Spicy! That was the first comment from an audience member after Rene Sigman and I badgered Steve Badger in a panel discussion on important issues of property insurance adjustment in Texas.
In my opinion, Steve Badger did an excellent job – but there were some significant differences of opinion between his opinion and those shared by Rene Sigman and myself. For the public adjusters in the audience, many suffered and were tormented by some of the difficult questions.
Here are some of the issues we addressed:
- Ceiling for public adjustment fees.
- Fraudulent estimates
- Completed repair
- Unauthorized exercise of public adjustment
- Contractors, experts and salespeople who act as adjusters.
- Valuation
- Depreciation of work
- Settlement at ONU and the Public Adjustment Fee
- Prove date of loss and concurrent causation
- Attorneys competing with public adjusters
- Raising the bar to become a property insurance adjuster
The only thing that seemed to be agreed upon was the call for public adjusters to raise the bar for licensing. Insurance adjusters involve the public trust, and Steve Badger went so far as to say that insurance companies and independent adjusters in Texas should have a higher requirement for licenses as well.
Property insurance adjustment is very important work. It is not an easy job and involves so many technical areas of competence in order to become really good at real estate adaptation. Property insurance adjusters must fully understand the policy language, relevant statutes, regulations and common law. It requires an understanding of construction and valuation of many property types. Attention to fine detail as well as considerable interpersonal skills are necessary qualities of good property insurance adjusters. Those who do adaptation work must be people of high character. It is not an easy trade to do properly. I have great respect for those who do their best in this field. I̵
7;m sure Rene Sigman and Steve Badger feel the same way.Some major issues drew the ire of the audience and should not have been such controversial topics. For example, when Steve Badger described the practice of some public adjusters or contractors having two sets of estimates—a higher one for the insurance company and a lower one for the policyholder when the insurance company was tricked into believing the higher estimate—the room had a small eruption because many felt that Steve was accusing everyone in the room to do this. Of course, everyone agreed that this was not right and an unethical practice. But the excited response from some in the audience was as if Badger was accusing them of committing fraud.
One of my notes reflected an agreement by Steve Badger that the insurance company’s preferred contractor would not adjust the loss. Indeed, Badger mentioned that third-party providers and experts should not replace the role of the property insurance adjusters and especially should not decide what not to pay.
For Texas public adjusters, the question of how much can be charged was a matter of concern. My blog post, Are Texas Public Adjuster Contracts in Jeopardy? Don’t miss the panel discussion at TAPIA’s spring conference!emphasized that we would discuss the issue.
Badger skillfully had me explain the ruling and that the Texas Department of Insurance (TDI) apparently does not agree that public adjusters can collect more than 10% on any adjusted amount. In other words, what is usually done is that public adjusters charge a higher percentage of collected amounts when they are set up in a claim after payments have been made, as long as the amount charged as a fee is not more than 10% of the total paid claim. TDI has decided that this is sanctionable. I had to explain this to the audience and warn them that they could face sanctions for doing so, based on the recent findings mentioned in my previous blog post. We must follow the law and the decisions of those who enforce the law.
In conclusion, the lesson from this event is that it is important for policyholder advocates to consider the views of their counterparts in the insurance industry. Rene Sigman noted how much law and adjustment practice has changed since she started in this business over 20 years ago. Her point is well taken, and the lesson is that nothing ever stays the same.
Insurance companies may want to change how their products work, what is covered and how adjustments are processed. Accepting these changes and whether these changes are legal can indeed cause significant debate. It makes property insurance compliance and law much more dynamic than it was a decade ago and much more dynamic than when I started over forty years ago.
I really enjoyed the debate. I felt it was a very tough crowd for Badger. This time I had a friend, Rene Sigman, who was more than capable of helping me. Still, I learned a lot from listening to Steve and then I learned from the questions from the audience.
If you ever have a chance to watch and learn from Steve Badger or Rene Sigman, don’t miss it. It was even better yesterday because of audience questions and participation.
Today’s thought
Tell me and I forget. Teach me and I remember. Get involved and I’ll learn.
—Benjamin Franklin
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