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Are insured appointed appraisers without a public agent license breaking the law? | Property Insurance Protection Law Blog



The state of Florida, through its Department of Financial Services, makes a legal argument that those appointed as appraisers by an insured must fall within the licensing requirements for a public adjuster. Florida makes this argument in an administrative hearing seeking to discipline a public adjuster.1 Buried in that case is the following argument from the department, which, if successful, will change who can be appointed as appraisers:

Counts VI, IX, and X require analysis of two threshold issues: 1) regarding Counts VI

and X, whether assessment is conduct that falls within the definition of a public adjuster in section 626.854(1

), Florida Statutes…

The term ‘Public Adjuster’ is defined in section 626.854(1), Florida Statutes.

A “public adjuster” is any person, other than a duly licensed attorney exempted under s. 626.860, who, for money, commission, or anything else of value, directly or indirectly prepares, completes, or submits an insurance claim for an insured or third party party creditor or who, for money, commission or any other thing of value, acts on behalf of, or assists an insured or third party injured party in negotiating or effecting settlement of a claim or demands for loss or damage covered by an insurance contract or who advertises for employment as an adjuster of such claims. The term also includes any person who, for money, commission or anything else of value, directly or indirectly solicits, investigates or adjusts such claims on behalf of a public adjuster, an insured or a third party creditor.

Under the first test, individuals act as a public adjuster when they: directly or indirectly act or participate in the negotiation for or effecting a settlement of an injury or damage covered by an insurance contract, on behalf of an insured, for money, commission or any other of value.

Under the second test, individuals act as a public adjuster when they: directly or indirectly investigate a claim, on behalf of a public adjuster, insured or third party creditor, for money, commission or any other thing of value.

Because an appraiser’s work falls within the statutory definition of “public adjuster,” an appraiser is subject to the requirements of the Florida Insurance Code. This would include the Adjuster’s Code of Ethics. Accordingly, respondent is subject to discipline for misconduct that occurred during respondent’s employment as an appraiser.

With hundreds of appraisal cases in Florida and thousands of appraisal cases in the country, there is not a judge who has ever said that the policyholder’s appraiser must be a licensed public adjuster. The Florida Department of Financial Services is asking this administrative law judge to be the first to make such a statement.

In researching the matter, I surprisingly found an opinion that appears to support the department’s position – a 2018 post written by a former Merlin Law Group attorney as part of this blog, Are property insurance appraisers regulated? – A reminder of the recently passed HB 911 for those going to Florida to help with Hurricane Michael:

The amended statutes have clarified that whoever is only a public adjuster and/or a lawyer who can for money, commission or any other thing of value, directly or indirectly, prepare, complete or file and claim against an insured; negotiate or effect settlement of a claim; or investigate, or adjust a claim on behalf of the insured. Unfortunately, because an appraiser’s job is to investigate, adjust, prepare, or complete the claim, and negotiate or effect settlement of a claim, an appraiser who is not a licensed adjuster may be found adjusting without a license or engaging in the unauthorized practice of law.

For what it’s worth, that’s not my legal opinion. Valuation is not adjusting the work. This is what can happen after the adjustment fails. Public adaptation is not assessment.

I raised the issue a year ago The Florida Department of Financial Services incorrectly believes that appraisers must be Florida licensed adjusterswhere I said:

Appraisers in an insurance review proceeding are not adjusters. They do not adjust the claim. Adjusting a requirement is very different from what participants in an assessment are required to do. Perhaps insurance regulators need to show up for some continuing education classes at next month’s Windstorm Conference or at an IAUA training seminar to learn more about these differences between adjustment and assessment and how assessments are an alternative dispute resolution process.

If we want to write laws so that people know what is legal versus illegal, they should be clear. If we want to require a license to be an appraiser or judge in the appraisal process, we should write a law that specifically explains that. We could write a law limiting appraisers to licensed adjusters, but there is no such law today.

It seems to me that Department of Financial Services lawyers are simply trying to win their case at all costs. They make an alternative argument about how a statute with criminal implications can be argued to apply to appraisal when no judge, no case, and no clear law has ever indicated that only public adjusters can be a policyholder’s appraiser.

On the other hand, there is a first time for everything! Perhaps the administrative law judge will agree with the Department of Financial Services. If that is the case, WHO can be appointed as an appraiser will be much more limited and have criminal consequences for those who are not licensed.

Today’s thought

An intelligent person is never afraid or ashamed to find fault in his understanding of things.

—Bryant H. McGill


1 Department of Financial Services v. ThomasDOAH No. 22-984PL [Department’s Proposed Written Report and Recommended Order] (Fla. Div. of Admin. Hrgs. – filed Dec. 16, 2022).


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