by Mark Goldwich
There are always many hot topics in the insurance industry. Right now, especially in Florida, a major hot topic is the Unlicensed Practice of Public Adjusting (UPPA, for short). In essence, this is where a contractor or other service provider performs the services of a public adjuster without being licensed to do so. This can include things like interpreting an insurance policy, discussing coverage or negotiating a claim settlement. Contractors do this on a regular basis – and a few of them may not know they are committing a felony. The rest of them know, but don’t appear too concerned. Several of them recently spoke before a committee in Tallahassee, explaining, while on camera, how they're performing a needed and valuable service by “assisting” policyholders with their claims. While the video was sent to the Florida Department of Financial Services for review, the contractors still don’t seem concerned about doing what professionals in my industry have been specifically trained and licensed to do.
What’s the harm? Contractors will say that after handling thousands of losses where insurance claims were presented, they know much more than the average homeowner. And this may be true, but the fact is the vast majority of them are not trained as are licensed Public Adjusters when it comes to dealing with a variety of complex insurance policies, state statutes, and so on. Also, there is often more involved in these insured losses than just building restoration. There can be Loss of Use, Additional Living Expenses, Contents, and other policy provisions not related to the building. As licensed public adjusters, we are familiar with handling all aspects of an insurance claim.
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It would be like me saying, “I have seen so many homes damaged by water, I know better than most homeowners how to extract the water, and use fans and dehumidifiers to dry the home quickly, so you don’t need to hire a water restoration company, I can do that for you.” NO! I'm not licensed to do that! That is why they have a water restoration license, or a contractor’s license, or an electrical license, and I have a public adjuster’s license.
So, why do many contractors insist on handling claims they know they aren't licensed to, especially when they also know public adjusters ARE licensed to do so? In my opinion, it comes down to time, and money. The contractors feel sure they can settle claims quicker, and possibly make more money by handling the claim themselves, rather than having a licensed public adjuster handle the claims. The truth is, they may be able to get the claim settled faster, but they usually have to concede on the amount of money being paid in order to do so. Most contractors also feel they are good enough at what they do that they can get the same amount of money on a claim that a licensed public adjuster can get. Time and again, we have found this not to be the case. Still, many contractors view the fee paid to licensed public adjusters as money drained from their pocket, when in many cases, that money would never have been there if it weren’t for the public adjuster’s expertise.
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Consider this as another consumer alert. Hire only professionals licensed to handle the task at hand. According to the Florida Department of Financial Services (formerly the Department of Insurance):
“The definition of a public adjuster, as explained in Section 626.854, Florida Statutes, is any person, except an attorney, who, for money or any other thing of value (which would include a contract for repairs):
- Prepares, completes or files an insurance claim form for an insured,
- Aids in any manner on behalf of an insured in negotiating for or effecting the settlement of a claim,
- Advertises or solicits for employment as an adjuster of such claims.
If a contractor is acting as a public adjuster in any manner by negotiating or effecting the settlement of an insurance claim on your behalf, without being licensed as a public adjuster (Section 626.854, Florida Statutes), they could be subject to arrest and may be charged with a third-degree felony as provided by Section 626.8738, Florida Statutes.”
If a contractor knows they are committing a felony, even if they are confident they can get away with it by acting as a public adjuster without the proper licensing, you need to consider what else they would be willing to do, whether for money, convenience, time, or anything else. We know a lot of contractors, and we regularly recommend they change the wording of their ads, car signage, websites, etc., as well as what they say to consumers and insurance adjusters. We don’t want to see them get into trouble, and we remind them that in 2013, three roofers from a well-known local roofing company were arrested, booked, and faced up to 5 years in prison because they informed homeowners they were “insurance specialists” and could assist the homeowners in dealing with their insurance companies. While those arrests certainly have not stopped this practice from occurring, we believe insurance companies and the DFS are looking to make examples of contractors engaged in UPPA.
Whether you are a contractor or a consumer, it's better to be safe than sorry by understanding how UPPA can affect your insurance claim.
Mark Goldwich is president of Gold Star Adjusters, a group of public insurance adjusters dedicated to helping citizens get the maximum settlement for any insurance claim.