The Claims Adjuster’s Code of Ethics
Being an insurance adjuster comes with several ethical obligations. The work of being an adjuster is deemed to be a public service, and because of the potential for abuse associated with this profession, the Florida legislature has set in place several ethical rules to protect the public. These rules are couched in the Florida Administrative Code, and can be easily accessed online. This article will highlight some of the most important points in this section of the administrative code, and provide a summary of an adjuster’s responsibilities under these rules.
In essence, the adjuster’s code of ethics provides strict guidelines that apply indiscriminately to all adjusters in Florida, including public adjusters, independent adjusters, and insurance company adjusters. Since many of these ethical violations may go unreported – and even unnoticed by the insured – the code imposes, among other things, a duty on all adjusters to report known violations of these rules. The failure to report a known violation is, in and of itself, a violation of the ethical rules that can lead to serious sanctions.
Duties & Obligations Under the Rules
Similar to the fiduciary duty rules imposed on other public trust professions, such as lawyers and accountants, the Adjuster’s Code of Ethics provides that an adjuster be fair and honest with claimants, and must put the claimant’s interests above their own. Additionally, the rules state that an adjuster cannot steer a claimant needing some service to a person with whom the adjuster has some undisclosed financial interest. In essence, these rules impose a type of duty of loyalty. It is not uncommon for an adjuster to have conflicting interests when resolving a claim. A conflict can be even more pronounced for adjusters that either work for an insurance company (the so-called “insurance company adjuster”), or adjusters that have been temporarily retained by an insurance company to assist in the resolution of a claim (the so-called “independent adjuster”). Nevertheless, the code is unambiguous: the duty to be fair and honest, and to refrain from undisclosed self-dealing is strictly prohibited.
Akin to the Duty of Care imposed on other public service professions, the Adjuster’s Code of Ethics provides that an adjuster must refrain from adjusting a claim if the adjuster lacks knowledge of the claimant’s coverage and competence. Given that an adjuster is expected to resolve claims in accordance with the insured’s coverage, this rule should not be overlooked. If an adjuster is attempting to adjust a claim without knowing the specifications of the insured’s policy, then how can the insured expect a fair resolution of their claim? An adjuster that undertakes a claim without being knowledgeable and competent of the insured’s coverage has breached this duty, and can be harshly penalized for doing so. Be wary of adjusters that provide fast, lowball estimates for your claim. Every claim is different, and your coverage may be more inclusive than what your insurer wants to cover. Ask the adjuster questions about your specific policy, and have them explain how they reached their conclusions. By putting the adjuster on the spot, you may unearth indicia of an adjuster’s lack of knowledge or competence on your specific policy or claim.
A common tactic among adjusters is to delay the claim for as long as possible, in hopes that by the time you are offered a settlement you will be willing to accept a much lower number than that which you may have been willing to accept had they resolved your claim quicker. Don’t be fooled by these tactics and don’t accept a settlement simply because you need the money now. The rules specifically state that an adjuster must act with dispatch and diligence in achieving a proper resolution of your claim. When an adjuster has intentionally undertaken to delay your claim, for whatever reason, they have breached their ethical obligations and should be sanctioned for their actions.
The Florida legislature recognized that certain traumatic events can result in persons being more willing to accept settlement offers during or immediately after the occurrence of a stressful event. Moreover, the Florida legislature recognized that the elderly are more likely to fall victim to unscrupulous adjuster tactics. To this end, the Adjuster’s Code of Ethics seeks to protect the public by imposing explicit rules designed to reduce the risk of abuse. Moreover, the rules provide that an adjuster must exercise “extraordinary care” when dealing with elderly clients to ensure that these persons do not fall prey to abusive insurance tactics. Again, any deviation from these rules can result in severe sanctions.
Other rules require an adjuster to refrain from advising claimants not to seek counsel, and to give at least a 48 hour notice to the claimant that the adjuster will be coming to inspect the damages. Another seemingly catchall provision prohibits adjusters from approaching investigations, adjustments, and settlements by means that would be prejudicial to the insured.
What Can You Do About an Ethical Violation?
The penalties for violating the rules are harsh, and can result in suspension or even loss of license. You should not be afraid to report an incident if you believe your adjuster has unethically handled your claim. You may reach out to organizations like the Florida Association of Public Insurance Adjusters, or report directly to the Florida Department of Financial Services. You can also seek legal advice on any matter pertaining to your claim.
You can reach Miami Insurance Claims Lawyer J.P. Gonzalez-Sirgo by dialing his direct number at (786) 272-5841, calling the main office at (305) 461-1095, or Toll Free at 1 (866) 71-CLAIM or email Attorney Gonzalez-Sirgo directly at [email protected].
FL. Admin. Code – Rule: 69B-220.201