October 21, 2024, Insurance Journal – Guest Commentary by Lisa Miller, CEO of Tallahassee-based Lisa Miller & Associates, a Florida business development, government consulting, lobbying and public relations firm. (Original story location: https://www.insurancejournal.com/news/southeast/2024/10/21/797837.htm)
The issuance of Florida’s Emergency Rule 69BER24-4, in response to hurricanes like Milton, represents a significant shift in regulating public adjusters and their activities. While some plaintiff attorneys and some adjusters initially celebrated the rule as a victory, a deeper reading reveals that it introduces rigorous ethical and procedural requirements for public adjusters, bringing much-needed transparency and accountability to the property claims process. This essay examines the key elements of the rule and its potential impact on reining in problematic behaviors among public adjusters.
Key Ethical Requirements for Public Adjusters
Under the new rule, all types of insurance adjusters, including public adjusters, must adhere to the same ethical standards, as outlined in Chapter 626 of the Florida Statutes. Importantly, these standards apply regardless of whether the adjuster holds a permanent, temporary, apprentice, or emergency license. This is a crucial point, as it reinforces that public adjusters cannot operate outside the bounds of professionalism and transparency required of other insurance adjusters.
Enhanced Transparency Measures
One of the most significant changes under this rule is the requirement for public adjusters to use electronic estimating programs when preparing property loss estimates. These programs provide a line-item breakdown of the estimate, which must be shared with the insured within the legally prescribed timeframe. This move toward digital estimation ensures that there is a verifiable and consistent record of the damages and their associated costs.
Moreover, adjusters are now prohibited from modifying the price list generated by the estimating program unless they can provide detailed documentation to justify the changes. Any adjustments must be clearly disclosed, along with a comprehensive explanation of why the changes were made and which adjuster is responsible. This level of scrutiny prevents unethical practices, such as inflating repair costs or submitting altered estimates at the request of plaintiff attorneys.
Record-Keeping and Accountability
The rule mandates that all adjusters retain all versions of the loss estimate, ensuring that there is a trail of evidence if discrepancies arise. This provision holds public adjusters accountable for their work, making it more difficult to manipulate estimates for personal or legal gain. Adjusters who fail to keep accurate records may find themselves subject to disciplinary actions or legal consequences.
Impact on the Public Adjuster Industry
These new regulations introduce a level of transparency that many public adjusters may find difficult to comply with. Public adjusters who have relied on less-than-transparent practices, such as keeping their names off estimates or altering pricing at the request of legal counsel, will no longer be able to operate under the radar. The rule shines a spotlight on these unethical behaviors, ensuring that public adjusters act in the best interest of the insured and not third parties.
As public adjusters adjust to these stringent requirements, the overall claims process in Florida is expected to improve, particularly in the aftermath of natural disasters like Hurricane Milton. Policyholders will benefit from more accurate and transparent estimates, while insurers will face fewer inflated claims or disputes over loss calculations that can lead to delays in paying claims as well as costly litigation.
Conclusion
Florida’s Emergency Rule 69BER24-4 marks a pivotal moment in the regulation of public adjusters. By imposing strict ethical standards, requiring the use of electronic estimating programs, and mandating comprehensive record-keeping, the rule aims to rein in unethical practices within the industry. Public adjusters must now operate with greater transparency and accountability, which will ultimately benefit both policyholders and insurers. As the industry adjusts to these new expectations, the spotlight will shine brighter on those who fail to uphold the standards of professionalism and integrity.
Lisa Miller is CEO of Tallahassee-based Lisa Miller & Associates, a Florida business development, government consulting, lobbying and public relations firm. She is a former Florida deputy insurance commissioner who serves as a disaster insurance and recovery expert, consulting with insurance companies that write more than 2.5 million homeowners insurance policies.
© 2024 by Wells Media Group, Inc.
