Public Adjusters Should Take the Time to Respectfully Address and Respond to the New Proposed Ethical Rule in Florida This Week

I often see some in the property claims industry spouting off about something and regurgitating news on social media—and they are not in the game. They give no money, do not show up for the fight, and they give no time and work besides reposting work by others and criticizing them on the internet. Doug Quinn of the American Policyholders Association calls this situation like the cooks who report about how the soup is being made without really making the soup and simply trying to profit from the work of others.

If you are one of those people and critics, stop. Get involved and stop using social media to feed your ego or hope that it will grow your pocketbook.

Every public adjuster throughout the country should carefully read the emergency Florida rule,1 even if you are not a licensed public adjuster in Florida. Other insurance departments will certainly be looking at what happens in Florida because it is a new ethical rule and may invite discussion and change about how property insurance claims should be adjusted everywhere.

The deadline to file a response or comment, as noted in Reflections on an Insurance Regulatory Workshop Regarding Ethical Rules of Adjustment, is November 12. Comments can be sent to Greg Thomas at Greg.Thomas@myfloridacfo.com.

My overall comment is that there is a need for this type of rule and that transparency and honesty should be required with respect to the adjustment process. Everybody participating in making an estimate of damage in a claim or having an impact should be disclosed. ESX or other metadata of an estimate should be turned over to either party immediately.

Scope changes need to be addressed more so than pricing changes since scope and method of repair changes result in the largest differences in real property losses. Insurance companies should have deadlines to finish estimates and pay undisputed amounts of loss based on incomplete estimates long before final agreements of loss are arranged.

Speed of adjustment and quick payment are just as important as accurate estimates, which are inherently only a middle range estimate rather than a range of reasonable charges those making repairs or replacement may charge or be required to pay.

I am working on my comments, which I will post on this blog and here are some of the issues I am addressing, researching, and suggesting others may comment upon as well:

Scope Limitation to Real Property Losses: The rule appears to be primarily focused on real property damages, which could lead to ambiguity about its applicability to personal property losses. Public adjusters should seek clarification on whether personal property adjustments fall under the same regulations to ensure comprehensive compliance.
Conflict with Software License Agreements: The rule may conflict with existing license agreements of commonly used estimating software like Xactimate. For instance, if the rule mandates certain reporting or sharing of estimates that violate the software’s terms of use, adjusters could find themselves caught between regulatory compliance and contractual obligations.
Adjuster Independence: There is a concern that the rule might undermine the independence of field adjusters by imposing guidelines that favor insurance companies over policyholders. Public adjusters need to assess how these changes affect their ability to advocate effectively for their clients and whether independent adjusters are being encouraged not to make changes to pricing and scope of repair because the rule seems to be biased to no change when the license and practice is to make many changes as circumstances dictate.
Ethical Implications: New ethical standards introduced by the rule could conflict with current industry practices or the ethical codes established by professional organizations. Adjusters should review these standards carefully to identify any discrepancies and adjust their practices accordingly. What happened to the requirement that pricing and scope reflect reality versus insurance industry made software?
Compliance Challenges: The introduction of new regulations often brings additional compliance requirements. Public adjusters must stay informed about these changes to avoid inadvertent violations that could result in penalties or legal issues. Whether the rule will apply to contents losses is very important. Will public adjusters no longer be able to make proof of loss estimates based on contractor bids and estimates because the new rule requires industry software?
Clarity and Interpretation Issues: If the language of the rule is vague or open to interpretation, it could lead to inconsistent application and enforcement. The insurance industry suggested that the rules should not apply to auto claims. How about personal property claims? What should be the rule for ethical personal property claims, or do they not matter?
Impact on Client Relations: Adjusters must consider how the rule affects their relationship with policyholders. If the rule imposes restrictions that could hinder the adjuster’s ability to serve their clients’ best interests, strategies may need to be developed to mitigate this impact. For instance, does the rule prohibit an insured from doing self-help? Does the rule prevent the policyholder who has hired a licensed contractor and a public adjuster from presenting the contractor’s invoice?
Enforcement and Penalties: Understanding the enforcement mechanisms of the rule is crucial. Public adjusters should be aware of the potential penalties for non-compliance to assess the risks involved and take appropriate measures to adhere to the regulations. From what I read, if you are in non-compliance, you could lose your license. This ethical rule is important to fully understand and must be complied with. Are you okay with the rule as stated?
Training and Education Needs: With new regulations, there may be a need for additional training or education to ensure all team members understand and comply with the rule. Investing in professional development can help prevent compliance issues.
Documentation and Record-Keeping: The rule might introduce new documentation requirements. Public adjusters should review their record-keeping practices to ensure they meet any new standards set forth by the regulation. You will need to have a verified backup for any changes to the software for changes to pricing. While the insurance companies may shy away from making changes to reflect accurate pricing to avoid penalties and pay a greater amount of loss, public adjusters have to have verified reasons to deviate from the software as I read the new rule.

FAPIA and its leadership had their General Counsel at the meeting last week, and I wrongfully failed to indicate that he was there. They also alerted me that the Department planned to allow comments after the meeting.

This new regulation regarding adjustment will certainly be reviewed by other departments for insurance in other states and should be closely looked at by all leaders in the public adjustment community. I guarantee you that the insurance claims industry will have an organized and propagandized response trying to make public adjusters look like demons despite the CBS 60 Minutes episode, which demonstrated that they have a problem with their claims management.

If you are a public adjuster, this is what you should do—read the rule and list your concerns as you read the rule. Read it again. Ask others and your regional or national public adjuster organization what they are planning on doing.

Then, further participate by writing your comments about your personal experiences in a respectful and brief manner on what you support, do not support, and how you would change the proposed rule. You can simply write back if you support your organization’s comment.

One point of this blog is to understand this new proposed rule and then not act like the social media critics who write and draw attention to themselves by complaining—do something personally and with your organization.

Don’t be one of the Chefs on the sideline watching the soup being made and then complaining about how it tastes if you do not like it.

Thought For The Day 

The world will not be destroyed by those who do evil, but by those who watch them without doing anything.
—Albert Einstein

1 Emergency Rule 69BER24-4 for 69B-220.201 Ethical Requirements for All Adjusters and Public Adjuster Apprentices.