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Florida Condo & HOA Legal Blog News & Updates on Condo & HOA Laws & Legislation in the State of Florida

Using a Public Adjuster for Your Insurance Claim?

Posted in Hurricane/Disaster Issues, Insurance, Legislation

OPPAGA Report Finds that Insureds Received Larger Insurance Settlements when Public Adjuster Involved in Claim.  Florida Legislature Considers Additional Regulations Governing Solicitation by Public Adjusters.  The number of public adjusters in Florida increased by more than 300% over the last six (6) years – no doubt as a direct result of the catastrophic damages caused by hurricanes in 2004 and 2005.  As the deadline to file Hurricane Wilma claims becomes closer and closer, more homeowners, association leaders and building managers are being solicited to re-open old claims.  In the aftermath of Hurricane Wilma many distraught association leaders readily ‘signed on the dotted line’ after being told ‘not to worry’ about the association’s insurance claim or repairs to the property. Did the use of a public adjuster make a difference?  The report issued by the Office of Program Policy Analysis & Government Accountability (OPPAGA) finds that claims took longer but payouts were higher when a public adjuster represented the insured.  In fact, Citizens Property Insurance Corporation paid insureds represented by public adjusters at least five time (5x) more than it paid insureds handling claims by themselves. While Section 626.8795, Florida Statutes specifically prohibits the public adjuster from having anything to do with the repair or reconstruction of the damaged property, contractors and public adjusters often seemed interchangeable to association leaders.  The Department of Financial Services recently stepped-up enforcement efforts against contractors - including United Roofing Systems.    Moreover, solicitations became so intrusive that the Florida laws were amended in both 2008 and 2009 to impose restrictions:

  • limiting hours of solicitation (in person or by telephone) from Monday through Saturday between 8:00 a.m. and 8:00 p.m.;
  • prohibiting contact with policyholders until at least 48 hours after an event; and
  • limiting fees to 10% of the claims related to declared emergencies and 20% for all other new claims.

 SB 2264, filed by Senator Bennett seeks to control solicitation by public adjusters even more and according to the Sun-Sentinel, industry groups are all for it, claiming that public adjusters lead to higher premiums.  Among other things the bill seeks to:

  • prohibit solicitation in person or by phone (unless the insured is someone they know or a family member);
  • require written communications to include the word ‘ADVERTISEMENT’ in red ink and be sent via regular mail (not certified or registered);
  • prohibit mailers until 30 days after the insurable event takes place; and importantly
  • cap fees at the 10%/20% limits for re-opened claims.

Contracts between insureds and public adjusters often result in disputes leading to expensive and protracted litigation.  It is therefore extremely important to consult with counsel before entering into any contract with a public adjuster or contractor after a casualty occurs.  For more information on disaster planning and recovery, please go to www.hurricane-recovery.com.