This is of concern to you as a homeowner and as for us on a contractor. We are not a public adjuster and can only help you with so much. Typically an adjuster will talk with us to make sure your claim is being covered correctly. On rare occasions they will only want to work with you. In those cases we can advise you on our professional opinion, we personally feel this can leave you on an island somewhat by yourself not knowing anything of the industry and standard practices. Although we also understand the reasoning behind the intent of the ruling was to protect the homeowner(s) and the insurance companies from fraud and bad practices it did have some unintended consequences. Public adjusters are sometimes needed and have varying costs associated with their services but typically it is 10% of the job, Below we have the ruling from the State of Minnesota. Please feel free to give us a call on any questions – 763-439-2513
In response to concerns from the insurance industry, the Minnesota Department of Commerce, in conjunction with DLI, issued a joint bulletin Sept. 17, 2010, that warns roofing contractors they may be violating state law by acting as public insurance adjusters.
When soliciting work after storms, many roofing contractors present homeowners with a proposal known as a “price-agreeable contract.” Those contracts became popular among insurance restoration contractors in Minnesota following intense hailstorms in 1998. They state that the homeowner agrees to allow the contractor to perform whatever repair work the homeowner’s insurance company agrees to cover, for the price that the insurer agrees to pay for the repairs. Most of these contracts also have a provision calling for the cancellation of the contract if no agreement can be reached between the contractor and insurer.
While CCLD does not object to the price-agreeable contract in principle, the way it is presented to the homeowner can cause concern. CCLD hears many complaints from homeowners who claim the contractor failed to tell them the document they were asked to sign is a contract; they were led to believe it was merely an authorization for the contractor to examine the homeowner’s roof or to talk to their insurance company. CCLD has taken enforcement action against several contractors for these types of misrepresentations.
The concern addressed by the joint bulletin relates to how contractors interact with homeowners’ insurance companies. In some cases, CCLD and the Department of Commerce have noticed contractors who advertise or otherwise claim to act as the homeowner’s representative in negotiating a claim with the insurer. This can be construed as the services of a public adjuster – someone who, for a fee, negotiates a claim settlement on a homeowner’s behalf.
Public adjusters are required to be licensed by the Department of Commerce. Its staff warn that enforcement action against contractors who cross the line between contracting and public adjusting will be taken and some contractors are already under investigation.
The determination about whether a contractor is acting as a public adjuster is made by the Department of Commerce only. CCLD advises licensed contractors to be sure they stick to discussing with insurance adjusters only the scope of damage to a homeowner’s property and the fee the contractor seeks for the required repair work.
Contractors should avoid making statements, verbally or in their advertisements or contracts, that they will act as a homeowner’s “representative” or “agent” in negotiating with an insurer.
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