Gene Veno forwarded two videos made by roofing contractors and asked us to comment on them. The roofing contractors are advertising their services for insurance claims. Here they are:

In Contractors Cannot Legally Negotiate Insurance Claims, I noted the following:

People who act as contractors for policyholders can negotiate insurance claims only if they are licensed attorneys or licensed public insurance adjusters. If properly licensed, they can negotiate only if they are retained by the policyholders. In jurisdictions that allow a contractor to work on and act as a public insurance adjuster on a single claim, I imagine some contractors are retained as both. A conflict of interest seems inherent in the dual roles, and virtually every Bar Association in America would prohibit an attorney from representing a client as a contractor and legal counsel at the same time.

As I noted in Failure to Communicate with the Insured’s Contractor is Bad Faith, this does not mean that once a policyholder has retained a contractor or roofing contractor insurance adjusters should not seek out and consider their opinions. However, it is illegal for an insurance adjuster and roofing contractor to negotiate or adjust a policyholder’s claim together.

The ad by All Star Roofing seems to indicate that after an insurance claim denial, policyholders should retain All Star Roofing to guide them through the claims process with the insurance company. The ad further indicates something about a "free roof program." My impression is that the first ad encourages policyholders to engage a non-lawyer for legal advice and help with an insurance claim or to engage a contractor to act as a public adjuster. This is the exact activity which the Arizona Department of Insurance warned against in the Contractors Cannot Legally Negotiate Insurance Claims post.

I have noticed a trend at insurance fraud seminars where insurance restoration contractors and roofers are discussed. The insurance restoration industry has exploded over the last dozen years. There are many legitimate players in that industry and some unprincipled players who will do anything to make money. For example, Comments on Unauthorized Public Adjusting noted how some construction contracts are deemed illegal public adjusting contracts by the California Department of Insurance. Problems arise in the insurance restoration industry because it is not licensed by the departments of insurance, and in many venues, there is no government oversight which protects the public at a time of crisis.

I think one of the best observations about this situation was made in Greenspan Public Adjuster Interviewed About Unauthorized Public Adjusting, where lawyer turned public adjuster Masood Kahn said:

We do not let our lawyers, doctors, real estate and insurance agents, etc. engage in their professions without being licensed. Even our mechanics and our hairstylists are regulated and held to a certain minimum standard. Accordingly, individuals negotiating and compromising the rights of policyholders, particularly after they have suffered a loss, must be regulated, licensed and held to a higher standard.

Unfortunately, there are an abundance of construction firms, water and smoke remediation firms, and accounting companies that are engaging in unauthorized public adjusting, and breaking the law regularly, mostly with impunity.

Unless a CPA is an employee of the insured, it’s illegal for them to represent a policyholder for compensation in the settlement of an insurance claim without a license. A CPA would be an improper person to measure inventory losses. Additionally, simply having a CPA designation will ensure he/she has the skills necessary to measure and adjust the business interruption aspect of the claim. An insured would need the skills of a forensic insurance accountant who has intimate knowledge of the particular business, and one who is skilled in representing policyholders.

Given the expected strength of Hurricane Irene, I am pretty certain that Gene Veno will make certain the South and North Carolina Departments of Insurance are aware of these important consumer protection issues.