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What Is The Role Of A Public Adjuster In Filing An Insurance Claim?


If you have ever filed an insurance claim, you have no doubt dealt with an adjuster, i.e., the person employed by the insurance company to review your case. But there are also individuals known as public adjusters who are licensed by the State of Florida to represent individuals, such as yourself, in protecting your interests during the claims process. Remember, the insurance company’s adjuster is there to protect the company, not you. A public adjuster can thus help to level the playing field, as they understand how insurance policies and laws work better than you.

Can Public Adjuster Also Serve as Disinterested Appraisers?

Of course, public adjusters are not free. They work on a contingency basis. That means you do not have to pay them any upfront fees, but they are entitled to an agreed-upon percentage of whatever settlement you ultimately receive from the insurance company. This makes the public adjuster an interested party in resolving your insurance claim favorably.

This “interest” was also the subject of a recent decision from the Florida Second District Court of Appeals, State Farm Insurance Co. v. Parrish. This case involved a homeowners’ policy claim arising from Hurricane Irma. The homeowner retained a company as public adjuster and agreed to pay them 10 percent of any settlement.

An employee of the public adjuster subsequently appraised the homeowner’s claim at $495,079.25, which was submitted to the insurance company, State Farm. In submitting this claim, the employee also invoked the homeowner’s right under the policy to “select a qualified, disinterested appraiser” in the event State Farm disputed the amount of the claim. The employee designated the president and owner of his company as the appraiser.

State Farm objected and filed a petition in Collier County Circuit Court to “compel appraisal with [a] disinterested appraiser.” In simple terms, State Farm argued that the public adjuster could not designate itself as the disinterested appraiser, since it had a financial interest in the final settlement. The Circuit Court dismissed this petition, however, prompting State Farm to appeal to the Second District.

The appellate court sided with State Farm, albeit with some confusion. The Second District noted that State Farm appeared to have invented a new type of legal proceeding. That is, there was no such thing as a “Petition to Compel Appraisal with Disinterested Appraiser” under Florida law. Nevertheless, the Second District decided to treat this as an appeal of a final order in a normal civil case.

And in reviewing that order, the Second District said it was clear that a public adjuster hired by the homeowner could not also serve as a “disinterested appraiser,” such as that term was used in the insurance policy. Since the whole point of the appraisal process is to recommend a monetary award to the homeowner, the public adjuster’s “contingency stake” in said award was clearly a “pecuniary interest.”

The Second District noted its holding put it in conflict with the Third District Court of Appeals, which has previously held that a contingency fee arrangement does not automatically disqualify an adjuster from serving as an appraiser, so long as that arrangement is disclosed. The Second District certified the conflict to the Florida Supreme Court, which has the option of taking up the case to resolve the matter.

Contact HD Law Partners Today

If you are involved in any type of claims dispute following a hurricane or other disaster and need advice or representation from an experienced Tampa insurance attorney, contact HD Law Partners today to schedule a consultation.


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