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Adjusters Who Are Not Licensed

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Posted by tonyb on February 04, 2002 at 06:02:32:

Two major factors that affect insurance consumers and escape their awareness:

1. Insurance adjusters are usually state licensed to represent either the insurance company or the policyholder, not both.

2. Most insurance adjusters who represent insurance companies are not licensed at all. Staff insurance company adjusters usually operate under the license of the insurance company and are not required to study for or pass any state license exam. As a result of this loophole most insurance company adjusters are not individually licensed and the public comes to believe they represent policyholders' claims.

The following news story purports to address the problem: unlicensed, temporary adjusters. That is a long way from the real problem: unlicensed, permanent insurance company adjusters, and their rampant mispresentation. Only by licensing ALL adjusters, and training that makes clear who they represent, is the public protected.


JEFFERSON CITY, Mo. - Although well-intentioned, a proposal to require the
licensing of temporary insurance adjusters following a catastrophe is not
needed and would impede assistance to consumers during their time of need.
National Association of Independent Insurers (NAII) Counsel Ann Weber
commended the state Insurance Department's desire to "prevent unscrupulous
persons from taking advantage of the insurance-buying public with regard to
natural disasters and/or catastrophic events.

"It is the insurance industry's desire to provide immediate and accurate
adjusting of claims following a catastrophic event," she said. "It is in the best
interest of both the Missouri public and the insurance industry that unsavory
individuals be thwarted immediately from taking advantage of a crisis situation.
"NAII does not believe the emergency rule (being proposed) that entails
licensing adjusters in a catastrophe will benefit the public of Missouri. In fact, we
believe the rule would diminish the industry's goal of responding quickly to the
public's needs."

Although the major fraudulent activity occurs within the first few hours or days
after a catastrophic event, she said, the proposed regulation would not require
the licensing of adjusters until 15 days after the event. Requiring such adjusters
to be licensed after 15 days, she said, will only impede insurers' efforts to
speedily resolve claims and assist the public in resuming their daily activities.
"Insurance company resources will be relegated to complying with the
registration process instead of wrapping up as quickly as possible the needs of
the public in a crisis situation," she said. Missouri's existing unfair claims
settlement practices law includes "adjusters" and "public adjusters" within the
definition of "insurer." Any adjuster who fails to act in good faith in accordance
with that law can be fined $25,000 per violation, up to $250,000 total. Any
independent adjuster or contractor who commits a criminal act is subject to
criminal penalties, including incarceration.

The optimal approach to protecting the public following a catastrophe would be
to set up an immediate interchange between the insurance industry and the
Insurance Department, Weber said. "The insurance industry can compile a
listing of authorized personnel permitted at a disaster site," she said. "This
database would maintain a very tight rein on the admitted personnel at a
catastrophe site. A command post at or near the disaster site(s) manned by
representatives of the Insurance Department, the insurance industry,
consumers and law enforcement personnel would be beneficial in achieving the
goal of maximum security through an immediate flow of information between all

Policyholder Resources

Help on the way: this content is local to your area in that it affects virtually everyone in your area, indirectly or directly: property insurance policyholders. When the next news stories run having to do with a local disaster such as a hurricane, earthquake, flood, tornado, fire, etc., perhaps think of those disaster survivors and to what extent you may have helped in their preparedness and recovery. Thank you for any help you give.


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