Florida’s public adjusters have taken the combat to the courthouse. In Florida Affiliation of Public Insurance coverage Adjusters and Nationwide Affiliation of Public Insurance coverage Adjusters v. Velocity Threat Underwriters, LLC, 1 a brand new lawsuit filed in Miami-Dade County’s Advanced Enterprise Division, the 2 main public adjusting associations are asking a Florida court docket to do what regulators and legislators have to date not performed and cease insurers from utilizing coverage endorsements that prohibit insureds from hiring public adjusters.
As I’ve written earlier than in Anti-Public Adjuster Endorsements: NAPIA Takes a Management Stance In opposition to the Insurance coverage Business Making an attempt to Remove Public Adjusting, and Insurance coverage Corporations Prohibited from Putting Anti-Public Adjuster Language in Property Insurance policies, this subject goes to the center of what public adjusting is about: permitting policyholders to have skilled illustration when coping with their insurers. These endorsements try to strip that immediately.
The Core of the Case
The plaintiffs, FAPIA and NAPIA, allege that Velocity Threat Underwriters, a managing normal agent (MGA) for a number of out-of-state surplus strains insurers, has been inserting an “Anti-Public Adjuster Endorsement” into its insurance policies bought in Florida.
This endorsement states that the insured “shall not rent, have interaction, retain, contract with, or in any other case make the most of the companies of a public adjuster” in reference to any coated loss. If a policyholder does rent one, Velocity allegedly refuses to cope with that adjuster, stops processing the declare, and threatens forfeiture of protection.
In impact, Velocity tells policyholders: If you happen to herald a public adjuster, we won’t discuss to them, and also you danger shedding your insurance coverage protection.
Based on the grievance, Velocity’s area adjusters are directed to not talk with public adjusters in any respect, to reject any paperwork they ship, and to droop declare dealing with till the insured offers proof that the general public adjuster has been terminated. This coercive apply, the swimsuit alleges, leaves insureds with little selection however to give up their contractual and statutory proper to skilled illustration.
Authorized Theories: Unfair Practices, Antitrust, and Public Coverage
The grievance asserts three main claims:
- Violation of the Florida Misleading and Unfair Commerce Practices Act (FDUTPA):
FAPIA and NAPIA argue that the Anti-Public Adjuster Endorsement is each misleading and unfair, deceptive policyholders into believing they’ll lose protection for hiring a licensed skilled. The associations observe that beneath Florida legislation, an insurer can’t forfeit protection for a breach of a post-loss situation until the insurer can show materials prejudice. Since a public adjuster merely performs duties the insured might carry out themselves, investigating, estimating, and negotiating the loss, there could be no such prejudice. - Declaratory Judgment:
The plaintiffs search a declaration that the endorsement is void as towards Florida public coverage, unenforceable as a post-loss situation, and invalid beneath Florida frequent legislation. They emphasize that Florida has lengthy acknowledged and controlled the general public adjusting career, which the Florida Supreme Courtroom has upheld as a reliable and constitutionally protected enterprise. Because the grievance states, the endorsement “undermines a reliable career acknowledged by statute and licensed and controlled by the State of Florida.” - Restraint of Commerce – Florida Antitrust Act (§ 542.18):
That is the place the case will get particularly important. FAPIA and NAPIA allege that Velocity has conspired with its out-of-state insurer companions, akin to Lloyd’s of London and Interstate Fireplace & Casualty, to boycott public adjusters. By agreeing to make use of the identical anti-public adjuster endorsement in all surplus strains insurance policies, they argue, Velocity and its associate insurers have created a concerted refusal to deal, a per se illegal restraint of commerce. The grievance bluntly states:
The impact of those agreements is a concerted boycott of public adjuster companies in Florida, restraining commerce, harming competitors, and inflicting ongoing, irreparable hurt.
Florida’s Lengthy-Established Public Coverage
The lawsuit takes nice pains to remind the court docket that Florida legislation and public coverage have lengthy acknowledged the legitimacy of public adjusting. The Florida Supreme Courtroom held in Larson v. Lesser (1958) that public adjusting is a “legitimate and legit occupation.” Later, in Atwater v. Kortum (2012), the court docket discovered {that a} public adjuster’s solicitation of enterprise is protected business speech.
Furthermore, Florida Administrative Code § 69B-220.201(3)(h) prohibits insurer-employed adjusters from discouraging policyholders from hiring a public adjuster. Florida Statute § 626.8796(6)(c) explicitly acknowledges an insured’s proper to make the most of a public adjuster.
By forbidding the insured from hiring one, the grievance argues, Velocity is successfully doing what Florida legislation expressly forbids insurer-side adjusters from doing.
Surplus Strains Loophole: The Unregulated Frontier
Velocity operates in Florida’s surplus strains insurance coverage market, which permits out-of-state insurers to promote insurance policies not topic to the state’s kind and charge regulation. The grievance means that Velocity is exploiting this freedom to impose phrases, such because the Anti-Public Adjuster Endorsement, that will by no means be permitted within the admitted market.
The plaintiffs contend that Velocity and its affiliated insurers are utilizing this regulatory hole to achieve an anti-competitive benefit by excluding public adjusters and controlling the whole claims course of by means of insurer-controlled adjusters.
This Is An Necessary Lawsuit
This case is about far a couple of endorsement. It represents a essential second within the ongoing battle between insurer energy and policyholder safety.
The Anti-Public Adjuster Endorsement isn’t just a contractual clause. As an alternative, it’s a direct assault on a licensed commerce and career that exists to stage the enjoying area between shoppers and insurers. Are you able to think about a medical insurance coverage that prohibited individuals from acquiring companies from a licensed physician?
If these endorsements had been allowed to face, insurers might situation protection on policyholders waiving their statutory rights, silencing the very state-licensed professionals who assist them get hold of truthful declare settlements. It could render Florida’s licensing and regulatory framework for public adjusters meaningless.
FAPIA and NAPIA’s lawsuit does one thing daring: it reframes the difficulty not merely as a client safety query, however as an antitrust violation. That is definitely a collusive scheme to get rid of competitors from licensed public adjusters and monopolize the post-loss adjustment market.
If profitable, this case might set up precedent that such anti-public adjuster provisions aren’t solely unenforceable, however unlawful restraints of commerce beneath Florida legislation.
As I’ve typically mentioned, insurance coverage is a product and trade that’s imagined to serve the general public curiosity. The insurer’s obligation is to promptly and pretty pay reliable claims, to not intimidate or isolate policyholders by slicing off their entry to skilled illustration.
When an insurer or its agent makes use of coverage language to silence the one advocate the policyholder has, it’s not simply unfair. As an alternative, it undermines the social function of insurance coverage.
FAPIA and NAPIA deserve credit score for taking management on this combat. This lawsuit isn’t just about defending a career; it’s about defending the rights of each Florida policyholder to obtain a good and sincere declare adjustment.
Thought For The Day
“Energy concedes nothing with no demand. It by no means did and it by no means will.”
— Frederick Douglass
1 Florida Affiliation of Public Insurance coverage Adjusters and Nationwide Affiliation of Public Insurance coverage Adjusters v. Velocity Threat Underwriters, No. 2025-019878-CA-01 (Fla. Cir. Ct. [Miami-Dade]).