Florida Insurance Consumer Advocate: Public Adjusters – An Alternative to Handling a Claim on Your Own

Jun 1, 2010

The Florida Insurance Consumer Advocate published the following article in the May 28, 2010 issue of Florida Chief Financial Officer Alex Sink’s “Consumer e-Views” newsletter:

In a continuing effort to make sure consumers are prepared for this hurricane season, the Office of the Insurance Consumer Advocate believes it is necessary for consumers to understand what public adjusters do and what services they provide.

Immediately after experiencing a loss, there are certain steps all consumers should take whether they hire a public adjuster or not. Most claims are resolved quickly and repairs can be done expeditiously, but the claims process can be stressful, especially for homeowners or business owners dealing with the emotional experience of a major loss.

When there is a dispute between the policyholder and the insurance company, there are options available to resolve those differences. Consumers should obtain a copy of the insurance company’s estimate and the contractor’s estimate and may attempt to discuss the differences with their insurance company. If the consumer is still not satisfied with the settlement offered by their insurance company and have disputed a claim amount in excess of $500.00, they have the statutory right to request mediation. The mediation process is an informal and non-binding way to resolve claims through a neutral third party. The mediation program is administrated by the Department of Financial Services, Division of Consumer Services and the insurance company pays the entire cost.

For consumers who want assistance with navigating the claims process or with disputes over settlement offers, they may wish to hire a public adjuster. Among other things, public adjusters can help to manage the mediation process, analyze coverage from the policyholder’s perspective, identify, record and quantify all damages associated with a claim’s event, help the policyholder to understand the quality of all settlement offers advanced by the insurance carrier and assist the policyholder in preparation, presentation and the adjustment of the claim.

Public adjusters are licensed by the State of Florida specifically to represent insured policyholders. They do not work for insurance companies or independent adjusting firms. They are different from company adjusters who are employed by the consumer’s insurance company. Public adjusters contract directly with a policyholder to provide adjusting services and negotiate a claim settlement on the policyholder’s behalf with the insurance company.

Consumers need to be aware that a public adjuster is usually entitled under their contract to a percentage of the total claim settlement. A consumer should review a contract with a public adjuster carefully to be sure they understand the terms and conditions of the contract.

Consumers who retain the services of a public adjuster should also be aware of standards Florida law provides when dealing with a public adjuster:

  • A public adjuster is prohibited from initiating contact with a residential claimant or insured within the first 48 hours after a loss has occurred.
  • Solicitation by public adjusters for residential losses is limited to Monday through Saturday, 8 a.m. to 8 p.m.
  • Public adjusters cannot charge fees for claim payments made before the date they enter into a contract with the insured. Fees are capped at 10 percent for claims on damage stemming from an event for which the Governor has declared a state of emergency, and at 20 percent for all other new claims.
  • Before signing a contract, confirm that the public adjuster is properly licensed to do business in the State of Florida. Consumers can contact the Department of Financial Services on-line at http://www.myfloridacfo.com/Data/AAR_ALIS1/index.htm or by phone at 1-877-MY-FL-CFO (1-877-693-5236), toll-free in Florida, and (850) 413-3089 from out of state for this information. Information is also available through the Florida Association of Public Insurance Adjusters (FAPIA) at www.FAPIA.net.
  • An insured or claimant may cancel a contract with a public adjuster within three business days after it is executed, without penalty. For damages that occurred as part of a declared state of emergency, the insured or claimant has a year to file a claim and can cancel the contract within five business days after it is executed, without penalty.

Consumers who have further questions regarding public adjusters should contact the Division of Consumer Services within the Department of Financial Services on-line at http://www.myfloridacfo.com/Consumers/ or by phone at 1-877-MY-FL-CFO (1-877-693-5236), toll-free in Florida, and (850) 413-3089 from out of state.