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Where do I even begin?  Sometimes there is so much wrong you don't know where to begin setting it right.

Unethical?   Duh!

Working as an IA and an unlicensed public adjuster at the same time?  Are you really asking if this is unethical or is that just a rhetorical question?

Helping insureds get paid $65,000 for a $5,000 claim?  What could possibly be considered honest about that?

Like I said, where do I even begin?

Couldn't have said it better myself Steve. I mean seriously, do people actually think about stuff before they post it? Makes we really wonder about some of the people that are in this business.

I think this is more common than some realize. Playing both sides of the fence that is. Is there really anyone on the payroll to police this industry or is it each for himself for the most part? I still say until there is adjuster licensing by peers and enforcement with teeth only more of the same can be expected. Who would one report ethical issues to and would that body (if it exist) even care to set up a hearing of the charges made? The plumbers can’t get away with this or the MD’s due to peer reviews but adjusters do not have such a licenses process and professional control from what I can tell.  

It all depends on how much involvement the 'newbie estimator' had in the adjustment process. If all he did was scope and create an estimate then I don't believe there is anything against the law or unethical with that. He does not even need to be licensed in any way shape or form for that. There is a potential problem when this estimator meets with the carrier IA. If he is simply explaining his reasoning for his scope then no problem but if he is negotiating in any way or applying policy language then he is working as an unlicensed adjuster which of course is against the law. The dollar amount has no bearing on the posters question. $1.00 or $50,000.00 does not matter if this type of arrangement is legal or ethical. Many team adjusters work in this same manner. One member has the license and applies to all the IA companies and a unlicensed partner, significant other or what have you do 75% of the work. Most notably the estimating portion. To solve the original posters issue the 'newbie estimator' should just apply for a public adjuster license and set out on his own.  Is the eperienced licensed adjuster in the posters scenario walking a thin ethical line, yes.  But I don't believe that line has been crossed legaly or otherwise with the given information.  Any adjuster can have anyone he/she wants create a scope and estimate.

If someone portrays him or her self as an adjuster/estimator and submits an estimate ($65,000.00 in "damages" for a $5,000.00 initial claim settlement) telling the homeowner this is the "damage" for your claim, in many states, if not all 50, you are interpeting policy coverages limitations and exclusions.  In other words, you are interpeting contract law.  You must be either licensed for it or working under someone else's license (who would be utimately responsible for the actions of the "estimator/adjuster".

If you are not working for the insurance carrier or IA firm, you are a PUBLIC ADJUSTER and need to be LICENSED or you can be put in jail and/or fined.  I had one of these "claims consultants" approach me for a bogus supplement after Hurricane Hugo in South Carolina in 1989.  Back then you had to be a lawyer back then to be a public adjuster (it may have changed since then).  I am not sure what ever happened to him after I contacted the state Department of Insurance and the State Bar Association.  All I know is he went away.

Over the years I have had several direct repair contractors try to do the same thing in order to impress homeowners and get the repair work.  They went away, too.  The tatic of inflating estimates may work when a newbie adjuster is representing the company but not when a trained and knowledgeable adjuster is controlling the loss and standing guard over the coffers.

Get a license.  Do it right.  Make an honest living.  Sleep better at night.

Does anyone  notice, without considering the veracity of the original posting, that the original estimates appear to be so low they can be increased on settlement several times.  Also, it states that the "adjuster" in charge is working for the same vendor that provided the original estimate. This whole story smells worse then Lakeview in Oct 2005.

I, like John, ran into this situation on one very large loss in Orlando. This contractor was from out of state, did not have a contractors, nor adjusters license in Florida and was trying to create a 2 million dollar loss out of a $850,000.00 loss. I video taped the roof, and some interior rooms, while this person was commenting on coverage and damage, including BI that was to be owed. I sent a copy of the video to the company I represented and they in turn sent it to the Florida Insurance Dept. The man disappeared soon after that.

The below scenario does not even warrant comment due to its unethical, and illegal posture.

According the original poster, the newbie took original damage estimates of around $5K and re-wrote new estimates of up to $65K.  And most times the homeowner got that amount and was extremely happy.  One of three things happened here....either the original adjuster/estimator was incompetent, or the file examiner in the home office was.  Last, if this was with the same carrier, how many of them took their cut?  The whole scenario smells if this in fact happened on a regular basis and involved the same IA.  If there was any collusion involved, apparently the "trainee" estimator was left out otherwise this story wouldn't have been told.  Loss amount discrepancies like this generally invite scrutiny by the home office if the number of claims mentioned is accurate.

Its been my experience in life and in business that if you have to ask if its unethical, then it usually is. 

Fear and greed seems to be the credo of american thought processes nowadays. I refuse to accept that credo. If I cannot be ethical and fearless, then I don't need to exist. Yes, our government is totally out of control and our industry is in bad shape. Only citizens can change the way politics has played out to date. Yes, big business is only concerned about big business and yes, they control our government, whether we believe it or not. I despise tags, that being liberals, conservatives, right wing, left wing, etc. Why can we not just  be people, americans for a better country. Why do we have to be liberals, conservatives, etc., makes no sense to me. We should all have a common goal to make our lives full and wonderful and to love our neighbors. We are out of control and that is all there is to that.

Folks - There was no representation of being a PA going on - just private estimates. The boss IA never did any of them for a client that he was also handling a claim for, but he would do them for a customer who may happen to have the same claim outfit that he also did work for. The customers called him for an impartial estimate done by people who were very familiar with damage repair costs. Since he was also an IA who was handling claims at the same time is where the conflict question I originally posed comes from. No collusion or any type of underhanded tactics were done. The insured just decided to hire a sheep dog to check out what the wolf was doing at the hen house. All the newbie did was provide honest and accurate estimates. All were done in X-mate and plain as day for anyone to read. They were paid because they were examined by professionals and found to be more accurate. Many times the newbie had to meet with the adjuster and explain why and how. Nothing was hidden or done under cover. The damage was what it was and the repair estimate reflects that. That is not where the honesty/ethics question originates. The dual role of the boss IA was the ethics question and whether the newbie has poisoned himself to the adjusting/claims co. community by having his name on those estimates.

The $5-65K was just the most extreme example. Not all were that much, but all did attain many K's more than the settlement offer. There was no "taking the adjusters estimate" and turning it into something fraudulent. There was simply an impartial opinion given.

When you think about it, isn't it like the adversarial roles of the prosecutor versus defence attorney - next week they may switch places, but the mission is to achieve justice? (coughcoughcough).

Who is your principal ? The title of an Independant Insurance Adjuster common language meaning is; a trained person who is not an employee of an insurance company but works for more than one carrier and committed to one{at a time}. If a conflict come up you must inform your principal who can remove or retain you , but you can not serve two masters.

The principal is the person you owe the highest duty to as your fee is paid by this person. If a vendor is involved the same duty flows both ways.An ethical IA firm will turn down the first and third party claims arrising out of the same accident .

ie: A store in a shopping center has a large fire loss to its stock and improvements. Some negligence on the C & O of this fire. The  carrier for the store next door hires the same IA firm to work the property loss and also do the subrogation investigation. Big conflict, the assigment that comes in second must be turned down.

As an IA you can not work for Insurance carriers and the general public at the same time; unless you are appointed by either in the appraisal provisions (impartial) The first challange against any appraiser is; How much of your annual income in the last five years has come from this carrier/ law firm-PA firm.

If I was investigationg for this carrier I would go after the boss IA and I would find a LARGE conflict.

I would consider him working as a Public Adjuster and that would be illegal.

Meg is right. If you have to ask, then it isn't ethical or legal.

I'm having a hard time seeing how you can turn a 5k claim in 65k. Just doesn't sound right. Sounds like there is more collusion going on.

Speaking of unethical when I was going to one of the adjusting schools there was a guy bragging about his brother.

Apparently his brother is an adjuster in Florida. He writes the estimate and then has his own roofing company do the job. Not sure if he is that stupid that he thinks it is ok, or his brother was just trying to impress me in some idiotic manner.

I'm glad you weighed in on this, William.

I had a feeling that other public adjusters might understand the practices outlined in the original post to be reprehensible.  I was going to say so in my last post, but thought it might be hubris for me to speak on behalf of public adjusters.