• Skip to primary navigation
  • Skip to main content
  • Skip to primary sidebar

Johnson Strategies

Planning, Communications, Advocacy

  • Home
  • The JS Story
  • About JS
    • Mission
    • About Scott
    • Writing
  • Videos
  • Library
    • AOB prior to reforms effective July 1, 2019
    • AOB on and after reforms effective July 1, 2019
    • Citizens
    • Legislative Glossary
    • Government Studies and Reports
    • Miscellaneous Documents
    • Presentations and Powerpoints
  • Links
    • Government
    • Other Helpful Sites
  • Contact
You are here: Home / Public Adjusters / Public Adjusters…fee caps & red herrings!

Public Adjusters…fee caps & red herrings!

April 23, 2014 - Opinions by Scott Johnson Leave a Comment

Red herring, definition: noun; from the practice of drawing a red herring across a trail to confuse hunting dogs;  something that distracts attention from the real issue; something unimportant that is used to stop people from noticing or thinking about something important.

My readers know I favor one across the board percentage fee cap for public adjusters (PA’s) of 10%.  In Florida, with America’s highest cap, this means cutting in half the 20% non-catastrophic limit.  Reasons and benefits have been detailed in numerous postings on this blog site. (See NOTE #1).

While it won’t happen this year, many like minded PA’s also favor Florida’s legislative proposal to nudge the fee cap down to 15%.

In anticipation of next year, however, maybe now’s the time to debunk the only ostensibly rational argument justifying opposition to any reduction.

It’s called the “small claim” argument and it’s a red herring!

For what it’s worth, the PA community  is sharply divided on fee reductions. The  loudest and most proximate advocacy group, the Florida Association of Public Insurance Adjusters (FAPIA), seems alone in opposition to Florida’s recent proposed reduction. I suspect AAPIA agrees.  (See NOTE #2 below). 

While there are nuances to why members of other groups (NAPIA or CPCPI for example) actually favor caps on their own revenues, it undeniably flows from the belief that higher percentages stimulate bad behavior hurtful to consumers and thus to the PA community.  In fact, much of their legislative testimony supports the direct causal relationship between a “higher” fee cap and consumer mistreatment.

The red herring: When the percentage is “too small” smaller claims don’t yield enough dollars to compensate a public adjuster thus denying claimants access to services they want or need.

Putting aside whether policyholders need the services of a public adjuster at all, this argument has been the clarion call against fee reductions or caps generally, by AAPIA in other states and by FAPIA in Florida, ever since fee caps first emerged as a way to fight consumer abuse.

The argument is accepted on its face.  Percentages are  bandied about without even disputing its legitimacy. The “small claims” argument is even partially why we have two different caps in Florida instead of 10% across the board.

I realized it to be a red herring when responding to an email from Gene Veeno, the head of AAPIA who,  in attempting to prove the “small claims” argument, asked my assistance in helping a Washington DC policyholder with a “small” claim to find a public adjuster.  Veeno said the claimants dilemma was “…a prime example of why fee caps don’t work for homeowners…”

Here’s the claimants email:

Dear Mr. Veeno:

Would you be kind enough to recommend a public adjuster in the DC area? My home sustained water damage in the basement from a leak and I need to improve the insurance company’s estimate. I don’t think the damage will exceed 15K, so the job may be too small for many adjusters.

Thank you very much,

Chris

Veeno, a friend and talented spokesperson for AAPIA and public adjusters generally, said: “Scott, this may shed some light on your recent blogs on fee caps… if you have a PA who can assist this homeowner’s request regardless of membership in any national association I ask kindly you send PA name and email/phone number to me ASAP and I will see homeowner receives their information…”

I responded as follows:

Thanks Gene:

The insurer has admitted the claim is valid by making an offer–the only dispute is over the amount. The claimant wants more & maybe he deserves it, maybe not.  

Don’t know about DC, but…in Florida he would only need  to make one toll-free call to the number the insurer provided in the claim response to find “free” state sponsored mediation that almost always results in a higher payout; without legal fees and without paying a public adjuster 20% of his claim amount.  I’ve used this service myself and it worked quite well to almost double my original offer.

By the way, in Florida, every claimant is required to receive a state approved explanation of this process along with the toll-free number.  We also have an insurance commissioner and an Insurance Consumer Advocate who will help.  Again, without taking anything out of the claimants payout.

It is frustrating for the state of Florida to provide these services for free, while claimants continue paying 20% of their payout to public adjusters for services they sometimes don’t need.

Would AAPIA support the state mediation approach in DC?

Scott

When and if I receive an answer to this last question I’ll be sure to let my readers know.

In the meantime I think it’s safe to say that, with state sponsored free mediation for claim disputes and with most adjusters already charging somewhere in the neighborhood of 10% anyway, there is nothing but gain for consumers with a 10% across the board fee cap.

Any argument to the contrary is just a red herring.

##end##

NOTE #1: Recent posts on reducing the fee cap are:  Policyholders Rights & a 10% Fee cap! and PA Fee’s…Florida Consumers pay too much!

NOTE #2: I say this because the National Association of Public Insurance Adjusters (NAPIA) has embraced caps of 10% in other states and favored the reduction to 15% in Florida.  An organization of past presidents of FAPIA, called The Council of Property Claim Professionals Inc. (CPCPI),  favored the reduction to 15% as well.  And, despite Florida’s 20% cap (the highest in the US) most Florida public adjusters charge 10% as a matter of good business practice. For information on where people stand see Public Adjuster Fee’s…consumer advocates fail consumers! For information on what PA’s usually charge regardless of fee caps, see; PA Fee’s…Florida Consumers pay too much!

NOTE # 3: In its letter to me FAPIA stated that limiting fee’s further can prevent PA’s from handling smaller claims (See letter dated 2/13/14). The American Association of Public Insurance Adjuster (AAPIA) seems to agree based on position papers to lawmakers in New Jersey, articles on its website and the above referenced email from Gene Veeno.

IMPORTANT: If you enjoyed this post you’re invited to subscribe for automatic notifications by going to: www.johnsonstrategiesllc.com.  Enter your email address where indicated.  If you’re already on the website at Johnson Strategies, LLC, go to the home page and enter your email address on the right hand side.  Remember, you’ll receive an email confirming your acceptance, so…check and clear your spam filter for notifications from Johnson Strategies, LLC.  ENJOY!

facebookShare on Facebook
TwitterPost on X
FollowFollow us
PinterestSave

Filed Under: Public Adjusters

Reader Interactions

Leave a Reply Cancel reply

You must be logged in to post a comment.

Primary Sidebar

Unless otherwise attributed, articles on this site are the opinions of Scott Johnson.

To subscribe to Scott’s blog…

JS Contributors

Don Brown
Particularly on insurance issues, Don Brown brings expert legislative acumen to the JS team. First elected in 2000 he emerged as an architect on numerous insurance related reforms, predominantly Property Insurance. He’s been an independent insurance agent for over 25 years and is currently a sought-after speaker, consultant and author. Learn more
David Thompson, AAI, CPCU, CRIS
David Thompson has a well-deserved reputation across the country as a preeminent expert in the Property & Casualty field. Learn more
Bill Wilson, CPCU, ARM, AIM, AAM
Bill is one of the most respected speakers and writers on P & C issues in the U.S. He is recognized by his peers as someone who can explain complicated technical subjects in an easily understood and interesting fashion. His list of accomplishments and awards is legendary. For good reason his books, articles and consulting services are in continuous demand. Learn more
Barry Zalma, ESQ. CFE
Johnson Strategies has relied upon Mr. Zalma on numerous occasions for his research and insight into matters of insurance fraud, bad faith, relevant case law and expert analysis. Learn more

Order Scott’s Books

Collapse of an Evil Empire

Fraud and greed pushed home insurers to the brink. Something bold had to be done. This is the story of the disbarment of Florida’s most prolific litigator leading to the most comprehensive tort reforms in Florida, and perhaps American, history.

What's Past is Prologue

Lessons from the Worst Insurance Crisis in Florida’s History... ASSIGNMENT OF BENEFITS

Fact & Fallacy

Essays & Opinions on Florida's Most Controversial Insurance Topics.

Platforms of Success

What the New Generation of Elite Sellers are Doing and How it Can Work for You!

From Cartels to Competition

The Evolution of Insurance and the History of Florida’s Independent Agent

Recent blog posts

  • AGENTS, ADJUSTERS, INSURERS BEWARE—THE RED FLAGS OF FRAUD!
  • The Delicate Balance: Addressing MGA Concerns Without Creating Market Uncertainty
  • Are Florida’s MGA’s Under Attack?!
  • A Smarter Approach to Hurricane-Resilient Homes and Insurance Stability…
  • How Do Other Jurisdictions Manage Hurricane Risk Exposure?

Blog Archive

  • April 2025 (1)
  • March 2025 (2)
  • February 2025 (2)
  • January 2025 (2)
  • October 2024 (3)
  • September 2024 (2)
  • August 2024 (2)
  • May 2024 (1)
  • January 2024 (1)
  • October 2023 (4)
  • September 2023 (2)
  • April 2023 (1)
  • March 2023 (2)
  • February 2023 (3)
  • January 2023 (1)
  • December 2022 (2)
  • November 2022 (1)
  • August 2022 (2)
  • July 2022 (1)
  • June 2022 (1)
  • May 2022 (2)
  • March 2022 (4)
  • February 2022 (3)
  • January 2022 (3)
  • November 2021 (2)
  • October 2021 (3)
  • September 2021 (1)
  • August 2021 (3)
  • July 2021 (4)
  • April 2021 (5)
  • March 2021 (3)
  • February 2021 (6)
  • January 2021 (6)
  • December 2020 (2)
  • October 2020 (3)
  • September 2020 (2)
  • August 2020 (2)
  • July 2020 (1)
  • June 2020 (2)
  • April 2020 (1)
  • March 2020 (1)
  • February 2020 (1)
  • January 2020 (1)
  • August 2019 (2)
  • June 2019 (1)
  • March 2019 (1)
  • January 2019 (1)
  • December 2018 (1)
  • November 2018 (1)
  • September 2018 (1)
  • July 2018 (1)
  • June 2018 (2)
  • October 2017 (2)
  • September 2017 (1)
  • August 2017 (1)
  • June 2017 (1)
  • April 2017 (2)
  • March 2017 (2)
  • February 2017 (1)
  • December 2016 (1)
  • October 2016 (1)
  • August 2016 (2)
  • July 2016 (1)
  • June 2016 (1)
  • March 2016 (2)
  • February 2016 (1)
  • January 2016 (2)
  • November 2015 (1)
  • October 2015 (1)
  • September 2015 (1)
  • August 2015 (2)
  • July 2015 (2)
  • June 2015 (2)
  • May 2015 (1)
  • April 2015 (2)
  • March 2015 (1)
  • February 2015 (3)
  • January 2015 (1)
  • December 2014 (2)
  • November 2014 (4)
  • October 2014 (1)
  • September 2014 (2)
  • August 2014 (2)
  • July 2014 (2)
  • June 2014 (2)
  • May 2014 (3)
  • April 2014 (2)
  • March 2014 (3)
  • February 2014 (3)
  • January 2014 (2)
  • December 2013 (2)
  • November 2013 (2)
  • October 2013 (2)
  • September 2013 (2)
  • August 2013 (2)
  • July 2013 (3)
  • June 2013 (2)
  • May 2013 (3)
  • April 2013 (2)
  • March 2013 (3)
  • February 2013 (5)
  • January 2013 (2)
  • December 2012 (4)
  • November 2012 (3)
  • October 2012 (4)
  • August 2012 (5)
  • July 2012 (5)
  • June 2012 (4)
  • May 2012 (3)
  • April 2012 (7)
  • March 2012 (3)
  • February 2012 (3)
  • January 2012 (5)
  • December 2011 (6)
  • November 2011 (7)
  • October 2011 (6)
  • September 2011 (2)
  • August 2011 (7)
  • July 2011 (7)
  • June 2011 (4)
  • May 2011 (4)

Tag Cloud

7-7-7 Plan Citizens Insurance oir Rick Scott sb-480 senator fasano senator richter
Unless otherwise attributed, articles on this site are the opinions of Scott Johnson.

Mission: Satisfaction Guaranteed

Johnson Strategies (JS) works to establish and achieve goals promoting products or idea's to customers, state policymakers and the consuming public. This is done on behalf of both corporate and individual clients, non-profit trade associations and membership societies. JS specializes in planning, communication and advocacy for a wide range of interests focused in the property and casualty insurance field. Our simple mission is to guarantee satisfaction based on a comprehensive needs analysis and mutually defined goals.

Categories

Popular Tags

7-7-7 Plan Citizens Insurance oir Rick Scott sb-480 senator fasano senator richter

Post Calendar

May 2025
M T W T F S S
 1234
567891011
12131415161718
19202122232425
262728293031  
« Apr    

Recent Posts

  • AGENTS, ADJUSTERS, INSURERS BEWARE—THE RED FLAGS OF FRAUD!
  • The Delicate Balance: Addressing MGA Concerns Without Creating Market Uncertainty
  • Are Florida’s MGA’s Under Attack?!
  • A Smarter Approach to Hurricane-Resilient Homes and Insurance Stability…
  • How Do Other Jurisdictions Manage Hurricane Risk Exposure?
  • PART II of “What Agents Need to Know About Public Adjusters…
  • Latest Decision on AOB!

[footer_backtotop]

Copyright 2012, Johnson Strategies LLC. Website design/development by Cali Design LLC