The California Supreme Court issued a unanimous ruling yesterday requiring insurers to communicate “complete” replacement cost estimates to insureds.1 The ruling not only found the regulation requiring this action to be well within the Insurance commissioner’s authority, but found the basis for the regulation to be well founded. It is a wonderful victory for policyholders in California.
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Rarely do insurance commissioner bulletins warn insurance companies of paying too much or that consumers are not entitled to insurance benefits. Most departments of insurance only write bulletins because insurance company adjusters pay far too less to similarly situated consumers suffering from the same loss.  Of course, insurance company lobbyists now go into overdrive to argue against the bulletin and to influence those in power to change the bulletin to favor payment of less money. Insurance companies essentially use policyholder premiums to pay the expense of their lobbyists to reduce payments to those paying for the insurance benefits.  How ironic.
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Unauthorized Practice of Public Adjusting (UPPA) has become the predominant discussion among public adjusters at virtually every public adjuster association meeting I attend. Brian Goodman, general counsel for the National Association of Public Insurance Adjusters (NAPIA), said that UPPA is now the most important issue facing public adjusters because licensing of the profession is accepted in almost every state and even recognized in Model Legislation with the National Association of Insurance Commissioners.


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Should any debtor hold on to money that is agreed owed? It seems like an absurd question, but in the insurance claims world, many insurance companies know that it is very profitable to "play the float." Even the most famous insurer admits that "playing the float" is very profitable, as I noted in Playing the Float and the Wisdom of Warren Buffett.


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Yesterday, I was having a discussion with a public adjuster about a claim where the insurance company was depreciating the cost of labor in addition to the damaged property when calculating actual cash value (ACV). In California – and using the parlance of my 11-month year old son – that is a "no no." Under California Code of Regulations section 2695.9(f)(1), "the expense of labor necessary to repair, rebuild or replace covered property is not a component of physical depreciation and shall not be subject to depreciation or betterment."

It is important to note that in some states, Texas being one, insurers are allowed to depreciate labor in calculating ACV.1


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I am writing this blog in terminal C at Salt Lake City International Airport after spending two days in conference with my Merlin Law Group colleagues and one of the foremost insurance experts in the nation. This eye opening seminar confirmed that many in the insurance industry are not good neighbors, they are not there to help, and now exist solely for profit. Hurricane Sandy has given New Jersey an education in property insurance claims handling. Many are learning what those in Florida, Texas, and other storm prone states have known for decades.


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This spring, a hot topic for Florida public adjusters has been proposed changes to sections of the administrative code that govern public adjusters. Listen to the complete 25-minute audio recording from the recent DFS hearing here. Two of the proposed changes have the Florida Association of Public Adjusters taking action and explaining ramifications that may have been unknown to drafters of the code.


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