The difficulty raised on this title often arises with policyholders not eager to pay a public adjuster payment as a result of the general public adjuster service contract was not legitimate or the general public adjuster’s license lapsed someday through the contract. MAPFRE Insurance coverage Firm has filed a captivating grievance 1 towards an allegedly unlicensed public adjuster license and firm that highlights severe points to which in any other case licensed public adjusters ought to concentrate. The lawsuit filed within the Puerto Rico federal court docket targets Edward C. Reynolds, 411 Claims PR LLC, and 411 Claims LLC for allegedly working with out correct licensing whereas dealing with Hurricane María claims.
On the coronary heart of this case is MAPFRE’s assertion that Reynolds and his firms fraudulently represented themselves as licensed public adjusters whereas dealing with a major declare for the Puerto Rico Freeway and Transportation Authority. The grievance alleges that Reynolds, who had his insurance coverage adjuster license completely revoked in Massachusetts, continued to function with out correct licensing in Puerto Rico.
The dispute facilities round a Hurricane María declare filed by the Freeway Authority, which MAPFRE insured below a industrial coverage. In keeping with the grievance, Reynolds and his firms submitted claims totaling roughly $180 million, pushing for the coverage limits of $47,934,332, whereas MAPFRE’s investigation decided damages of solely $3,307,259.171
After 4 years of litigation, the Freeway Authority in the end settled with MAPFRE for $10,250,000 in November 2023, considerably lower than the quantities initially demanded by Reynolds and his firms. This substantial disparity between the settled quantity and the preliminary declare raises severe questions concerning the declare preparation course of.
The grievance notes that on July 21, 2023, the Puerto Rico Insurance coverage Commissioner sanctioned Reynolds and 411 Claims PR LLC for fraudulently misrepresenting their licensing standing. The Commissioner additionally took the numerous step of prohibiting Reynolds from performing any insurance coverage adjuster-related work in Puerto Rico. MAPFRE is searching for not less than $800,000 in compensatory damages, together with legal professional charges, knowledgeable charges, adjustment investigation bills, and prices. The insurer argues these bills had been unnecessarily incurred because of the defendant’s negligent misrepresentations and unlicensed follow.
As I learn the pleadings, evidently this case serves as a reminder of the significance of correct licensing and moral conduct in public adjusting. It additionally highlights the numerous prices that may be incurred when claims will not be correctly adjusted in keeping with coverage phrases, situations, and exclusions. The grievance alleges that the defendants submitted inflated claims with out correct investigation, together with claims for pre-existing harm, which in the end led to pointless litigation and bills.
A part of the allegations famous:
5.6 Every motion, communication, data and illustration taken by the defendants to MAPFRE was unlawful because it was made by means of Edward C. Reynolds and/or 411 Claims PR LLC as unlicensed adjusters, with the information and live performance of 411 Claims LLC.
5.7 411 Claims LLC knew, or ought to have recognized, that Edward C. Reynolds and 411 Claims PR LLC didn’t have a public adjuster license and will have stopped their actions.
5.8 The contracts executed between the Freeway and Authority and the defendants are null and void. Such null and void contracts, in flip, brought about damages to MAPFRE as a result of MAPFRE needed to incur in pointless time and expense litigating claims that had been illegally labored by the defendants and with out making a correct adjustment below the phrases, situations, and exclusions of the insurance coverage coverage.
All complaints have allegations which can or will not be true. Nonetheless, many complaints have classes others can study from, whatever the veracity of the allegations.
On this case, all public adjusters ought to make sure that they’re correctly licensed within the state by which they’re doing enterprise. The license ought to by no means lapse, nor ought to public adjuster appointments lapse for some administrative motive. Second, the contracts should be legitimate and totally adjust to all state codes and insurance coverage division laws. If both the primary or the second factors will not be met, this distinctive grievance means that insurance coverage firms, in addition to policyholders, could increase these points. Clearly, opinions and statements of loss should be made in good religion and with some assist somewhat than being fraudulent.
I’ve raised this challenge of public adjusters needing to examine on the preciseness of their contracts in Public Adjuster Warning—Do Not Make Unlawful Contracts. Once more, what makes this case fascinating is that it’s the insurance coverage firm elevating these points somewhat than the policyholder.
For public adjusters training in several jurisdictions, I ask you this query: Are you constructive that your contracts and licensing comply completely with all laws? Except you might be sure, please take the time to double-check.
Thought For The Day
“No man is above the regulation, and no man is under it; nor can we ask any man’s permission after we require him to obey it.”
—Theodore Roosevelt
1 MAPFRE PRAICO Ins. Co. v. Reynolds, et al., No. 3:24-cv-01557 [Doc 1] (D. P.R.).
