State seldom cracks down on insurance companies and their adjusters
When Floridians complain that a claims adjuster working for an insurance company is mishandling, lowballing or delaying claims, there’s a less than 16 percent chance the adjuster will be disciplined. When there’s a complaint about a public adjuster – one who advocates for consumers – there’s a 75 percent chance the state will crack down.
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That’s based on state data on complaints and administrative actions the past two years. Video: More than 50 Miss Florida USA Pageant contestants converge poolside at the Westin Diplomat in Hollywood Some say the disparity reflects the clout of Florida’s insurance industry, which contributes mightily to the campaign funds of state officials. Others say it shows just how unprofessional public adjusters are. The Florida Department Office of Insurance Regulation takes citizen complaints about adjusters, whether hired by insurnce companies or policyholders, and decides which ones to investigate. The lop-sided ratio of investigations of public adjusters concerns Bill Newton, of the Florida Consumer Action Network: “Consumers need access to reliable adjusters so company adjusters should be investigated and disciplined the same way public adjusters are.” Barbara Zee, a homeowner in Delray Beach and board member of the Alliance of Delray Residential Association, said she’s not surprised by the disparity. “The influence…insurers have over the people in charge of regulating is so much greater (that) it would be difficult for those numbers to ever come close,” she said. The claims adjusters No matter who hires them, adjusters evaluate damage and estimate repair costs after a policyholder files an insurance claim. There are 47,040 Florida adjusters on staff at insurance companies, including those based outside the state; 29,022 independent insurance adjusters that can be hired by insurers to work on claims; and 2,602 public insurance adjusters, who are hired by policyholders. Public adjusters are generally paid a percent of the claim by the consumer. Most adjusters are trained and licensed . Attorneys don’t require a license to adjust claims and an insurance company can allow agents and, in some cases, employees to adjust claims without a license. More complaints against public adjusters The state received 246 complaints about public adjusters since February 2010 – compared to 69 against insurers’ adjusters, according to the state’s Department of Financial Services, which handles and looks into the complaints. Like most states, Florida’s Office of Insurance Regulation is funded largely by fees and fines from insurance companies, a fact that some say could give the state an incentive to punish insurers. One reason there may be fewer complaints against insurance-hired adjusters: “Consumers may file a complaint against the insurance company rather than the individual adjuster,” wrote Alexis Lambert, a department spokeswoman, in an email. The theory is echoed by several insurance experts. “When there are problems with company adjustors, regulators tend to go after the company rather than the adjuster him or herself,” Kenneth Abramson, an insurance law professor at the University of Virginia, wrote in an email. Many public adjusters work independently or as part of small firms “so when there are problems with them, there is no larger company to go after.” The state received 27,138 claims-related complaints against insurers since 2008, Lambert said, adding they include those that may not have been substantiated. The insurance regulation office investigated Harold Weston, a professor at Georgia State University’s Department of Risk Management and Insurance, said regulators may think more public adjusters need more oversight. “Insurers have claims managers with control and responsibility over their…adjusters. There are claims manuals to be followed…and there is staff training. That’s not to say company adjusters don’t get the claims adjustment wrong sometimes. But there are a few levels of supervision that should correct many of the mistakes,” Weston said.
Copyright © 2011, South Florida Sun-Sentinel
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