Hurricane Milton made landfall on Oct. 9 as a Category 3 storm near Siesta Key on Florida's central west coast. Following September's devastating Hurricane Helene, Milton marks the third hurricane to strike Florida this year—an event that has only occurred during five other hurricane seasons since 1871.
In response to Hurricane Milton's impact, Florida's Chief Financial Officer, Jimmy Patronis, issued Emergency Rule 69BER24-4. This rule seeks "to provide Florida consumers and property insurers with the greatest degree of transparency possible in loss estimation and claims adjustment processes after property losses caused by Hurricane Milton and Hurricane Helene." The rule brings new requirements for both insurance company adjusters and public adjusters.
Florida's new emergency rule requires that:
- Adjusters must use an electronic estimating program to create or modify an estimate of loss. The program must provide a report with an itemized, per-unit estimate of damage to the property, including itemized information on equipment, materials, labor and supplies. The program must apply price data that consists of unit-cost breakdowns consistent with those expected from a contractor or repair company in the relevant geographic market area. The program's price data must be updated at least monthly to reflect current market data.
- Changes to the prices applied by an electronic estimating
program, or to any other program input or output, are strictly
prohibited unless the adjuster can show with added documentation
that:
- Modification is required to produce an accurate estimate.
- Each and every change applies current market prices within the relevant geographic market area for the equipment, materials, labor and supplies necessary to complete the covered repairs.
This documentation must be detailed enough for the reviewer to decide that each and every modification is required and applies current market prices.
- Adjusters must provide the written estimate of loss to the
insured within the time prescribed by law. The written estimate of
loss provided to the insured must include:
- The line-item estimate produced by the electronic estimating program
- A variation report or other similar report showing whether and to what extent the program was modified by the adjuster
- If applicable, added documentation to support any modification to the input or output of the electronic estimating program
- Modification to an initial estimate of loss is prohibited
unless the revised estimate of loss meets three factors:
- It indicates any estimate of loss that has been modified from any prior estimate of loss.
- It provides a detailed explanation as to why each change was made.
- It includes the identity of the adjuster responsible for each change.
- Adjusters must retain all versions of the estimate of loss as required by law.
While Florida's new emergency rule seeks to enhance transparency, its full impact remains uncertain. Some in the legal community have expressed concerns that the rule could negatively impact public adjusters, potentially conflict with existing regulations allowing contractor bids, and lead to delays in claim processing. As the new rule is implemented, these issues will need to be closely monitored to ensure compliance.
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