Could you imagine the outcry if the government forced you to waive legal rights to obtain needed services? Sawgrass Mutual is essentially doing that with its own customers—and the Office of Insurance Regulation and the new Consumer Advocate are doing nothing about it.

Sawgrass Mutual is sent out the following letter to its members:


Some have suggested that because this is a mutual insurance company, it can ask its members to agree upon something that would otherwise be illegal. The proposed agreement violates Florida regulations which prevent insurers from suggesting, as a consideration for obtaining an insurance policy, that policyholders not obtain legal or public adjusting assistance after a claim.

I have read nothing which differentiates mutual insurance companies from compliance with the insurance code. If an insurer could do this, why not allow other illegal requirements in by-laws of mutual insurance companies?

The reason is obvious–management of insurance companies want to gain additional profits and other competitive advantages; by prohibiting policyholders from valuable assistance in the adjustment of a claim, insurance companies increase the likelihood that a policyholder will accept less than the full value of a claim. While there is no guarantee that public adjusters will find coverages and scopes of damage missed by insurance company adjusters, the statistics obtained by the Florida Office of Insurance Regulation suggest otherwise. My own experience is that insurance companies routinely underestimate damage amounts and fail to pay for or disclose coverages available under the policy.

Sawgrass Mutual’s attempt to limit its members’ rights is very much against the members’ interests. The Florida Office of Insurance Regulation should be doing something about it — or offer an honest explanation why it is not.