The American Association of Public Insurance Adjusters (AAPIA) believes it is important to respond to a recent story in which the Florida Office of Insurance Regulation (OIR) is quoted as stating the Florida Supreme Court's decision in Atwater v. Kotrum is not favorable for policyholders and "will have an adverse impact and consequences for Florida's homeowners," adding that the 48-hour ban on public adjuster contact with claimants was "enacted to protect homeowners from additional cost drivers to their insurance rates" and that "ultimately, all Florida consumers pay the price in increased premiums when claims are inflated for some policyholders."

Such remarks could be construed as fear mongering about services performed by public insurance adjusters.

Even more telling, the facts and recent history in Florida do not support the OIR's comments. Since the 2008 enactment of the Florida statute imposing a 48-hour ban on public adjuster contact with claimants, insurers have significantly raised their premiums for homeowners' coverage in the state of Florida.

Thus, the OIR's concern about the impact of the Atwater v. Kotrum decision on policyholders clearly misses the mark. During the 45-month period when the 48-hour ban on public adjuster contact with claimants has been in effect, Citizens Property Insurance Corp. has continued to raise premiums for Florida policyholders.

Using the OIR's analysis, policyholder premiums should have decreased or, at a minimum, remained stable during this period when the 48-hour ban on public insurance adjuster contact with claimants was in effect.

[The] article also offers remarks about public adjusters made by an executive vice president of trade group The Florida Insurance Council (FIC) that "There is no need for a pubic adjuster – who must be paid by the policyholder," adding "…insurers do a good job fairly settling claims. If there is a problem, the state has an arbitration process. If no agreement is still reached, policyholders can call an attorney."

From these remarks, the FIC would eliminate the use of public insurance adjusters entirely. This opinion ignores the Florida Legislature, Office of Program Policy Analysis & Government Accountability (OPPAGA) January 2010 report about public adjuster representation of policyholders in claims insured by Citizens Property Insurance Corporation.

The OPPAGA report analyzed Florida's public adjuster law and analyzed data for all claims filed with Citizens from March 2008 to June 2009 for a total of 76,321 claims–of which 21,545 had public adjuster representation, compared to a group of 54,776 claims that had either no representation or were represented by someone other than a public adjuster.

For catastrophic claims the difference in payments was 747% higher and for non-catastrophe claims the difference in payments was 574% higher for those policyholders who used a public adjuster.

Twenty-four years before the Florida Supreme Court decision in Atwater v. Kotrum, the Pennsylvania Supreme Court struck down as unconstitutional a provision in Pennsylvania's Public Adjuster Licensing Act of 1983 (which imposed a 24-hour ban on public adjuster solicitation of a client after a fire, other catastrophe or other occurrence) as violating the free speech rights protected by the U.S. Constitution and Pennsylvania Constitution.

In doing so, the Pennsylvania Supreme Court cited a United States Supreme Court decision in Central Hudson Gas & Electric Corp. v. Public Service Commission of New York that established a four-prong test used to evaluate the constitutionality of a statute regulating commercial speech. The Florida Supreme Court decision this month in Atwater v. Kotrum likewise applied the four-prong test to affirm that Florida's 48-hour ban on all public adjuster-initiated contact with potential claimants is likewise a violation of the commercial free speech rights of public insurance adjusters.

The Florida Association of Public Insurance Adjusters and the public adjusting profession should be commended for successfully challenging, on constitutional grounds, Florida's 48-hour ban, as abridging the commercial free speech rights of public insurance adjusters.

As the Supreme Court of Pennsylvania correctly observed long ago, contacting the victims of a disaster within 24 hours of the disaster is often necessary in order to locate the property owner before he moves to an unlisted, temporary location because of the disaster.

It should be obvious that public insurance adjusters do serve the insured well in the role as consumer advocates for the policyholder who suffered a loss.

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AAPIA Responds to Florida Officials

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