July 20, 2011

Joplin consumers: Beware of offers to negotiate your insurance claim

Residents with tornado damage being solicited by unlicensed companies

Jefferson City, Mo. - The Missouri Department of Insurance is warning Joplin-area residents they may be approached by companies illegally offering to negotiate their insurance claims for them. To represent a consumer in negotiations with an insurance company, an individual must have a license as a public adjuster with the Department of Insurance.

Consumers who are having challenges with their homeowners insurance claims may be vulnerable to companies that are unscrupulous or operating illegally in the state. These companies may call themselves insurance claims specialists or say they can get a home rebuilt better than before at no charge to the homeowner.

Missouri's insurance director says many of these offers are too good to be true. He says charitable and religious organizations may inadvertently endorse an unlicensed public adjuster because they're not familiar with Missouri's licensing requirement.

"Policyholders should first try to resolve differences directly with their insurance company," said John M. Huff, director of the Missouri Department of Insurance. "If they reach an impasse, they can file a complaint with our department - our services come free of charge."

The department recently announced that it helped recover more than $5 million for consumers who had filed complaints against their insurance companies in the first half of 2011.

Consumers who choose to use the services of a licensed public adjuster will likely have to pay a commission on the eventual claim payment.

Huff says before selecting a public adjuster to represent them, consumers should contact the department to verify that the individual is properly licensed by the state.

Gov. Jay Nixon has issued an executive order setting strict limitations on the activities of public adjusters working with insurance policyholders in Joplin. Under the order, public adjusters working in Jasper and Newton counties must:

  • Show proof of state license to prospective customers;
  • Not require payment in advance for representation;
  • Not charge a fee of more than 5 percent of the insurance claim payment; and
  • Offer consumers 14 days to cancel a contract.

The Department of Insurance says consumers should exercise extreme caution before signing a contract with a public adjuster. Consumers with questions or complaints can call the Insurance Consumer Hotline at 800-726-7390 or visit insurance.mo.gov.