An emergency rule capping adjuster’s fees at 10 percent of the claim payment has been issued in Florida to prevent Hurricane Katrina’s victims from becoming “gouged” by public insurance adjusters. In addition to limiting fees, the rule contains other consumer protections for victims who consider contracting with public adjusters.
The new rule also gives the consumer 14 days to cancel a contract made with a public adjuster without penalty and prohibits public adjusters from demanding any up-front payments or compensation prior to final settlement of the claim.
Florida’s Chief Financial Officer Tom Gallagher found the need to impose the rules after Hurricane Charley hit in August 2004 and there were reports of adjusters demanding fees of up to 25 percent.
“Floridians upset after seeing their property damaged by Hurricane Katrina can be particularly vulnerable to signing contracts that are unfair and possibly unnecessary,” Gallagher said. “They need to strongly consider whether they need the assistance of a public adjuster, as any fees will inevitably come out of their claim settlement.”
Gallagher also warned Floridians to make sure they are dealing with a licensed public adjuster. The Division of Insurance Fraud arrested seven individuals last year for acting as public adjusters without a license. He advised consumers to check on the license status of an adjuster agent or company by visiting www.fldfs.com, and click on Verify Before You Buy, or call the Department of Financial Services’ Helpline at 1-800-342-2762.
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