Florida's chief financial officer, Tom Gallagher, announced that he had issued an emergency ruling capping public adjuster fees at 10 percent out of concern they might be subjecting Hurricane Katrina damage claimants to "price gouging."
He said that in addition to limiting fees, the rule contains other consumer protections for storm victims who may consider contracting with public adjusters==those who represent policyholders to secure a settlement with their insurers, for a fee.
Mr. Gallagher's announcement said he found a need to impose the rules in the wake of last year's experience when Hurricane Charley hit in August and there were reports of adjusters demanding fees of up to 25 percent.
"Floridians upset after seeing their property damaged by Hurricane Katrina can be particularly vulnerable to signing contracts that are unfair and possibly unnecessary," he said. "They need to strongly consider whether they need the assistance of a public adjuster, as any fees will inevitably come out of their claim settlement."
The new rule, in addition to capping adjuster fees at 10 percent of the claim payment, gives the consumer 14 days to cancel a contract made with a public adjuster without penalty, and prohibits public adjusters from demanding any up-front payments or compensation prior to final settlement of the claim.
Mr. Gallagher cautioned that residents should make sure they are dealing with a licensed public adjuster, noting that the Division of Insurance Fraud had arrested seven individuals last year for acting as public adjusters without a license.
To check on the license status of an adjuster, agent or company, consumers can visit www.fldfs.com, and click on Verify Before You Buy, or call the Department of Financial Services' Helpline at 1-800-342-2762.
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