Florida CFO Bans Public Adjusters from Requiring Cash Up Front, Caps Excessive Fees

August 18, 2004

Florida’s Chief Financial Officer Tom Gallagher has issued an emergency rule banning public adjusters from requiring cash up front to adjust claims for victims of Hurricane Charley. Gallagher also limited public adjuster fees to 10 percent of the claim amount to prevent Floridians from being overcharged.

“By limiting fees, it’s our hope that homeowners and business owners dealing with the aftermath of the storm know what to expect and aren’t scammed and gouged financially by public adjusters inflating their fees,” said Gallagher, who oversees the Department of Financial Services.

Gallagher also said that while he was imposing a 10 percent cap on adjuster fees, policyholders are free to bargain with adjusters to get their services at lower rates.

Banning up-front payments also prevents individuals from taking a consumer’s money and then disappearing without ever performing the work, Gallagher added. The emergency rule also gives consumers up to 14 days to back out of a contract without penalty.

There are 400 licensed public adjusters in Florida. An additional 300 have applied for emergency licenses.

Gallagher said it isn’t necessary for consumers to hire a public adjuster to get their insurance company to pay a claim. However, some people reportedly believe it is to their benefit to have someone knowledgeable about insurance on their side to negotiate with the insurer.

Gallagher also emphasized the need for residents to be cautious in dealing with insurance adjusters and repairmen. Since Hurricane Charley made landfall on Friday, the department has fielded more than 4,700 calls from affected consumers, including pleas for help from those who believe they may have been victims of a scam.

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