As a public adjuster, you put your reputation on the line as a knowledgeable and skilled advocate for policyholders. But even with all that knowledge and skill, it’s hard to keep up with the ever-changing laws and regulations governing your profession. That complexity is compounded in Florida, where the legislature overhauled the state’s insurance-claim laws in December 2022 and then followed up with more changes during its 2023 regular session, including laws specifically targeting public adjusters.
We created this guide to help you make sense of all these complex laws and rules. It delves deep into Florida’s statutes and administrative code, covering topics from your relationship with clients and insurance companies, to compensation structures, to prohibited conduct and conflicts of interest.
Although we cover the topics that are most important to PAs, this guide doesn’t recite each and every law and regulation. For that, you’ll want to review the adjuster provisions in the Florida Insurance Code and related regulations. If you’re looking for more general information about insurance-claim laws in Florida, including deadlines, standards, and more, check out our Florida Guide to Property Insurance Claims.
Florida’s Definition of Public Adjusting
Before you spend the time and energy figuring out how you’re regulated as a public adjuster, you should probably confirm whether you’re regulated as a public adjuster. In the case of Florida, a public adjuster is anyone who, for money or other form of compensation, engages in any of the following activities:
- directly or indirectly preparing, completing, or filing an insurance claim on behalf of an insured or third-party claimant;
- acting on behalf of or aiding an insured or third-party claimant in negotiating or settling a claim for loss or damage covered by an insurance contract;
- advertising for employment as an adjuster of such claims; or
- directly or indirectly soliciting, investigating, or adjusting such claims on behalf of a public adjuster, an insured, or a third-party claimant.
In other words, subject to the exceptions below, the state of Florida probably considers you a public adjuster if you get paid to (1) prepare, submit, negotiate, or settle claims for policyholders or third-party claimants or (2) assist or solicit others for those claims. Remember, getting paid is a requirement of being a public adjuster in Florida. So if you provide these services for free, you may not need a public adjuster’s license in the Sunshine State.
If this definition looks familiar, that’s because it’s loosely based on the Public Adjuster Licensing Model Act and therefore resembles many other states’ definition of public adjusting, such as Georgia’s.
Carveouts and Exceptions to Florida’s Definition of Public Adjusting
Just as important as Florida’s definition of public adjusting are its exceptions. Florida statutes exempts any of the following individuals or firms from the definition of public adjusting, meaning they can engage in the activities described below without needing a PA license.
- Individuals who merely photograph or inventory damaged personal or business property, or those performing duties under another professional license, provided they don’t solicit, adjust, investigate, negotiate, or attempt to settle a claim.
- Health care providers and agents.
- Licensed health care providers or their employees who prepare or file health insurance claims on behalf of patients.
- Licensed health insurance agents assisting insured individuals with coverage questions, medical procedure coding issues, balance billing issues, understanding the claims filing process, or filing a claim related to health insurance policies.
- Individuals filing health claims on behalf of another without compensation.
- Attorneys licensed to practice law in Florida.
Special Provisions for Attorneys and Agents
Florida law, specifically Section 626.860, exempts attorneys who are duly licensed to practice law in the state and in good standing with The Florida Bar from needing a license to adjust or participate in the adjustment of any insurance-related claim.
Additionally, as per Section 626.862, licensed and appointed insurance agents in Florida can adjust losses for the insurer they represent as an agent, provided they have the insurer’s authorization. However, they must adhere to the standards of conduct, and any violation or misconduct can lead to the suspension or revocation of their agent license and appointment.
What’s the implication of who counts as a public adjuster? Well, according to Florida statutes, only a public adjuster (or an agent in special circumstances or an attorney) can do the following:
- Prepare, complete, or file an insurance claim for an insured or a third-party claimant;
- Act on behalf of or aid an insured or a third-party claimant in negotiating for or effecting the settlement of a claim for loss or damage covered by an insurance contract;
- Offer to initiate or negotiate a claim on behalf of an insured;
- Advertise services that require a license as a public adjuster; or
- Solicit, investigate, or adjust a claim on behalf of a public adjuster, an insured, or a third-party claimant.
Public Adjusting License Types in Florida
In the vibrant world of insurance adjusting, Florida stands out with its unique set of licensing types. Whether you’re an adjuster looking to operate in the Sunshine State or a policyholder wanting to understand the professionals you’re dealing with, it’s essential to grasp the distinctions between these licenses. Let’s break down the various adjuster license types in Florida, making it as clear as the state’s famous blue skies.
Defined in Section 626.8548, an all-lines adjuster is someone who, for compensation, directly or indirectly determines the amount of any claim, loss, or damage payable under an insurance contract or works to settle such claims. This individual can also solicit claims on behalf of a public adjuster. However, they don’t include those who merely photograph or inventory damaged property unless they also adjust, investigate, or negotiate settlements. Importantly, this definition doesn’t apply to life insurance or annuity contracts.
An independent adjuster, as per Section 626.855, is a person licensed as an all-lines adjuster. They can be self-appointed or employed by an independent adjusting firm. Their primary role is to determine the amount of any claim, loss, or damage payable under an insurance contract on behalf of an insurer or to settle such claims.
Company Employee Adjuster
Section 626.856 defines a company employee adjuster as someone licensed as an all-lines adjuster who works directly for an insurance company or its wholly-owned subsidiary. Their role is similar to the independent adjuster but is specifically tied to the insurer they represent.
Public Adjuster Apprentice
A public adjuster apprentice, according to Section 626.8561, is an all-lines adjuster who assists a public adjusting firm in determining the amount of any claim, loss, or damage payable under an insurance contract. They must be appointed and employed or contracted by a public adjusting firm and meet specific requirements.
Nonresident Public Adjuster
For those not residing in Florida but looking to operate within its borders, Section 626.8582 defines a nonresident public adjuster. This individual isn’t a Florida resident but is licensed as a public adjuster in their home state. If their state doesn’t license public adjusters, they must pass Florida’s adjuster examination. They can be self-employed or associated with a public adjusting firm.
Nonresident All-Lines Adjuster
Section 626.8584 introduces the nonresident all-lines adjuster. Like the nonresident public adjuster, this individual isn’t a Florida resident. They must be licensed as an adjuster in their home state for all lines of insurance, excluding life and annuities. If their state doesn’t license such adjusters, they must meet specific qualifications. They can be self-appointed or associated with an adjusting firm, insurer, or public adjuster.
Marketing and Solicitation Restrictions
Florida has set forth specific guidelines to ensure that public adjusters operate with integrity, transparency, and respect for policyholders. Let’s dive into these guidelines to ensure you’re not only effective but also compliant in your outreach efforts.
Timing of Solicitation
Florida is particular about when you can reach out to potential clients. As per Section 626.854(5), public adjusters can only solicit insured individuals or claimants:
- From Monday to Saturday.
- Only between the hours of 8 a.m. and 8 p.m.
Content of Advertisements
The content of your advertisements matters greatly. Section 626.854(8) deems it an unfair and deceptive practice to circulate any advertisement or statement that is untrue, deceptive, or misleading about the business of insurance. Specifically, the following are considered deceptive or misleading:
- Inviting a policyholder to submit a claim when there’s no covered damage.
- Offering monetary or other inducements to invite a policyholder to submit a claim.
- Stating there’s “no risk” to the policyholder in submitting a claim.
- Using logos, shields, or statements that could be misconstrued as being from or endorsed by a governmental agency.
To ensure clarity and transparency, all written advertisements (like newspapers, magazines, flyers, and bulk mailers) must include the following disclaimer in bold, capital letters:
“THIS IS A SOLICITATION FOR BUSINESS. IF YOU HAVE HAD A CLAIM FOR AN INSURED PROPERTY LOSS OR DAMAGE AND YOU ARE SATISFIED WITH THE PAYMENT BY YOUR INSURER, YOU MAY DISREGARD THIS ADVERTISEMENT.”
Prohibited Offers and Inducements
Florida law is clear about what public adjusters can and cannot offer to clients or prospective clients:
- Under Section 626.854(9), public adjusters or their representatives cannot offer monetary loans or advances.
- Section 626.854(10) prohibits giving or offering any article of merchandise worth more than $25 as an advertising tool or inducement to enter into a contract.
Public Adjusters and their Policyholder Clients
Florida imposes a ton of rules on PAs when it comes to your relationship with your policyholder client. We tackle all of these issues in three chunks — the contract, your pay, and other rules and regs.
The Contract between a Public Adjuster and a Policyholder
In Florida, the relationship between a public adjuster and a policyholder is cemented through a contract. This contract is not just a mere agreement but is governed by specific provisions to ensure transparency, fairness, and protection for both parties. Let’s delve into the intricate details of what this contract must entail.
Basic Contractual Requirements
As of July 1, 2023, when a public adjuster enters into a contract:
- Written Agreement: The public adjuster cannot collect fees on payments made to a named insured without a written contract with the named insured or their legal representative. [626.854(6)(a)]
- Third-party Services: If services from a third party are required, the named insured must agree in writing to procure these services. If the public adjuster contracts with a third-party service provider without the insured’s written consent, the adjuster must bear the third party’s fees. [626.854(6)(b) & (c)]
- Representation: If a public adjuster represents anyone other than the named insured in a claim, the fees should be paid by the third party and not charged back to the named insured. [626.854(6)(d)]
An insured or claimant has the right to cancel the contract:
- Within 10 days after the contract’s execution.
- If the contract was based on events declared as a state of emergency by the Governor, the cancellation can be done within 30 days after the loss date or 10 days after the contract’s execution, whichever is longer. [626.854(7)]
The contract must contain a clear cancellation clause in minimum 18-point bold type. [626.854(7)]
Prohibitions and Disclosures
- Public adjusters cannot charge for services related to a claim if they don’t enter into a contract with an insured or a third-party claimant. [626.854(22)]
- The contract must be titled “Public Adjuster Contract” and contain a fraud statement as per [626.8796(1)].
- The contract must contain specific details like the full names, addresses, phone numbers, and email addresses of both parties, a brief description of the loss, and the insurance company’s name and policy number. [626.8796(2)]
- The public adjuster must provide the insured with a separate disclosure document before signing the contract, detailing the claim process and the roles of different adjusters. [626.8796(6)]
Additional Contractual Terms
According to the Florida Administrative Code, Rule 69B-220.051:
- The contract must also include the insured’s phone number, the address of the loss if different from the insured’s current address, a brief description of the loss, the insurance company’s name and policy number, and all methods of compensation and fees. [69B-220.051(5)]
- The contract must be signed by the public adjuster who solicited it, and a copy of the contract and any addendum must be provided to the insured or claimant at the time of signing. [69B-220.051(6)]
A contract that doesn’t adhere to these provisions is considered invalid and unenforceable. [626.8796(7)]
Public Adjuster Compensation and Pay in Florida
In Florida, the compensation structure for public adjusters is meticulously outlined to ensure fairness and transparency. The state has set forth clear guidelines on how public adjusters can be compensated for their services, especially in the context of reopened or supplemental claims, claims related to state emergencies, and other specific scenarios. Let’s break down these provisions to understand the compensation landscape for public adjusters in Florida.
Reopened or Supplemental Claims
If a public adjuster is hired to reopen a claim or file a supplemental claim for additional payments on a claim that has been previously settled or paid in part/full by the insurer:
- The adjuster cannot charge or accept compensation based on the previous settlement or claim payments for the same cause of loss.
- Compensation must solely be based on the claim payments or settlements obtained through the adjuster’s efforts after the contract’s execution. This compensation for the reopened or supplemental claim cannot exceed 20% of the additional claim payment. [626.854(11)(a)]
Public adjusters in Florida are subject to the following compensation limits:
- State of Emergency Claims: For claims arising from events declared as a state of emergency by the Governor, the compensation cannot exceed 10% of the insurance claim payments or settlements made to the insured. This limit applies to claims made during the year following the emergency declaration. [626.854(11)(b)1.]
- Non-Emergency Claims: For claims not based on state-declared emergencies, the compensation limit is set at 20% of the insurance claim payments or settlements made to the insured. [626.854(11)(b)2.]
- Policy Limit Claims: If the claim payment or insurer’s written commitment to pay equals or surpasses the policy limit for any part of the policy and is provided within specific timeframes, the compensation is capped at 1% of the insurance claim payments or settlements. [626.854(11)(b)3.]
- Pre-Contract Settlements: If the insurer agrees to pay or makes a payment before the execution of the public adjusting contract, the public adjuster is not entitled to any compensation from that amount. [626.854(11)(b)4.]
Exclusions from Compensation
- Public adjusters cannot base their compensation on policy deductibles. [626.854(11)(c)]
- Compensation cannot be derived from amounts related to additional living expenses unless there’s a separate agreement with the insured that includes a specific disclosure. [626.854(11)(d)]
Prohibitions and Restrictions
- Adjusters cannot increase their rate of compensation merely because a claim goes into litigation. [626.854(11)(e)]
- Any tactics or strategies used to exceed the compensation limits set forth are considered violations and are punishable under s. 626.8698. [626.854(11)(f)]
Beyond Contracts and Compensation
In Florida, the relationship between public adjusters and their clients is not just defined by contracts and compensation. The state has implemented a series of regulations that further shape this relationship, ensuring that the rights of policyholders are protected and that public adjusters operate with the utmost integrity and professionalism. Let’s delve into these rules and regulations:
A public adjuster cannot finalize a settlement of a claim without the explicit approval of the insured or claimant. This provision ensures that the policyholder remains in control of the claim resolution process and is satisfied with the outcome. Source: Florida Administrative Code Rule 69B-220.051(7)
Providing a Written Estimate
Within 60 days of entering into a contract with a client, a public adjuster is obligated to provide the insured or claimant with a detailed written estimate of the loss. This estimate is crucial for the submission of a proof of loss or any other claim for insurance proceeds. The estimate should be itemized, detailing the costs associated with equipment, materials, labor, and supplies, all in line with accepted industry standards. This document must be retained by the public adjuster for a minimum of five years and should be made available upon request to the insured, the insurer, or the department. Source: 626.854(12)(a)
If the public adjuster fails to provide this written estimate within the stipulated 60-day period (unless due to factors beyond their control), the insured has the right to cancel the contract without incurring any additional penalties or fees from the adjuster. Source: 626.854(12)(b)
The Relationship Between Public Adjusters and Insurance Companies
Florida’s regulations ensure that this relationship is characterized by transparency, cooperation, and respect for the rights of the insured. Let’s break down the key aspects of this relationship as outlined by Florida law:
1. Notice for Meetings and Inspections
Insurance representatives, whether they’re company employee adjusters, independent adjusters, attorneys, or investigators, must provide a minimum of 48 hours’ notice to the insured, their public adjuster, or legal representative if they wish to schedule a meeting or conduct an onsite inspection of the insured property. This ensures that the insured has adequate time to prepare. However, if the insured or claimant hasn’t received this notice, they can deny access. While this 48-hour notice is a standard, the insured or claimant has the option to waive it if they choose. Source: 626.854(14)
2. Ensuring Prompt Communication and Access
Public adjusters have a responsibility to:
- Promptly notify the insurer about the claim.
- Provide the insurer with a copy of their contract.
- Make the insured property available for inspection.
- Allow the insurer an opportunity to interview the insured about the loss and claim.
This ensures that the insurer has all the necessary information to investigate and respond to the claim in a timely manner. Source: 626.854(15)
3. In-Person Meetings
Insurers cannot exclude public adjusters from in-person meetings with the insured. Both the insurer and the public adjuster are expected to communicate and collaborate to reach an agreement regarding the scope of the covered loss. This provision ensures that the insured’s representative is always in the loop, but it also respects the terms and conditions of the insurance policy in place. Source: 626.854(15)(a)
4. Unrestricted Access
Public adjusters cannot hinder or prevent insurance representatives from accessing the insured or the property that’s the subject of a claim. This ensures that the insurer can conduct necessary inspections and gather information without undue obstructions. Source: 626.854(15)(b)
5. No Obstruction Policy
Public adjusters are prohibited from acting in a way that obstructs or delays an insurer or their adjuster from inspecting any part of the insured property related to a claim. While the public adjuster has the right to be present during the insurer’s inspection, they cannot delay the process. If the public adjuster’s availability hinders the insurer’s inspection, the insurer should be allowed access to the property even without the public adjuster or insured’s presence. Source: 626.854(15)(c)
Communication with Other Parties
Public adjusters are prohibited from preventing or attempting to dissuade their clients from communicating privately with their insurer, company employee adjuster, independent adjuster, attorney, or any other relevant party concerning the settlement of their claim. Source: Rule 69B-220.201(4)(a), Florida Administrative Code
Other Prohibited Acts: Conflicts of Interest, Contractors, and More
Public adjusters play a crucial role in the insurance claims process, acting as advocates for policyholders. However, to ensure the integrity of this role, Florida has set forth a series of regulations to prevent conflicts of interest and other unethical practices. Here’s a detailed breakdown:
Referrals and Compensation
Public adjusters, their apprentices, or anyone acting on their behalf are prohibited from:
- Accepting business referrals from any person they conduct business with if there’s any form of agreement to compensate that person for the referral.
- Compensating anyone, other than another public adjuster, primarily for referring business to them. Source: 626.854(13)
Salvaged Property and Power of Attorney
- Cannot acquire any interest in salvaged property without the written consent of the insured.
- Are prohibited from entering into a contract or accepting a power of attorney that gives them authority to choose who will perform repair work or provide services that would cost the insured more than what’s payable to the public adjuster for their services. Source: 626.854(17,18)
Conflict of Interest in Reconstruction and Repair
Public adjusters cannot:
- Participate, directly or indirectly, in the reconstruction, repair, or restoration of damaged property they’re adjusting.
- Engage in activities that could be seen as a conflict of interest, such as receiving remuneration from any salvage, repair, or other business entity connected to a claim they’re adjusting. Source: 626.8795
Specific ethical considerations binding upon public adjusters include:
- Not preventing or trying to dissuade insured or claimants from speaking privately with the insurer, adjusters, attorneys, or any other person about the claim settlement.
- Not entering into contracts or accepting powers of attorney that give them authority to choose repair personnel.
- Ensuring all contracts for their services are in writing and detail all terms and conditions.
- Not accepting amounts that exceed the compensation limits imposed by Section 626.854(10), F.S.
- Not acting or representing as both a public adjuster and a general lines agent for the same insurance claim.
- Not representing anyone on a claim if they previously adjusted that claim while representing an insurer or independent adjusting firm.
- Responding within 30 days to any written or electronic request for claim status from a claimant, insured, or their designated representative. Source: Rule 69B-220.201, Florida Administrative Code
The department can deny, suspend, or revoke the license of a public adjuster or their apprentice and impose a fine for violations such as:
- Violating any provision of this chapter or a department rule or order.
- Receiving payment or anything of value as a result of an unfair or deceptive practice.
- Accepting any fee, kickback, or other compensation for services not performed. Source: 626.8698
Florida’s regulatory framework for public adjusters is both comprehensive and detailed, reflecting the state’s commitment to ensuring that policyholders receive fair and equitable treatment in the claims process. As public adjusters, staying informed and compliant with these regulations is not just a legal obligation but a testament to professional integrity and dedication to serving clients’ best interests. By adhering to these guidelines, public adjusters can uphold the highest standards of the profession, fostering trust and ensuring the continued value of their services in the insurance industry.