Public insurance adjusters play an important role for many policyholders, both commercial and residential, after a loss occurs. By all accounts, policyholders that retain the services of public adjusters generally obtain larger settlements from their insurance companies and often are able to avoid problems that could delay the claim.
In an attempt to curtail public adjuster involvement in claims, the Florida legislature (at the behest of the insurance industry lobby), pushed through legislation to prohibit public adjusters from soliciting policyholders or entering into contracts to representing claimants until 48 hours after their property was damaged. The provision, passed in 2008, read:
A public adjuster may not directly or indirectly through any other person or entity initiate contact or engage in face-to-face or telephonic solicitation or enter into a contract with any insured or claimant under an insurance policy until at least 48 hours after the occurrence of an event that may be the subject of a claim under the insurance policy unless contact is initiated b the insured or claimant.
Ultimately the Florida Association of Public Insurance Adjusters (FAPIA) and various other policyholder advocate groups began to fight back against the restriction which they believed to be unconstitutional. In October 2009, Frederick W. Kortum filed suit asking the court to declare the restriction unconstitutional as violating his constitutional right to free speech, equal protection, and to be rewarded for his industry.
After suffering defeat at the trial court level, the First District Court of Appeals reversed the ruling finding that the statute prohibited all public adjuster initiated contact and thus improperly restricted commercial speech.
On July 5, 2012, the Florida Supreme Court agreed that the 48 hour ban on public adjusters was a restriction on constitutionally protected commercial speech and that the restriction was more extensive than necessary to serve the legitimate interests of the State. Thus, the ban has been held unconstitutional and has been struck down as invalid.
Public insurance adjusters play an important role in the claim process and can help policyholders navigate complicated, and often confusing, insurance policies and adjustments. Allowing public adjusters to immediately offer their services to insureds is important and can reduce the risks of a claimant making mistakes that could cause delay or detriment to that person’s ability to recover. While we often take issue with the Florida Supreme Court’s rulings, this decision upholds the rights of the public adjusters and protects the best interests of the general, premium paying, public. As such, it should be applauded.