Ethics and Unfair Trade Practices
The Unfair Insurance Trade Practices Act
Florida Statutes Part IX of Chapter 626 prohibits misrepresentation of policy terms, false advertising, boycott and coercion, unfair discrimination, rebating (offering anything of value not stated in the policy as an inducement), twisting (misrepresenting to induce a replacement), and unauthorized insurance activity. Violations carry administrative fines, suspension or revocation, restitution, and possible criminal referral.
Unfair claim settlement practices
The adjuster-specific list includes misrepresenting policy provisions, failing to acknowledge or act promptly on communications, failing to adopt and follow reasonable claim standards, refusing to pay without a reasonable investigation, failing to explain a denial, offering substantially less than the claim is worth, threatening the insured, and failing to maintain complaint records. After a civil remedy notice under statute 624.155, the insurer has 60 days to cure before a bad-faith action can proceed.
Ethics in practice
An adjuster owes honesty, confidentiality, and loyalty to the appointing insurer, and fair dealing to the claimant. Disclose conflicts (a relative's claim, a repair shop you own), never pay or accept referral fees, never settle above your authority, and never let a contractor or public adjuster direct your inspection.
Traps
- An offer lower than the damages is not automatically bad faith, but a low offer with no investigation is.
- Rebating is illegal in Florida even when the customer asks for it.
- Playing both sides of a claim, or accepting a fee from a vendor for referrals, is a licensing violation.
Rule of thumb
Before any payment or denial, ask whether you can defend the decision with the policy language, the documented file, and a reasonable investigation.