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Florida Change of Laws for Adjusters

Last Post 29 Dec 2006 03:48 PM by Tiger. 5 Replies.

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Tom Toll
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Veteran Member

Posts:1049

27 Dec 2006 10:08 PM
This is the website regarding new Florida laws, regulating public adjusters. Read it and tell us what you think. [u]http://www.mondaq.com/friend.asp?lo=%01vmf%08%7D&ef=28944[/u]

Success is not final, failure is not fatal: it is the courage to continue that counts.

brighton

Member

Posts:53

27 Dec 2006 10:34 PM
Finally. Florida is catching up to Texas in the conflict of interest where PA's were also contractors (remember all those foundation claims where you had pa/contractor?). Texas went further if memory serves me where a PA cannot office with a contractor as well. What this did was take the 20% oh&p out of the equation. I remember seeing in the pa contracts that if the insured used xyz constuction, the pa fee would be waived. I've talked with one pa firm in FL that was both and they split the business. There is still the construction firm seperate from the pa firm. It will be interesting to see if the state investigates former pa/contractor firms to see if they actually collected the fees for the pa firm or if the insured got the pa fees reimbursed by the contracting firm if they used the "perferred" contractor of the pa.

wscook

Member

Posts:22

28 Dec 2006 03:47 PM
As a Florida licensed PA I find good and bad in the new rules. I agree that a contractor acting as a PA will likely blur the line as to his fiduciary responsibilities. I agree that a PA sharing resources with a contractor can also cause similar concerns. The ease that a contractor can have a family member or any employee get an adjustrers license and become an advocate for an insured, while really serving the best interest of the contractor has become a major problem for the PA industry. PAs should be required to serve as an apprentence for two years to become competent in insurance matters. I strongly disagree with the 10 percent feecap as this removes the incentive for a PA to become involved in a small loss and may force the insured to retain an attorney that will have attorney fees paid by insurers should the prevail by one dollar or more. If insurers have paid all that they have determined is owed and file is closed, I can evaluate if there is a margin of profit for a reopen in a noncatastrophe event. Another punitive issue that the lowballed or erroneoulsy processed catastrophe claimant must endure is that the 10 percent fee cap is in perpetuity for a cat claim. Once again driving the claimant to use an attorney. William S Cook Public Adjuster

katadj6
Life Member
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Member

Posts:23

28 Dec 2006 06:57 PM
It is fully understandable that the FL insurance commissioner has imposed a cap on the PA's fee of 10%. This to protect the interest of the insured in FL. As opposed to several other states that allow as much as 33 1/2 % or more. But, why does it only target the FL pa's when the attorneys charge anywhere from 1/3 to 1/2 of the recovery? The PA can conceal themselves under the cloaks of the attorneys any time they wish, and this will be the eventual outcome of the new ruling. The PA advises the insured to hire the attorney, who gets their 1/3 to 1/2 of the payment, whilst retaining a % of same and making arrangements with the PA for a finders fee and or preparation of the file for a % of the fee, well in excess of the 10% allowed under the law. This is happening every day in Dade and BrowardCounty. The PA's hide behind the attorney, do their assigned tasks and have the attorney represent the client and then they split the fees. While the DFS has attempted to protect the PH in FL they have not done all necessary to protect them. The directive should be all encompassing, protecting the PH, allowing a reasonable profit for the PA and/or the attorney. Seems rather incredulous how all of the rules and regulations that are imposed have never addressed the so called standard of the industry, in which the carriers have to pay an overhead and profit to the contractor in the amount of 10 on 10 which is 21% or a straight 10&10 which is 20%. Not that this is correct by any means , as the normal operating costs for any business in the construction industry is predicated on an overhead of 19-23%. Rather one sided. Seems the carriers are protected by an UNWRITTEN agreement of paying only OH&P on 3 trades or more and that has been fixed for more than 20 years. Perhaps we all should go back to the old ways of time and material contracts plus costs and then pay out the true value of the claim. Only time and nature will determine the outcome of the new rule, and there will be many tests imposed.

brighton

Member

Posts:53

29 Dec 2006 03:01 AM
wscook I disagree that limiting the maximum commission to 10% would limit pa's from taking a file. Your comment that mandating that the 10% for the life of the claim will force an insured to the services of an attorney. Are you implying that pa's are only in it for the big money and not to help insureds receiving additional funds if, in fact there were errors on the original estimate? Word of mouth from satisfied clients equal referrals. If a firm is willing to assist on reopens or small claims, big ones follow. During the 2005 storms, many claims had pa's where the claim was under $5,000.00. Based on the number of claims and the number of pa's in south Florida as a result of the storms, pa firms were making money off of volume alone. Even some of the law firms that were acting as pa's were charging 10% and I did not hear them complain. In Texas, under section 4102.104 of the insurance code, a pa can charge hourly, flat rate or comission. The commission cannot exceed 10% of the amount of the insurance settlement of the claim. This is for any claim not just storm claims. Since about 1981 - 82 it has been the norm for pa firms to charge 10% (or less) in Texas prior to the state instituting the 10% cap. Granted the Texas pa's normally do not drive BMW's, Range Rovers or Mercedes like they do in south Florida. They don't get rich, but they do make a very decent living.

Tiger

Member

Posts:26

29 Dec 2006 03:48 PM
"Granted the Texas pa's normally do not drive BMW's, Range Rovers or Mercedes like they do in south Florida. They don't get rich, but they do make a very decent living." Looks like you and I have dealt with some of the same PA's brighton.

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