(TRENTON) – Legislation sponsored by Assembly Speaker Pro Tempore Jerry Green and Assemblywoman Linda Stender to cap how much a public adjuster can charge a homeowner for insurance claim assistance for certain emergencies was approved Thursday by an Assembly panel.
Green decided to pursue the bill after hearing complaints during a meeting in Union County last year from homeowners affected by Sandy who were overcharged by public adjusters hired to appraise their insurance claims. Public adjusters are experts on property loss adjustment who are retained exclusively by policyholders to assist in preparing, filing and adjusting insurance claims.
“Public adjusters are supposed to look out for the best interests of the homeowner, but according to these residents, some of these adjusters were charging up to 40 to 50 percent of what the insurance company was to pay eventually. This is a crime. A loan shark doesn’t even charge that much,” said Green (D-Union/Middlesex/Somerset). “There is nothing currently in the books to prevent these individuals from taking advantage of these homeowners. This bill changes that.”
“The damage caused by a natural disaster can be devastating. Navigating the system as you try to rebuild can be equally consuming. The last thing a homeowner affected by Sandy or any other natural disaster needs is a public adjuster who is more interested in making money than helping,” said Stender (D-Middlesex/Somerset/Union). “This bill will limit the amount that a public adjuster can charge a homeowner when settling insurance claims following a catastrophic loss occurrence.”
The bill would prohibit an individual, firm, association or corporation licensed under the “Public Adjusters’ Licensing Act” from charging, agreeing to or accepting any compensation in excess of 10 percent of the amount paid out by the insurer for claims based on events that are the result of a catastrophic loss occurrence. As defined in the bill, “catastrophic loss occurrence” means an occurrence designated by the President of the United States or the Federal Emergency Management Agency, or the Governor or the State Office of Emergency Management in the Division of State Police in the Department of Law and Public Safety, or any other authorized federal, state or local agency, as an emergency or a disaster and includes, but is not limited to, a flood, hurricane, storm or earthquake.
The compensation level established by the bill would apply to such claims made for a period of one year from the occasion of the declaration of the catastrophic loss occurrence.
The bill was released by the Assembly Financial Institution and Insurance.