They say you should save the best for last. So, Steve Badger, Rene Sigman, and yours truly are making the last presentation at the Texas Association of Public Insurance Adjusters Spring Conference on March 2 in Austin, Texas. Given our preparation, the title seems appropriate, Three for One & One for All! A Lively Discussion of Hot Topics In Texas Claims & Litigation. 

One of the hot topics of this discussion will be a significant Order by the Texas Insurance Commissioner that is not going to please many Texas public adjusters. The Order seems to indicate—Badger claims it is clear—that the total amount which can be charged is 10% of any adjusted amount and not an amount that totals 10% or less of the total settlement amount. Here is what the relevant portion of the Order states:

2. Kueng indicated to the department that he would utilize the standard FIN535 contract provided by the department which explicitly states the fee is not to exceed 10 percent of the amount collected or adjusted.

3. The department received a complaint from J.O., a PIA client of Kueng’s whose roof needed repair. The complaint alleged that Kueng had told J.O. that he would not take any commission on the funds already received from the insurance company. The complaint further alleged that Kueng was charging J.O. 15 percent of the full amount of the settlement claim.

4. After an investigation, the department determined that Kueng had charged 3 clients a fee of 15 percent of the amount collected or adjusted in violation of the maximum 10 percent.

5. Kueng inserted additional language into the FIN535 contract provided by the department when working with these three clients. The altered contract stated that his fee would be ‘15% of new money’ in violation of the statute and deviating from the approved contract.

6. The addition of the language ‘15% of new money’ resulted in Kueng receiving approximately $2,865 in excessive commissions from 3 consumers.

From Badger’s view, the Department of Insurance seems to indicate that the FIN535 contract does not allow charging a higher percentage amount greater than the ten percent for any amount adjusted or recovered during the pendency of the public adjuster’s contract. That is how I read the Order as well. This is shocking to many public adjusters who regularly charge 25% on “new money not to exceed 10% of the total recovery.” 

What is confusing is that I know TAPIA’s lobbyist and officers have had discussions and agreements with the Texas Department of Insurance to the opposite of this Order. This is a pretty important difference of opinion which will be up for discussion next week. 

From a practical standpoint and speaking as a lawyer, this issue needs to be clarified one way or the other. Rules should be clear so people can understand if they are breaking the law. 

Here is the link for registering for TAPIA’s 2023 Spring Conference. Hope to see you there. 

Thought For The Day

The beauty is that through disappointment you can gain clarity, and with clarity comes conviction and true originality.

—Conan O’Brien