Florida Supreme Court Strikes Public Adjuster Provision

July 6, 2012

A provision in a 2008 law restricting the ability of public insurance adjusters to contact homeowners immediately after a storm was struck down Thursday by a unanimous Florida Supreme Court.

Prompted by claims that public adjusters were taking advantage of distraught homeowners following the 2004 and 2005 hurricane seasons, the Florida Legislature passed an insurance industry backed effort to limit adjusters’ activities, including contact between public adjusters and customers within the first 48-hours following a hurricane, tornado or other major storm.

Backers said the adjusters were increasing insurance costs by pressuring homeowners into signing contracts. Public adjusters and their supporters say they were just allowing customers to receive the full benefits to which they were entitled.

Upholding a 1st District Court of Appeal ruling, the state’s high court said the law as written barred commercial speech in violation of the First Amendment of the U.S. Constitution. The court rejected arguments put forth by the Department of Financial Services, which contended that adjustors activities were outside the scope of freedom of speech protections.

“The Department’s claim that the public adjuster-initiated contact and solicitation… are conduct – not protected free speech – is unpersuasive,” Chief Justice Charles Canady wrote for the court. “This argument is predicated on the strained reading of the statute advanced by the Department. With the rejection of that strained statutory reading, the argument collapses.”

DFS spokeswoman Alexis Lambert said Chief Financial Officer Jeff Atwater’s office would have no statement on the ruling other than that Atwater respects the court and accepts the decision.

Following the 2004 and 2005 hurricane seasons lawmakers looked at ways to reduce the cost drivers that insurance companies said were leading to skyrocketing premiums. Insurers have cited cases where they’ve had to pay out on some dubious claims – and blamed public adjusters for persuading homeowners to pursue them.

So lawmakers decided to limit contact between customers and public adjusters, who critics argue have a financial incentive to raise claim amounts.

Lawmakers wrote a statute saying: “A public adjuster may not directly or indirectly through any other person or entity initiate contact or engage in face-to-face or telephonic solicitation or enter into a contract with any insured or claimant under an insurance policy until at least 48 hours after the occurrence of an event.”

An insurance industry representative on Thursday said the high court’s ruling was “unfortunate” and may end up costing consumers money as public adjuster fees are taken from the insurance settlement itself.

“CFO Atwater and the Office of Insurance Regulation provide safeguards for hurricane victims that they will be treated fairly by the adjuster dispatched by their insurance company,” said Sam Miller of the Florida Insurance Council. “There is no need for a public adjuster who must be paid by the policyholder.”

Public Attorneys for public adjuster Frederick Kortum, who challenged the law, said the law bans all types of communication during that time period. Regardless of whether lawmakers intended an all-out ban or not, the result doesn’t fall under the circumstances under which the government can limit speech, the plaintiffs argued.

“As long as the message is not misleading and is concerning a lawful transaction, you’re protected,” said Wilbur Brewton, a Tallahassee attorney who argued Kortum’s case before the high court. “It’s kind of like free speech anywhere, you may not like some of it but we have free speech in the United States.”

Other provisions of the 2008 law, including ethical standards and other regulatory powers granted to the department, remain in place. The Florida Association of Public Insurance Adjusters said there is adequate regulation to ensure consumers are protected.

“FAPIA and its nearly 400 member public adjusters are committed to helping policyholders receive full and fair compensation following damage to their property,” said FAPIA President Harvey Wolfman. “Thanks to this ruling, we can help more policyholders in those critical first hours when they need it most.”

By The News Service of Florida

Comments

7 Responses to “Florida Supreme Court Strikes Public Adjuster Provision”

  1. 429SCJ on July 9th, 2012 4:29 am

    Republican or Democrat, Independent, you have to be firm and agressive with those adjusters, make sure to receive your due amount for damages incurred.

  2. David Huie Green on July 9th, 2012 12:48 am

    REGARDING:
    “Just keep sucking up the republican by-lines and remain in your cocoon all warm and snug while you get taken.”

    Okay, I yield to your superior knowledge of what is a public adjuster. I admit I was thinking that a public adjuster was the insurance companiy representative going to a person who has suffered loss and getting him to accept a settlement less than will actually be needed to make him whole.

    I was wrong and ignorant.

    Instead, for maybe a twenty-five percent cut, the public adjuster tries to get as much money out of the insurance company as possible. If I were a Republican, this would surely sound like a good business to be in. With my new understanding, I can see how the companies would hate to have them represent the insured for the very reason you pointed out: the more the insured gets, the more he gets.

    It is interesting how some instantly jump on the thought that anyone who ever disagrees with them must be a Republican, satanist, Liberal or Communist — whatever they despise. I’ve pointed out before that simply insulting those with whom you disagree is counterproductive since it makes it harder for them to listen to you but I doubt it can be helped.

    We are what we are and most are satisfied with that.

    David for truth

  3. Kathy on July 7th, 2012 5:01 pm

    How intelligent, since public adjusters get their money as a percentage of what the home owner gets why would they opt to get them the least. You are brilliant!! Just keep sucking up the republican by-lines and remain in your cocoon all warm and snug while you get taken.

  4. David Huie Green on July 6th, 2012 5:34 pm

    REGARDING:
    “This is a republican Fla house and senate working for the insurance companies instead of you the tax payer.”

    Let’s see now. They thought adjusters were taking advantage of those suffering loss by paying them off quickly but possibly for less than they would need.
    That is a heartless House of Representatives and Senate?

    I know some think the Republicans just sit back and try to think of the most evil things they can do, but does that make sense here?
    It reads like an attempt to protect people even if it winds up costing the insurance companys more.

    David for avoided paranoia

  5. No Excuses on July 6th, 2012 2:41 pm

    I’m with you Kathy! I used a public adujuster after Ivan. If I had settled for just what my insurance company thought I should get, I’d be paying for the repairs today and sitting and sleeping on the floor because the contents of my house would not have been replaced due to insufficient claims payment.

    I see public adjusters as a tax adjuster working for YOU not the insurance company. Of course you are going to get better service like that!

  6. Kathy on July 6th, 2012 7:59 am

    This is a republican Fla house and senate working for the insurance companies instead of you the tax payer. Public adjusters work to get you what you deserve to repair damages. You can get as many estimates as you want and it means nothing to insurance companies. They want you to PAY large PREMIUMS and pay you back nothing in COVERAGE. The republican run Florida said okay you pack my suitcase with dough and I will make sure your suitcase stays full of their dough.

  7. Jane on July 6th, 2012 6:15 am

    I know we all want insurance rates down but I don’t think this was the best way to do it. The best thing to do is to get at least 3 estimates from licensed/bonded repair people before signing anything. It may take time but it also protects you from bogus unncessary repairs or bad jobs repairing damage.

Written by William Reynolds · Filed Under News