Public Adjusters–Free Speech & Paragraph (K)

Since Florida’s Supreme Court just ruled that preventing Public Adjusters from contacting claimants within 48 hours of a loss is an unconstitutional restriction on commercial free speech (Case #. ID10-2459), it’s appropriate to remove similar impediments to free speech for non-public adjusters as well.

Specifically, the stricken statute prevented PA’s from contacting any claimant or insured within 48 hours of a loss.  In rejecting the DFS argument that the statute regulated “conduct” of Public Adjusters and not their speech, the court said…

 “The Department‘s claim that the public adjuster-initiated contact and solicitation… [is] – not protected free speech – is unpersuasive…This argument is predicated on the strained reading of the statute advanced by the Department. With the rejection of that strained statutory reading, the argument collapses.”

Comments from the public adjusting community were both predictable and consistent:

  • “A win for the good guy’s and a loss for those interested in underpaying claims.” according to Chip Merlin founder of the Florida Association of Public Insurance Adjusters (FAPIA).
  • “Thanks to this ruling, we can help more policyholders in those critical first hours when they need it most.”  said FAPIA president, Harvey Wolfman.
  •  “As long as the message is not misleading and is concerning a lawful transaction, you’re protected.”  said Wilbur Brewton, the Tallahassee attorney who argued on behalf of Public Adjusters.

There you have it, freedom of speech for public adjusters cannot be restricted by the current statute. (See NOTE #1 below).

However, parts of two rule drafts currently under DFS scrutiny may need to change so that “all” adjusters can have the same protections as the court afforded PA’s. Paragraph (K)  p.8 of rule 220051 is obviously designed to restrict freedom of speech by some adjusters even when the message is not “misleading”. It states:

“(K). An adjuster shall not advise a claimant to refrain from seeking legal advice, nor advise against the retention of counsel or the employment of a public adjuster to protect the claimants interest.”

I’m not an “adjuster” so I can say whatever I want, but…this language prohibits someone with an adjusters license from telling a claimant they should seek counsel from a licensed attorney instead of a PA.  It also appears to prevent advising claimants to “wait and see” before signing a PA’s contract.

And, it appears to prevent an independent adjuster from telling a neighbor with a claim to first analyze the advantages of state sponsored mediation. Read the language again and tell me if you think it would prevent an adjuster from explaining about PA fee’s or from saying that it looks like the claim is being handled appropriately and “you may want to hold off”  until there’s a problem.

Paragraph (K) might also prohibit an agent  who also holds an independent adjuster’s license from recommending to his/her own client to “wait and see if there’s a problem” before signing away 10/20% of the claim payment.

Further, it appears to prevent independent adjusters who aren’t  involved with a claim or employed by the claimants insurer from giving similar advice that is “not misleading…”.

Paragraph (K) discourages brochures that might provide the same advice; brochures that many in the industry feel could be helpful if included in a homeowners policy jacket.

Simply stated…the well intended paragraph (K) goes too far!

That it applies only to “adjusters”  is helpful but, it leaves non-licensed individuals such as myself, rendering appropriate 1st amendment advice  while prohibiting more qualified “licensed” individuals from acting similarly.

In essence, claimants need exactly the kind of advice paragraph (K) makes it harder for them to get and which the supreme court seems to believe they have a constitutional right to receive.

Fortunately, it’s an easy fix–DFS could still prevent unnecessary disparagement of duly licensed individuals and allow claimants to get the “whole” truth with language similar to that in NOTE #2 below.


NOTE #1: In 2007 lawmakers created a Task Force regarding the handling of claims by Citizens in the wake of the 2004-2005 hurricanes. One of the Task Force recommendations was to  specifically regulate the activity of public adjusters. In 2008 lawmakers responded by passing   Fs-626.854 which included the following:  Fs-626.854(6)?A public adjuster may not directly or indirectly through any other person or entity initiate contact or engage in face-to-face or telephonic solicitation or enter into a contract with any insured or claimant under an insurance policy until at least 48 hours after the occurrence of an event that may be the subject of a claim under the insurance policy unless contact is initiated by the insured or claimant.

NOTE #2: The DFS could improve paragraph (K) by adding language similar to the following:“This should not be construed to prohibit anyone from answering questions or providing to the public the relative differences, advantages and drawbacks of various forms of post claim representation, including services that may be offered by the  State such as mediation or arbitration, or those available from the Insurance Consumer Advocate, the Department of Financial Services or the Office of Insurance Regulation. “

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