Insurance Journal, William Rabb, March 4, 2022
After several months of investigation, Florida regulators have filed an official action against a public adjuster that insurance companies had complained about, a move that could soon lead to the suspension of his license and fines of several thousand dollars.
The Florida Department of Financial Services on Wednesday lodged the administrative complaint against Scott David Thomas, an all-lines adjuster based in Weston, near Miami. The document alleges that Thomas, president of Indemnity Public Adjusters, repeatedly stonewalled insurance company adjusters, appraisers and engineers, and attempted to block access to properties when the insurers tried to inspect after claims were filed.
Thomas “is hereby notified that the Chief Financial Officer intends to enter an order imposing such penalties as may be provided under the provisions” of state law, reads the 36-page complaint.
Statutes outlined in the complaint show that Thomas could have his adjuster’s license suspended, revoked or non-renewed, and could face fines of $5,000 for each violation of the adjusters’ code of ethics. Thomas now has 21 days to request a proceeding to contest the allegations, the DFS document notes.
If he does not respond, “a final order of suspension or revocation will be entered against you,” the complaint reads.
Thomas could not be reached for comment Thursday.
The Thomas complaint appears to be one of the few official actions taken by DFS against adjusters in the past several months, despite allegations from insurers that bad practices are escalating losses and adjustment expenses.
Insurance companies have argued that some adjusters have fraudulently jacked up the extent of damage in claims and have gone to great lengths to thwart insurers’ own inspections. Others have charged that some adjusters have conflicts of interest and have ownership in or have family members who own construction companies that get most of the restoration work recommended by the public adjusters.
Last summer, Universal Property & Casualty Insurance Co. asked DFS for a declaratory statement on the legality of adjusters having interest in restoration firms, naming three adjusters with apparent conflicts.
Universal surprised some in the Florida insurance community when it withdrew its petition in September, saying it would pursue the matter through other avenues. A week later, DFS dismissed a court petition against another adjuster firm, Contender Claims, and the notorious Strems law firm. The petition alleged that Contender may have used unlicensed adjusters.
Contender’s principals refused to comply with subpoenas issued by DFS seeking company records. A court upheld the department on the subpoenas, but the department later notified the court that it had voluntarily dismissed its petition. DFS did not explain why it dismissed the petition.
The licenses for the Contender and Strems public adjusters that were named in the DFS court papers remain active and valid, the DFS website showed Thursday.
On the Scott Thomas investigation, the Insurance Journal filed an open records request with the DFS in early November, but no documents or information have been produced. A spokesman for DFS said this week that the request is still being processed.
The complaint against Thomas gives eight examples of the tactics the adjuster allegedly used to block insurers and appraisers’ efforts to inspect properties, or which violated rules and statutes in other ways. In some instances, Thomas became belligerent and disparaging toward the insurers’ adjusters, refused to answer questions and directed questions to the homeowner’s attorney.
In other cases, Thomas demanded proof of the insurance adjusters’ liability insurance or workers’ compensation insurance before he would grant access to the property. He also demanded resumes and documentation to show if the insurers’ experts had any conflicts of interest. In a few cases, Thomas made it difficult for the insurers to schedule a time, or changed the available times, or would agree to inspections only on Saturdays, outside Citizens Property Insurance Corporation’s working hours, the complaint notes.
All of those tactics ran afoul of the law, DFS said.
“Section 626.854(14)(b), Florida Statutes … provides that a public adjuster may not restrict or prevent an insurer, company employee adjuster, independent adjuster, attorney, investigator, or other person acting on behalf of the insurer from having reasonable access at reasonable times to any insured or claimant or to the insured property that is the subject of a claim,” the DFS document reads.
In one case, Thomas accused Citizens of acting in bad faith.
He wrote: “I mean the fact that three separate letters were sent to my client on 3 May 2019 ( only two of which that could be read) is just an example of what appears to be a clear act of Bad Faith Claims Handling on the carriers part (sic),” the complaint said, quoting from correspondence from Thomas.
In at least one instance, Thomas requested a criminal background check on Citizens’ adjusters.
“Frankly speaking, I think it essential to know that the person entering my client’s home is not only a threat to my client or their family but also, that he or she is competent to act in the capacity as a claims adjuster in the State of Florida,” Thomas wrote in an email to a Citizens adjuster.
In one claim filed with Tower Hill Insurance, Thomas provided a compact disk that he said contained more than 100 photos of the damage to a property. But a Tower Hill attorney said the disk contained no photos but included the film, “Hotel Transylvania.”