Fraud and abuse in property insurance claims by unlicensed operators who are flouting Florida law were already putting us at risk of higher monthly premiums and lower payments for hurricane damage. Now, as Florida assesses the damage from Hurricane Sally, a surge in such activity could only worsen things.
As one of the licensed public insurance adjusters in Florida who help home and business owners recover from storms, I’m calling on you and our state government leaders to help stop this illegal activity. Otherwise, the insurance industry is bound to do what they’ve done before: Ask state lawmakers to solve the wrong problem by making it harder for all policyholders to get professional help to properly settle their claims.
Even before this storm season, you and your neighbors might have encountered what I’m talking about, in a newspaper ad, a direct-mail postcard or even a knock on your door.
A contractor or a “consultant” offers a free inspection to see if your property has any undiscovered storm or water damage that could form the basis of a claim. They most likely find something, tell you they will negotiate directly with your insurance company, and promise you a big check to improve your home – all you must do is pay the deductible. They may even offer you a gift card or reward for allowing them to inspect.
But first, you must sign a form that gives them the right to negotiate with – and sue – your insurance company on your behalf.
There are three problems with all this.
First, it’s a felony in Florida for anyone except an attorney or one of the more than 2,000 licensed public insurance adjusters to offer to represent you in the insurance claims process.
Second, if the damage isn’t real and your carrier sues for insurance fraud, you’re liable. You’re also liable if any unpaid subcontractors file liens against your property.
Third, a few prolific bad actors in Florida have succeeded enough at this gambit – often by pressuring insurers with hundreds of questionable lawsuits – that the industry has begun to call for drastic change.
One such proposal would be to limit the ability of property owners to hire the good guys – licensed public insurance adjusters and ethical attorneys – who help them negotiate appropriate payments for hurricane damage or other claims. That would leave more property owners at the mercy of their insurance companies’ adjusters, whose role is to persuade policyholders to quickly accept the lowest possible payments.
As the 2020 hurricane season reaches its peak, I urge all home and business owners to hire only licensed public insurance adjusters – not roofers, contractors or “restoration consultants” – to represent them. Public insurance adjusters are licensed and trained to carefully inspect your property, document the damage, understand your policy, inform you of your responsibilities during the claim, identify the real costs of repairs and ethically navigate the claims process for you.
You can search for a licensed public insurance adjuster near you on the website for the Florida Association of Public Insurance Adjusters, www.FAPIA.net.
And I urge local and state officials, including the Department of Financial Services, to know and enforce existing law before the illegal activity – and its costs – grows worse.
Specifically, Florida statute makes it a third-degree felony for any person except an attorney or a licensed public adjuster to:
- Accept any form of payment to “prepare, complete or file an insurance claim for an insured or a third-party claimant.”
- Act on behalf of a policyholder in “negotiating for or effecting the settlement of a claim for loss or damage covered by an insurance contract.”
- Advertise to be hired as a public adjuster if they are not, in fact, licensed as one.
Florida once was so serious about stopping such illegal activity that, by statute, it still offers a $25,000 reward for tips that lead to successful prosecution.
Unfortunately, enforcement of these laws has lapsed.
Home and business owners, and the licensed professionals they hire, should not have to absorb the cost of the fraud that continues to occur.
Timothy Cornett is president of the Florida Association of Public Insurance Adjusters and president of TLC Public Adjusters, Inc. in Spring Hill, Florida.
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