Florida Rule Bars Altering Adjusters’ Reports Without Explanation

Almost two years after a group of independent claims adjusters alleged that insurers had deceptively altered their damage estimates and low-balled policyholders, Florida’s chief financial officer has issued an emergency rule barring similar actions in Hurricane Milton claims.

“Any move in a positive direction is a good thing,” said Mark Vinson, one of the independent adjusters who spoke at a Florida legislative hearing in late 2022.

The rule, posted in early October just as Hurricane Milton’s eyewall made landfall near Tampa, prohibits desk adjusters from modifying field adjusters’ initial damage estimates unless the revised report indicates all changes, provides a detailed explanation of why the changes were made, and identifies the desk adjuster responsible for the revisions.

Another Florida adjuster who spoke up about the alleged insurer practices said the new rule is a partial victory but more needs to be done. “I thank (CFO) Jimmy Patronis for responding to the situation, to ensure that the companies do not change estimates or reduce prices that they’re not entitled to,” said independent adjuster Ben Mandell. “But we still would like them to move as fast to arrest the people that were responsible.”

The adjusters, all hired by insurance companies after Hurricane Ian hit Florida in 2022, have complained that after they turned in their inspection reports to claims management firms, the insurers made wholesale changes, reducing repair cost estimates by as much as 98% without a second inspection and without consulting with the field adjusters. All the while, the revised estimates that were sent to the insureds kept the field adjusters’ names and license numbers on there in a way that made it appear that they had endorsed the lower cost total, the adjusters said.

That prompted multiple, angry homeowners to blame the field adjusters.

The emergency rule came less than two weeks after CBS News’ “60 Minutes” aired a segment on the adjusters’ allegations.

The head of one Florida insurer, Heritage Property & Casualty Insurance, blamed the altered reports on software that failed to show desk adjusters’ names. CEO Ernie Garateix also said that while some adjusters’ reports were revised downward, many other estimates were increased, benefitting insureds.

Patronis’ emergency rule should make a difference, adjusters said. But it also contains a requirement that Vinson and Mandell warned could limit their ability to provide accurate price estimates in some cases. The rule notes that adjusters must use an electronic estimating program that is updated at least once a month. Not all estimating software is updated monthly, Mandell said.

Under the new rule, adjusters cannot tweak Xactimate prices. For example, Xactimate calculates roof replacement at a lower rate because it is based on a low hourly wage for roof demolition, or removal of old shingles. But in reality, most roof demolition work is done by a roofing crew, who are usually paid at a higher hourly wage than are general laborers/demolition workers, Mandell argued.