PA FEE’S…Florida Consumers pay too much!

I’m sure you picked up on it. The proposed 15% cap on public adjuster (PA) fee’s in HB-743 is precisely midpoint between the existing 20% for non-catastrophic claims and 10% for catastrophe claims. (See NOTE #1 below)

The archetypal compromise. Between some PA’s and some insurer’s avoiding a fight by agreeing to reduce a cap they both know is too high–the highest in the entire United States.

It’s an election year. Lawmakers are eager to avoid any bloodletting.  Even if it means consumers  pay 50% more than they should.

There’s this. No one’s given me a credible explanation for two different fee percentages, 10% and 20%–the catastrophic being lowest. Shouldn’t it be the opposite?  PA’s work harder in a post-catastrophe environment.  Their services are needed more.  They face greater hardships. Why isn’t it higher?  Any post-catastrophe consumer vulnerability is handled by the fact that there’s a cap at all.

I’m just saying!

Forget the 15% compromise and the reasons behind it.  Think instead: If a cap is the right thing to do then choosing one that’s the minimum necessary to fairly compensate adjusters is the right way to do it.

By definition a 15% cap isn’t fair to “consumers”.   It’s a “compromise” for goodness sakes! A rest stop halfway between consumer needs and placation of special interests.

Nope. Florida’s public adjuster fees should be capped at 10% across the board.

The largest and oldest public adjuster group in America, NAPIA, has accepted 10% in other states.

And, while words don’t exist to describe the hypocrisy of Florida’s so called advocates refusing even to support the compromise, Sean Shaw’s employer, Chip Merlin, gives some insight as to why they should.

As a founder of FAPIA, (the only group opposing any reduction), Merlin’s post  in June of last year sheds much light on why a 10% across the board cap is fair.

  • Merlin: “Two very reputable and experienced public adjusters…Chris Aldrich and Mike Miller both said ten percent and that the figure could be negotiable depending on the size of the claim.”
  • Merlin: “Larry Bathgate indicated that most of his clients signed up with public adjusters between 5-10% of a loss recovery.”
  • Commenting on Merlin’s post, Shirley Heflin, referred to 10% as “customary” in the phrase… “aside from the customary 10% fee”.
  • According to as written by Gina Roberts-Grey and re-posted by Merlin Law Group “The fee normally ranges from 10 percent to 15 percent of your claim payout.”

Other consumer groups reveal a worst case scenario that’s still less than the 15% compromise.

  • Publications of United Policyholders urge consumers to avoid being “…rushed into making a decision” and state that “most public adjusters work on contingency fee’s…from 5% to 15% of the monies the insurer pays on your claim.”
  • says  “Public adjusters and clients are free to negotiate contingency fees less than the standard 10% to 12.5% contingent fee arrangements on very large claims.”
  • On a website for Real Estate Investors and Property Managers called “Ins And Outs” George Skidis a “licensed and bonded” public adjuster says “Many Public Adjusters charge 10% of the total loss as their fee…”
  • In June of last year, Oklahoma Insurance Commissioner John D. Doak  issued a bulletin advising all PA’s in Oklahoma to not charge customers more than 10 percent of the total claim settlement.

Ten percent (10%). It’s the “norm”. It’s the common point.  It’s the most charged percentage in America and the most used percentage by Florida public adjusters, even with the current 20% cap.

If Florida had a 10% across the board public adjuster fee cap, maybe the only change would be that those who charge more begin charging what “almost” everybody else is already charging, or less.

In the absence of a 10% cap lawmakers would help us all if they would explain why their constituents don’t deserve to pay as little as consumers elsewhere.


NOTE #1:  Provisions in SB-7062 increasing the cap on annual Citizens rate increases for commercial non-residential policies from 10 percent to 15 percent and the reduction in the current statutory cap on public adjuster fees from 20 to 15 percent were removed during last Wednesday’s Banking & Insurance Committee hearing. Too bad.

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