What Is UPPA?
Consumers must take certain steps to protect themselves and ensure his or her insurance company is providing adequate coverage. Unfortunately, many scams exist that seek to cheat responsible policy holders out of their money. One of these, The Unlicensed Practice of Public Adjusting (UPPA), often takes advantage of some of the population’s most vulnerable people –those recovering from disaster, the elderly, the uneducated, and more. Hiring one of these scammers could lead to losses of thousands of dollars.
What Is UPPA?
The Unauthorized Practice of Public Adjusting occurs when someone other than a licensed claims adjuster works with a consumer to settle a property insurance claim. A policyholder may hire a public adjuster after a disaster, ostensibly to represent a consumer’s interests following a hurricane, fire, tornado, or other catastrophe. Typically, legitimate public adjusters have special training when it comes to evaluating claims, such as appraising the value of a loss and negotiating a claim amount.
So-called “bad actors” have seen an opportunity to make a little money off the vulnerable. These unlicensed or unauthorized claims adjusters will pretend to have the authority to handle a property claim, but they do not. Typical people who may attempt to practice unlicensed adjusting include accountants, restoration companies, contractors, roofers, and other tradesmen.
If a contractor is delving into a policyholder’s coverage, attempting to negotiate claims with the insurance company, or tossing around jargon like “bad faith,” it might be a red flag that they’re acting in the capacity of a unauthorized claims adjuster. A contractor’s only job is to give a policyholder an estimate of the work they provide; they cannot provide the policyholder with any advice regarding a claim.
How Does This Affect Policyholders?
Any policyholder who experiences a disaster is in a vulnerable position. The Unauthorized Practice of Public Adjusting further complicates any issues a person has by overestimating the amount of work he or she must do to make a little money. Some contractors or tradespeople will go as far as to abandon a job site after they receive the insurance money. Some insurance carriers absorb the price of the overpriced materials, which trickles down to the consumer via increased premiums. Others will have policyholders pay for the extra.
Policyholders must not only deal with the fact that a rebuild involves overpriced materials, they may also face an increase in insurance premiums and less available coverage in the future.
It’s important for all policyholders to remember that a licensed public adjuster faces strict regulation from the state in which he or she practices and will generally work for a percentage of the claim payout. On the other hand, someone who practices UPPA will attempt to charge policyholders for more than the standard because they have no regulation.
Where Does UPPA Occur?
UPPA can occur virtually anywhere – as long as there are vulnerable people, there will be scammers trying to take advantage of them. However, higher rates of UPPA generally occur in places that are prone to frequent natural disasters, such as Texas and Louisiana. Consumers should be particularly attuned to the practice when rebuilding a home after a large scale catastrophe, when this practice seems to occur most often.
Consumers should be aware of the risks inherent in UPPA, and should vet any public adjusters carefully. Licensed public adjusters face strict state regulation, so request to see a copy of credentials. Be aware of any potential red flags, such as tradespeople or contractors that seem to be acting outside of their realm of practice. By remaining vigilant, consumers can identify potential occurrences of UPPA and defend themselves before they lose thousands of dollars at a vulnerable time.