Thursday, December 29, 2011

Constitutionality of home insurance laws questioned | House Keys ...

FL-hurricane-discounts-tips-shutters.jpgA local public insurance adjuster and the president of a home inspectors group allege that parts of property insurance laws passed this year and last hurt their industries and are unconstitutional.

Public adjuster restrictions

In a lawsuit filed this month in Miami-Dade County Circuit Court, Eduardo Rodriguez is suing the state over changes made by a a sweeping law this year that prevent public adjusters who represent state-backed Citizens Property Insurance policyholders from getting paid for their services until the insurer makes an offer. The law also limits what they can charge after that.

Public adjusters are hired by policyholders to prepare, file or complete claims. The new law restricts fees for public adjusters representing Citizens policyholders to 10 percent over the original amount the insurer offered for a claim.

Rodriguez, president of Expert Claims Adjusters in Miami, notes in the suit that the law doesn't define an original offer but documents from Citizens imply it's a written offer after the insurer has adjusted and investigated the claim. He said the time before that is critical because a policyholder may make decisions that affect how much money they'll receive such as finding all the damages and preserving evidence.

The law "does not allow a public adjuster remuneration for performing inherent and necessary tasks until Citizens Property Insurance Corporation has made a nebulous, vague and undefined 'original offer,'" according to the suit. That violates a public adjuster's "right to contract and [other rights] such as the right to be rewarded for industry."

The same restriction doesn't apply to private insurers' policyholders: State law caps their public adjusters' fees at 10 percent for hurricane claims made during the first year and 20 percent for all other claims.

Home inspector restrictions

Steve Taylor, president of the Florida chapter of the American Society of Home Inspectors, wrote a letter to state officials recently saying changes that allow licensed contractors or engineering firms to hire unlicensed people to do inspections to verify hurricane insurance discounts but bar home inspection firms from doing the same violate unfair trade practice regulations.

"The contractor and engineer business owner can hire a non-licensed individual at a much lower wage than the other business entities who can only hire licensed individuals...As a result, the contractor and engineer business owner can deliver the wind mitigation service to the consumer at a much lower fee than the other business entities, thus creating an unfair market advantage," Taylor wrote to the Financial Services Commission, which is made up of the Cabinet.

Regulators made changes to a form used to verify hurricane insurance discounts based on changes required by a 2010 law. Despite the letter from Taylor, the Florida Cabinet approved the new form this month.

The state Supreme Court is expected to rule soon on a lawsuit alleging a 2009 law barring public adjusters from soliciting business right after a disaster violates free speech.

Photo: An employee of Category 5 Hurricane Shutters installs shutters on a home in Delray Beach. (Jim Rassol, Sun Sentinel)

Source: http://weblogs.sun-sentinel.com/business/realestate/housekeys/blog/2011/12/public_adjusters_and_home_insp.html

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