New Jersey Lawmaker Seeks to Cap Public Adjuster Fees in Wake of Sandy

A leading New Jersey lawmaker is planning to introduce a bill that would cap how much a public adjuster can charge a homeowner for insurance claim assistance for certain emergencies.

The state’s Assembly Speaker Pro Tempore Jerry Green (D-Union/Middlesex/Somerset) announced his plan last week. He said he has been hearing complaints from homeowners affected by Superstorm Sandy who claimed they were overcharged by public adjusters.

Green said he decided to pursue the bill after hearing “numerous complaints” during a meeting in Union County from homeowners affected by Sandy who were overcharged by public adjusters hired to appraise their insurance claims.

“Public adjusters are supposed to represent and look out for the best interests of the homeowner, but according to these residents, some of these adjusters were charging up to 40 to 50 percent of what the insurance company was to pay eventually.”

“This is a crime. A loan shark doesn’t even charge that much,” said Green. “Unfortunately, there is nothing currently in the books to prevent these individuals from taking advantage of these homeowners. This bill changes that.”

The bill would prohibit an individual, firm, association or corporation licensed under the “Public Adjusters’ Licensing Act” from charging, agreeing to or accepting any compensation in excess of 10 percent of the amount paid out by the insurer for claims based on events that are the result of a catastrophic loss occurrence.

As defined in the bill, “catastrophic loss occurrence” means an occurrence designated by the U.S. President or the Federal Emergency Management Agency, or the state governor or the Department of Law and Public Safety, or any other authorized federal, state or local agency, as an emergency or a disaster. A catastrophic loss occurrence can include, but is not limited to, a flood, hurricane, storm or earthquake.

The compensation level established by the bill would apply to such claims made for a period of one year from the occasion of the declaration of the catastrophic loss occurrence.

“These natural disasters bring out the best and worst in people. For every Good Samaritan, there is a hustler looking to benefit from the misfortune of others. People who’ve suffered property damage due to a natural disaster deserve someone on their side during the complicated insurance claim process, not someone who is going to make the financial hit even more severe,” said Green.

Commenting on Green’s plan, the American Association of Public Insurance Adjusters President Gene Veno said that his group has not seen any complaints nor has AAPIA received any complaints.

“What we have received are numerous requests from policyholders for finding a public adjuster to help them navigate the claims process,” Veno told Insurance Journal.

“Public adjusters provide a valuable service to policyholders nationally, and since 1994 have been offering services in New Jersey,” said Veno.

“The recent storm has left many policyholders looking for guidance and assistance that a public adjuster can provide. That assistance ranges from suggesting temporary housing to estimating the true value of their loss.”

Topics Legislation New Jersey