s own Department of Financial Services tells consumers that a public adjuster does not work for or represent the insurance company, and that public adjusters represent policyholders by adjusting and presenting claims to the insurance company for a fee. It also warns consumers to confirm that public adjusters are licensed and notes ethical obligations, including that a public adjuster must put fair and honest treatment of the claimant above the adjuster’s own interests. In other words, the public policy response to public adjusters has traditionally been licensing, disclosure, ethics, and regulation, but not contractual banishment.
Yet, in October 2025, the Florida Association of Public Insurance Adjusters and the National Association of Public Insurance Adjusters announced that they had filed a lawsuit challenging the endorsement in surplus lines policies that allegedly prevents policyholders from hiring public adjusters to represent them in the investigation, estimation, presentation, and processing of insurance claims. According to NAPIA, the complaint alleges that the anti-public-adjuster endorsement is anti-consumer, anti-competitive, unfair, deceptive, and in violation of Florida law. NAPIA further stated that many policyholders discover these restrictions only after experiencing a loss, leaving them without professional support when they need it most. I have reported on this lawsuit as noted in Public Adjusters Strike Back: FAPIA and NAPIA Sue Velocity Risk Over Anti-Public Adjuster Endorsements.
The Insurance Journal reported on the same dispute. It stated that at least six Florida property insurers had opened “a new front” in their battle against public adjusters through policy endorsements that strongly discourage property owners from using public adjusters altogether. 1 The article reported that certain excess and surplus policies included endorsements that “all but bar public adjusters in claims handling,” and that four admitted Florida carriers had also sought approval for optional endorsements granting premium discounts if policyholders agree to avoid using public adjusters.
The reported endorsement language is remarkable. Insurance Journal quoted language from a policy endorsement stating that the named insured “shall not hire, engage, retain, contract with, or otherwise utilize the services of a public adjuster” to inspect, evaluate, or adjust a covered loss. The same article reported allegations that the insurer would not investigate the insured’s loss until the insured provided evidence that any public adjuster representation had been withdrawn.
Think about this from the policyholder’s perspective. The policyholder is now facing damage, uncertainty, delay, and the burden of proving the amount of the loss. At precisely that moment, the endorsement allegedly operates to prevent the policyholder from retaining a licensed professional whose very purpose is to help present the claim. This is not underwriting the likelihood of a hurricane. Instead, it is controlling the policyholder’s ability to challenge the insurer’s view of the claim after the hurricane.
The same type of issue appears in the growing use of preferred contractor networks and managed repair endorsements. Again, I am not saying that every managed repair program is improper. There are situations where reputable contractors, prompt repairs, enforceable warranties, and insurer accountability may serve policyholders well. But a managed repair program becomes a very different animal when it is mandatory, poorly disclosed, tied to forfeiture of coverage, or designed to make independent claim advocacy economically impossible.
A July 2025 Claims Journal article by insurer-side lawyers discussed “Our Option” and preferred contractor network endorsements. 2 The article stated that there has been a move toward policy endorsements requiring participation in preferred contractor networks, often incentivized by a premium discount. It described the mandatory endorsement as requiring the insured, in the event of a covered loss within the scope of the network, to have the damage repaired through the preferred contractor network program.
The article then explained the insurer-side advantage with unusual candor. It stated that when participation in a preferred contractor network is mandatory, the contractor or public adjuster knows there is “no upside” to signing up the insured because the contractor cannot get the job and the public adjuster cannot earn a commission, or the insured must pay the fee out of pocket. The article further stated that insurance companies have realized that mandatory preferred contractor network endorsements provide “a mechanism to remove” individuals who are trying to profit from the claims process, ending inflated estimates, supplementing companies, appraisal demands, and litigation.
This article and statements within it should be studied by insurance regulators, legislators when considering insurance law, academics, and judges who will be deciding these cases. Whether one agrees with the insurer-side argument or not, the admission is important. These endorsements are not merely about bricks, shingles, drywall, fire protection, or distance from the coast. They are designed to affect who participates in the claim process, who estimates the damage, who controls the scope, whether there will be supplements, whether appraisal will be demanded, and whether litigation will follow.
This is underwriting claim behavior. More precisely, it is underwriting against independent challenge and professional challenge.
Insurers will respond that these endorsements are intended to reduce inflated claims, contractor abuse, unnecessary supplements, appraisal gamesmanship, litigation, and premiums. Those concerns cannot be dismissed out of hand. There are bad actors in every part of the property insurance ecosystem. There are contractors who overreach, public adjusters who fail to meet professional standards, and lawyers who file poor cases. There are also insurance company adjusters who under-scope damage, engineers who shade opinions, vendors who know who pays them, and claim departments that reward severity control over full indemnity. A serious discussion must admit all of that.
But abuse by some is not a justification for stripping rights from all. If a public adjuster acts improperly, regulate the public adjuster. If a contractor commits fraud, prosecute the contractor. If a lawyer files a frivolous lawsuit, sanction the lawyer. If an appraisal process is being abused, address the abuse directly. But an insurance policy that prevents a policyholder from obtaining licensed professional assistance after a loss attacks the policyholder’s ability to prove the claim. This is a far broader and more dangerous solution than the problem it claims to solve.
Texas appears to have understood this distinction. In 2023, Texas enacted a statute applying to commercial and residential property insurance policies, including eligible surplus lines insurers when Texas is the insured’s home state, providing that an insurance policy, including an endorsement, may not prohibit an insured from contracting with a public insurance adjuster. 3 It does not say public adjusters are beyond regulation. It says the insurer cannot write the policy so that the policyholder loses the right to hire one.
Florida’s surplus lines framework makes this issue even more troubling. Florida law requires surplus lines policies to disclose that surplus lines insurers’ policy rates and forms are not approved by any Florida regulatory agency. 4 This warning exists for a reason. Surplus lines insurance historically served hard-to-place or unusual risks. It was not supposed to become a drafting laboratory for provisions that would be unacceptable in the admitted market, especially when the insured is a homeowner or small business owner with little practical ability to understand the claim restrictions buried in the policy until after disaster strikes.
The concern is not merely that surplus lines carriers have more flexibility. Flexibility is part of the surplus lines bargain. The concern is that some forms may use that flexibility to restrict the very mechanisms policyholders need to obtain a fair recovery. A policyholder who cannot retain a public adjuster, cannot choose an independent contractor, cannot obtain a truly independent scope, and cannot effectively challenge the insurer’s preferred method of repair has not merely bought a cheaper policy. The policyholder may have unknowingly surrendered practical control over the recovery process.
Disclosure alone will not be enough. A premium discount tied to giving up independent claim help is not meaningful consumer choice unless the policyholder understands what is being surrendered. Most policyholders do not buy insurance while imagining themselves standing in a burned house, a hurricane-damaged condominium, or a water-soaked commercial building trying to prove the amount of loss against a trained insurance claim department. They buy insurance believing that, if the loss happens, the policy and insurer will help them recover.
Insurance is supposed to be a promise of security before the loss and a mechanism of recovery after the loss. When policy forms start impairing the policyholder’s ability to prove the amount of the loss, choose competent help, and challenge an insurer’s estimate, we should stop pretending this is ordinary underwriting. It is claim process control.
There is also an anti-competitive dimension that deserves more serious study. When insurers collectively or competitively move toward forms that discourage public adjusters, independent contractors, appraisal, supplements, litigation, and meaningful challenge, the result may be to reduce the market for independent claim professionals and shift economic power to insurer-approved networks. While that may reduce the insurer claim severity, it will also certainly reduce legitimate payments. The difference between those two outcomes is the entire debate.
The insurer writes the policy, adjusts the claim, selects or influences the pricing platform, invokes policy conditions, controls the preferred repair network, and may then tell the policyholder that independent help is barred or economically pointless. This concentration of control should concern anybody who believes insurance is supposed to be a fair mechanism for indemnity.
I intend to write more about this because I believe it is one of the most pressing issues in modern property insurance. It is getting far too little serious academic, regulatory, and public attention. We have spent years debating premiums, reinsurance costs, litigation rates, fraud, roof claims, assignment of benefits, and attorney fees. Those issues matter, but beneath them is a more fundamental question of who controls the facts after a loss and how those can be challenged if wrong.
If the insurer controls the scope, the estimate, the contractor, the repair method, the timing, the payment, and the policyholder’s access to professional help, then the promise of property insurance has changed. The policy may still look like insurance. It may still be called insurance. But the practical reality is different.
Property insurers should underwrite fire, wind, hail, water, theft, collapse, and catastrophe. They should underwrite roofs, buildings, occupancies, protections, and exposures. They should charge adequate rates for real risks. They should fight fraud. They should not be allowed to underwrite against a policyholder’s decision and ability to seek professional, independent help after a loss.
Thought For The Day
“Whenever you see a successful business, someone once made a courageous decision.”
—Peter F. Drucker
1 William Rabb, “Florida, National Groups File Suit Over ‘Anti-Public Adjuster’ Endorsements,” Insurance Journal, Oct. 14, 2025. (Available online at https://www.insurancejournal.com/news/southeast/2025/10/14/843505.htm#)
2Ria Deonarine and Christopher Upshaw, “Invoking ‘Our Option’ and Preferred Contractor Network Endorsements,” Claims Journal, July 1, 2025. (available online at https://www.claimsjournal.com/news/national/2025/07/01/331414.htm)
3 Texas Insurance Code § 4102.007, “Right to Contract with License Holder,” providing that covered property insurance policies, including endorsements, may not prohibit an insured from contracting with a public insurance adjuster.
4 Fla. Stat. § 626.924, requiring surplus lines policies to state that surplus lines insurers’ policy rates and forms are not approved by any Florida regulatory agency.
