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The unscrupulous public adjuster | Zalma about insurance



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Even if they are considered to be professional claimants, they must not affect the legal profession. Insurance company adjusters and independent insurance adjusters who work for insurance companies can handle insurance coverage issues but a PA may not.

In one case, a public adjuster placed an insured person in an opportunity to pay damages to the insurer. I Chubb & Son Inc. v Consoli 283 AD 2d 297, 726 N.Y.S. 2d 398 (N.Y. App. Div. 05/22/2001) was a public adjuster involved in a system with one of Chubb's adjusters to intentionally inflate a claim and then pay Chubb's adjusters to approve the claim. The insured's public adjuster was later convicted of charges of mail and tax fraud and Chubb's representative was convicted of fraud against Chubb.

The court recognized that a PA acts as an agent for the insured and that there is a well-established rule that a principal, even if innocent, is liable for fraud that falls within an agent's actual or obvious authority, the court concluded. that the insured was liable to Chubb and the claim was forfeited.

The court concluded:

[A] principal who has expressly or implicitly appointed another person to prove loss under an insurance policy is prevented from reimbursement, under an insurance policy which provides that it shall be invalid for fraud or false swearing by the insured after the loss, where the agent is guilty of fraud or false swearing in or in connection with the proof of loss …

even if the insured is unaware of misrepresentation and innocent with intent to deceive or fraud, and [even when] the agent's action is to the detriment rather than to the benefit of the insured.

Illinois, by statute, licenses public adjusters and requires:

Section 3118.65 Resident License

  1. a) Each public adjuster must complete 24 hours of continuing education before requesting renewal of the public adjustment license. Three of the 24-hour continuing education must consist of classical ethics teaching. The public adjuster should complete the training no later than 30 days before the license extension date to allow the training provider time to submit proof of completion to the institution. [IL Admin. Code 50.3118.65 Resident License (Illinois Administrative Rules (2019 Edition))]

Indiana has refused to accept agreements at all. In Professional Adjusters, Inc. v. Tandon 433 N.E. 2d 779 (1982), the Supreme Court of Indiana found that the Charter of Licensing of Certified PAs, which could then negotiate settlements between insureds and insurers, was an unconstitutional violation of the power-sharing clause, as it allowed the practice of persons not required to be admitted in the Bar Association and are not subject to discipline by the Supreme Court.

The core element of practicing law is to provide legal advice to a client. Just entering into such a relationship constitutes case law in Indiana. [ Professional Adjusters, Inc. v. Tandon (1982), Ind., 433 N.E.2d 779; In re Perrello (1979), 270 Ind. 390, 386 N.E.2d 174].

The public adjuster was hired by a client to provide legal advice. He accepted the offer offered, continued to investigate the case and gave advice on what legal action should be taken. The exercise of such a judgment on behalf of a client constitutes case law and is limited to persons who have qualified and been admitted to the Lawyer. By entering into the relationship and by providing legal advice, the public adjuster, a non-lawyer, has engaged in unauthorized law enforcement. [ Statens ex rel. Disciplinary Com’n of Supreme Court of Indiana v. Owen 486 N.E.2d 1012 (Ind., 1986)]


© 2021 – Barry Zalma

Barry Zalma, Esq., CFE, now limits his practice to working as an insurance consultant specializing in insurance coverage, insurance claims handling, bad faith insurance and insurance fraud almost as much for insurers and policyholders.

He also acts as an arbitrator or mediator for insurance-related disputes. He practiced law in California for more than 44 years as an insurance and claims management attorney and more than 54 years in the insurance industry.

Subscribe to Excellence in Claims Handling at https://barryzalma.substack.com/welcome.

He is available at http://www.zalma.com and zalma@zalma.com. Mr. Zalma is the first recipient of the first annual Claims Magazine / ACE Legend Award. For the past 53 years, Barry Zalma has devoted his life to insurance, insurance claims and the need to defeat insurance fraud. He has created the following library of books and other materials to enable insurers and their indemnity staff to become professionals in insurance claims.

Go to training available at https://claimschool.com; articles at https://zalma.substack.com, the podcast Zalma On Insurance at https://anchor.fm/barry-zalma; Follow Mr. Zalma on Twitter at https://twitter.com/bzalma ; Go to Barry Zalma videos at https://www.rumble.com/zalma; Go to Barry Zalma on YouTube- https://www.youtube.com/channel/UCysiZklEtxZsSF9DfC0Expg; Go to Insurance Claims Library-https: //zalma.com/blog/insurance-claims-library/ T the last two issues of ZIFL are available at https://zalma.com/zalmas-insurance-fraud- letter -2 / podcast now available at https://podcasts.apple.com/us/podcast/zalma-on-insurance/id1509583809?uo=4


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