In 2008, Chip Merlin posted about insurance fraud involving public insurance adjusters. In the post, A Few Bad Apples, Chip candidly wrote about how public insurance adjusters are hated by most insurance companies because of a perception that public adjusters engage in wrongful behavior. Public adjusters have a difficult job. Their goal is to often convince insurance companies that that a policyholder has been shorted and more money needs to be paid. Since most public adjusters work on a contingency fee percentage, it is not uncommon for their words and work product to be heavily scrutinized. Even when a public adjuster is correct about a claim, it is not uncommon for carriers to continue to hold firm in their positions. This is a frustrating scenario but the ethics and duties public adjusters have to their clients should never be compromised.

Ethics and professionalism are frequent topics presented at public adjusting association meetings and public adjusters nationwide should join these associations. Many states, like Florida, California, and Texas, have their own associations. NAPIA welcomes members from states across the country and "for more than 60 years, NAPIA members throughout the United States have joined together for the purpose of professional education, certification, legal & legislative representation, scholarship & research, marketing opportunities, and promotion of the public adjusting profession."

Policyholders need public insurance adjuster representatives to help them navigate the claims process and because of the highly technical issues that are often involved in these claims, public adjusters must be educated, ethical, and not allow for improper claim presentation.

Instead of handling certain claims in an ethical and proper fashion, a New Jersey adjuster has recently pled guilty to third-degree insurance fraud in connection with insurance proceeds collected for clients.

According to the Insurance Journal,

[B]etween July 31, 2005 and August 13, 2010, [the adjuster] submitted property damage claims to four insurance companies claiming that damage was sustained and repairs were completed at properties located in Paterson, Newark, Irvington, and East Orange when, in fact, the repairs were not completed.

This type of representation hurts the reputation of a group that that is constantly fighting to promote the good works of their services. The advice Chip Merlin gave readers in 2008 still rings true.

When a public adjuster is involved, it reinforces the perception by those acting on behalf of the insurance industry that ‘public adjusters just cannot be trusted.’ The old adage, "a few bad apples can destroy an entire basket," comes to mind when I hear or read stories like the one cited above. Public adjusters must beware that if this perception persists, they could be in danger of having licensing statutes disappear or severely limited in the states that allow public adjusting.

Public adjusters should take this advice to heart and join together with other public adjusters in associations.