We are disappointed but unsurprised that an insurance industry lobbyist would mischaracterize an emergency order meant to stop insurance abuses as a “rule on public adjusters.”
As Insurance Journal itself made clear in an Oct.10 story that does not even mention public adjusters, Emergency Rule 69BER24-4 was issued following a CBS News “60 Minutes” report on independent whistleblowers who rang the alarm after insurance companies altered their estimates without their knowledge, consent or permission – reducing claims in some cases by six figures.
To suggest that this rule was issued as a “shift in regulating public adjusters and their activities” isn’t simply wrong, it’s deliberately deceptive, which is an odd way of responding to a rule written to stop deceptive practices.
Let’s be clear about what has occurred: Following Hurricane Ian, independent adjusters hired by insurance companies to help adjust claims testified that entire sections of their estimates were removed by inside desk adjusters who had never visited the damaged properties – while leaving the field adjusters’ names on the estimates – giving the impression that the estimates were written and authorized by the field inspectors.
The “60 Minutes” piece recently brought this story to the forefront. Florida’s legislature in 2023 addressed this unusual practice with the Insurer Accountability Act. The state’s chief financial officer this month issued the emergency order meant to bar such actions and took some additional steps with regard to regulating estimating damages.
The insurer lobbyist opinion is accurate in stating that all insurance adjusters, not just public adjusters, must adhere to new rules regarding the use of estimating programs such as Xactimate.
As the Journal story points out, however, the order may have some unintended consequences. The rule disallows modifications to pricing from estimating programs without extensive backup materials to justify such a change.
The issue brought forth by the whistleblowers was not about Xactimate pricing. Xactimate uses pricing data that is entered by its users. Limiting the ability of any adjuster to make necessary and appropriate revisions to the pricing data, despite the historical increase in cost of materials and labor along with supply chain shortages following 3 hurricanes (Debby, Helene, Milton), may result in inaccurate estimates and further delays for consumers.
Additionally, Xactimate’s own terms of services clearly state: “You agree not to prohibit or preclude deviations from the Price Data where contractor requirements, market conditions, demand or any other factors warrant the use of a different line item price in a specific situation.” A state prohibition on any adjuster making revisions to pricing data based on current market conditions will not help policyholders be timely, fully and fairly paid.
Xactimate’s terms of service clearly state that the company does not warrant the accuracy of pricing information and that its data should be used “as a baseline or place to begin creation of an estimate.”
Hurricanes cause significant disruptions to supply chains, not just in Florida but, in the case of Helene, throughout the Southeast. This can often lead to increased labor and material prices that won’t be reflected in estimating software. Unfortunately, Lisa Miller’s opinion piece neglects to explain how carriers are factoring that into their estimating process, or how field adjusters can factor such supply chain disruptions into their work on behalf of policyholders.
In the end, that’s who we should ALL be focused on – the policyholder. They have paid for policies that are meant to protect them and make them whole in the event of damage to their properties.
And that is the important role that public adjusters play in the insurance claims process. State-licensed public insurance adjusters serve an essential role in helping those who need help most in navigating the claims process. Public adjusters are licensed, ethical industry experts who exist solely to advocate on the behalf of consumers. We are rightfully proud of the transparency and integrity public adjusters demonstrate every day to support policyholders during a time of crisis.
Juan Moya is president of the Florida Association of Public Insurance Adjusters (FAPIA). Based in south Florida, Juan has nearly 40 years of experience in the insurance industry, with the last 20 of those years spent as a public adjuster advocating on behalf of policyholders statewide.
Topics Florida
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