The District Court of Appeal of Florida ruled that public adjusters cannot serve as disinterested appraisers in insurance claims if they have a financial stake in the outcome. This decision affects policyholders like Jon Parrish, who filed a claim with State Farm Florida Insurance Company for damage from Hurricane Irma.

The court's ruling came after a dispute arose between Parrish and State Farm over the selection of an appraiser. The ruling is significant because it clarifies the definition of a "disinterested appraiser" in insurance policies, impacting how claims are handled across Florida.

Background

In 2017, Jon Parrish submitted a claim to State Farm for damage to his home caused by Hurricane Irma. He hired Keys Claims Consultants, Inc. (KCC) to assist with his claim. KCC's role included preparing a detailed accounting of the damages and negotiating with State Farm on Parrish's behalf. Under their agreement, KCC would receive ten percent of any insurance funds Parrish received.

After submitting a sworn statement valuing his loss at $495,079.25, Parrish's public adjuster, Bobby Sims, requested that any dispute regarding the amount be settled through appraisal, as allowed by the insurance policy. However, State Farm objected to KCC's designation of George Keys, the president of KCC, as Parrish's appraiser, arguing that he could not be considered "disinterested" due to his financial interest in the outcome.

State Farm then filed a "Petition to Compel Appraisal with Disinterested Appraiser" in the circuit court, seeking to have Parrish select a different appraiser. The circuit court ruled in favor of Parrish, allowing Keys to serve as the appraiser, which led to State Farm's appeal.

The Ruling

The District Court of Appeal reversed the circuit court's decision, stating that a public adjuster with a financial interest in the appraisal outcome cannot be considered a "disinterested appraiser". The court explained, "A contingency interest in an insured's appraisal award... is not a 'disinterested appraiser' under this insurance policy's appraisal provision."

The judges noted that the term "disinterested" means an appraiser who does not hold any interest in the outcome of the appraisal process. Since KCC's president, George Keys, had a financial stake in the outcome, he could not serve in that capacity. The court also expressed concerns about the legal basis of State Farm's petition, but ultimately treated it as a final order due to its conclusive nature.

Impact

This ruling establishes a clear precedent in Florida regarding the role of public adjusters in the appraisal process. It emphasizes that any appraiser involved in an insurance claim must be free of financial interests that could bias their judgment. This decision is expected to affect many policyholders and insurance companies across the state, as it clarifies the requirements for appraisers in insurance disputes.

Policyholders will need to ensure that any appraiser they select does not have a financial stake in the outcome of the appraisal process. This ruling could lead to changes in how public adjusters operate, as they may need to find ways to comply with the new standards set by the court.

What's Next

State Farm may seek further legal recourse, but the ruling stands as a significant interpretation of insurance policy language in Florida. There are no indications of a related case pending at this time.