From The Advocate ---
If a policyholder feels like they're getting shortchanged by their property insurer, one option is to hire a public adjuster to conduct an independent damage assessment to determine whether the insurers' estimates are accurate.
But unlike the 45 other states that license public adjusters, Louisiana is the only one that bars public adjusters from working for consumers on a contingency basis. Instead, policyholders can only hire public adjusters in Louisiana for a flat fee or hourly rate.
Senate Bill 186, sponsored by state Sen. Cameron Henry, R-Metairie, would bring Louisiana in line with the rest of the nation and allow public adjusters to charge a "percentage fee" worth up to 10% of whatever settlement they help a policyholder secure.
The measure advanced out of the Senate Insurance Committee on Wednesday. It next heads to the Senate floor for debate.
Supporters say the existing payment structure disadvantages policyholders who might not have the resources on-hand to pay a public adjuster an hourly rate or flat fee out-of-pocket.
"This is an opportunity for your constituents to have a choice," said Clay Morrison, incoming president of the National Association of Public Insurance Adjusters. "They can still hire somebody by the hour if they want go get help that way, but they now have a choice to hire on a percentage basis."
Unlike claims adjusters sent out by insurance companies, public adjusters work directly for policyholders. They document damage and turn over their estimate to the policyholder to release to their insurance company.
Louisiana began licensing public adjusters after hurricanes Katrina and Rita. At the time, the only way to get licensing through the Legislature was to ban public adjusters from charging contingency fees, according to Brian Goodman, general counsel at the NAPIA.
"There's this antiquated notion that what we do is the unauthorized practice of law," Goodman said. "So, the only way we could get licensing is to agree that we wouldn't charge percentage fees."
Among the 45 states that allow public adjusters to charge contingency fees, 11 have caps on the percentage that can be charged. Henry's proposal would cap that rate at 10% of the unpaid claim recovered.
The proposal faced opposition in committee from Jimmy Ordeneaux, a lobbyist with Louisiana Farm Bureau Insurance, who said the percentage fee will encourage public adjusters to write larger estimates to inflate their payouts.
"There's an incentive imbalance," Ordeneaux said. "If the incentive is, 'The higher the recovery the more I get paid,' there will be people who take that and write high estimates."
Ordeneaux recommended lawmakers water down the bill and instead pass a resolution to study how to "put this in responsibly."
State Sen. Robert Mills, R-Minden, said he "loved the idea of giving property owners an extra layer of help" but worried about making a "big change in this area so close to storm season," calling the study resolution a good idea.
But other lawmakers rejected the idea. State Sen. Katrina Jackson, D-Monroe, said if 45 other states allow for percentage fees, there's no need to study the proposal. The measure ultimately advanced without opposition.
"I think the fact that insurance companies don’t want your constituents to have another option to get money from their insurance companies is a little disheartening," Henry said.
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