Yep, you read the title correctly.
After my blog reporting that New Jersey regulators uncovered abuse of the state’s public adjuster(PA) contingency fee system, I learned of legislation to fix the problem by limiting their fees to 12.5% for catastrophe claims only.
As you know, the Florida private market limit is 10% for catastrophe’s, but…is 20% for non-catastrophe claims.
And recall that, in New Jersey after Sandy, as in Florida after the eight storms of 04/05 and before the imposition of fee caps, “some” PA’s were also found to be charging up to 50% of the policyholders payout.
But, here’s where it gets interesting.
An amendment to the New Jersey legislation, supported by the New Jersey Public Insurance Adjusters (NJPIA), would apply the 12.5% contingency fee limit across the board to all claims; not just catastrophe’s.
And, just so there’s no confusion about who was advocating what, NJPIA’s national affiliate, the National Association of Public Insurance Adjusters (NAPIA) wrote a letter to New Jersey assemblyman, Gerald Green, also endorsing a 12.5% across the board limit, saying it “…works well in New York and other states.” NAPIA General Counsel, Brian S. Goodman:
“We have carefully reviewed the position of the New Jersey Association of Public Insurance Adjusters, advocating a 12.5% fee cap, identical to the one currently in force in New York. This would mean that there is a statutory cap of 12.5% of any gross insurance settlement from dollar one, which works well in New York and other states. We are in complete agreement and support of this legislative amendment and wanted to get a letter to you articulating our support for the position of the New Jersey Association.” [Emphasis added]
Since the legal assault on Florida’s fee caps (CASE NO. 2011-CA-842), alleges, in part, a lack of substantiation for different percentages applying to catastrophes vs. non-catastrophe’s, lawmakers may wish to embrace the recommendation of NAPIA & NJPIA and limit all fee’s here to 12.5%. Why should so much of a Florida claimants money be left on the table when PA’s are willing to accept much less in New Jersey, New York and other states?
In fairness and in response to a request from me, the American Association of Public Insurance Adjusters (AAPIA), disagrees with NAPIA and NJPIA. You can read the reasons why in AAPIA’s detailed response to my request here. (See NOTE#1 below)
In the meantime, as public adjusters appalled at NAPIA/NJPIA ponder moving their membership to AAPIA, lawmakers here might ponder one fee percentage and move Florida’s non-catastrophe fee cap down to 12.5% from 20%.
After all, as NAPIA said…”it works well in…other states”!
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NOTE #1: Also, see AAPIA’s newletter to public adjusters soliciting help in opposition to the amendment in New Jersey’s Senate, here.
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