Before publishing comments on any blog, especially mine, it’s usually a good idea to check previous postings to make sure that what you say hasn’t already been refuted. Public Adjuster Martyn Belben didn’t do this when he took umbrage with my post on public adjuster promotions, called; “PA Advertorials”.
Belben was countering my comments using distortions of an Office of Program Policy Analysis & Government Accountability (OPPAGA) study. Thankfully, and for reasons I can’t explain, he provided his full street address, website and license number. His website repeats the distortions via a creative pop-up video and in a separate introduction referencing the “Government Study” and stating…
“…policyholders who hire public insurance adjusters, on average, are paid over seven times the amount the insurance company wanted to pay to settle a claim.”
Coincidentally and apparently unbeknownst to Belben, applying the “seven times” figure to the whole market, saying it’s an average, and it’s more than the company wanted to pay, is not only incorrect, but I had already demonstrated that fact in my very first blog; “Public Adjusters & 747%–Bogus”.
To those who responded to that first blog by questioning whether any PA was actually misrepresenting OPPAGA’s report, you can now check out Belben’s website and his response to my blog to see the perfect example of what I was talking about. Here’s an excerpt…
Scott ignored the findings of the Office of Program Policy Analysis & Government Accountability, an independent office of the Florida Legislature, which reported that policyholders who hire a public adjuster receive settlements between 500% and 750% more than the insurance company wanted to pay to settle a claim. And Scott has the audacity to describe settlements without the assistance of a public adjuster, as “fair”!
Whether Belben’s advertising rises to the level of “false or misleading” as prohibited by the Unfair Trade Practices statute, Fs 626.9541, is for someone more qualified than I to determine. But, either way, he should correct his website before someone who is qualified, an attorney with DFS for example, checks in to it.
Now, here are some excerpts from my previous blog on the OPPAGA study showing why his statements are misleading.
One data point attracting both attention and exploitation (by ”some” PA’s) misleads consumers to conclude a public adjuster averages 747% more payout on claims–a mistruth advertised by at least one PA as being…”according to a government study“.
What was made clear by OPPAGA but not so much in what “some” PA’s have circulated, is that the 747% was only for “Citizens”, and only for its 2005 storms. Implying it was a statewide figure is statistically and factually bogus.
Failing to recognize how such an inflated figure could be misused, however, is a failure by OPPAGA. Though it was directed to examine only Citizens claims, it could have highlighted that Citizens only insures around 17% of Florida’s homeowners and that the more statistically relevant 83% of the private market was not part of its report.
But…there’s more. Look at the graph from which the 747% figure was extracted–Exhibit #6 titled: “Public Adjuster Representation Typically Resulted in Larger Payments to Policyholders.”
Now figure this; OPPAGA didn’t mention what was happening with Citizens catastrophe claims system after the 04/05 storms. Remember? It had thousands and thousands of complaints about delays and processing errors. There were even significant issues of fraud; a full scale investigatory panel appointed by CFO Gallagher (upon which I served) was charged to look into the whole mess and make recommendations. Perhaps you recall the very high profile “Kickback” scandal involving the Big Hog motorcycle with Citizens head of claims and an independent adjusting firm? There was evidence that Citizens telephone hold times were 45 minutes or longer and that it was sometimes unable to answer it’s phone at all.
But, not so much for the 83%. For the most part, private carriers closed claims and satisfied policyholders; albeit, some better than others.
There’s more that discredits the 747%. During the time frame OPPAGA used there was no statutory restriction on PA fee’s. Many were charging 40% of the claim payout; a few were found to have charged even more. This means inflated settlements in order to provide the claimant a “net” to cover his/her repairs. Today, PA fees are 75% lower for a catastrophe; limited to 10%.
Then this. If OPPAGA had printed the average of both storm years (per Chart #6) it would’ve been more accurate than highlighting “only” the year with an obviously inflated result. For example, looking only at 2004 (instead of only 2005) reduces the 747% figure to one a disingenuous PA couldn’t exploit…11%, after allowing for the typical 2005 contingency fee.
To summarize; PA’s don’t mention that use of a Public Adjuster may cause a delay of three months in claim payments…according to a government study. They don’t mention that after their fee is deducted claimants may have only netted an additional 11% in exchange for a delay of 90 days, again…
….according to a government study.