WEDNESDAY, OCTOBER 5, 2016
NEW CALIFORNIA STATUTE REGULATES PUBLIC ADJUSTERS.
Last month (September 2016) Governor Brown signed into law new consumer protections for insureds who engage the services of a public insurance adjuster (PA). The need for these protections was demonstrated, in part, by a number of complaints filed with the California Department of Insurance in connection with recent large wild fires in California.
What is a PA? When a home or a business property suffers severe damage or destruction, the owner will have to deal with some or all of the following formidable tasks: (a) reviewing and understanding the relevant insurance policy or policies, (b) determining the identity and extent of damaged or destroyed items and property, (c) assessing the value of such property, (d) submitting a claim to the insurer, (e) communicating with the insurer and the insurer's adjuster, and (f) negotiating a settlement with the insurance company. In some cases, the property owner may want to hire a professional PA to assist in assessing, compiling and resolving a claim. PAs must be licensed and bonded in California. They represent only insureds - as opposed to adjusters who work for or are hired by insurance companies. And they are typically paid a percentage of the insurance payment.
The New Statute. The newly enacted statute, Senate Bill 488, addresses three areas of concern: inappropriate fees charged by PAs in the handling of already partially resolved clams, entering existing disaster areas to solicit work prematurely from homeowners, and using inappropriate high-pressure tactics to coerce homeowners in the process of incurring a loss into signing engagement contracts. The new legislation restricts the amount of a settlement that a PA can receive in connection with an already partially resolved claim, and prohibits solicitation of PA contracts when an emergency is still in effect, when emergency responders are still on site, or when an evacuation order is still in effect. In addition, the new bill also requires PA license applicants to complete pre-licensing education requirements, pass a qualifying exam, and complete a fingerprint based background check. Finally, the bill also eases reciprocity requirements for non-resident PAs licensed in other states.
PFEIFER INSURANCE BROKERS