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🚫 They’re Back: Anti-Public Insurance Adjuster Endorsements in Louisiana

Why care? Well, a very-big-someone cared enough to file an appeal to invalidate the directive that banned these endorsements. So, maybe, you should pay attention...

Are anti-public adjuster endorsements coming back to Louisiana policies?

Louisiana property policyholders have suffered enough:

So, what now?

Among many sweeping measures intended to protect policyholders in the aftermath of events of the last few years, on January 24, 2022, James J. Donelon, Commissioner of the Louisiana Department of Insurance (LDI), issued a directive.

This directive—Directive 219—barred insurers from use of specific language in property insurance policies. Specifically, something called Anti-Public Insurance Adjuster endorsements.

A "surplus lines insurer" did not take too kindly to this action, and filed an appeal, which resulted in an order rendering Directive 219 invalid, on August 23rd, 2022.

Most readers of this blog will understand what the phrase Anti-Public Insurance Adjuster endorsements means. For those that don't, here is some background, and why this may matter to you:

  • Most property insurance is regulated at state level, although some insurance, such as flood, is federally-regulated. A state insurance commissioner is a public service official that regulates insurance, with a focus on consumer protection, while balancing healthy insurance commerce.

  • According to the National Association of Public Insurance Adjusters, public insurance adjusters are "experts on property loss adjustment who are retained by policyholders to assist in preparing, filing and adjusting insurance claims. Employed exclusively by a policyholder who has sustained an insured loss, these professionals manage every detail of the claim, working closely with the insured to provide the most equitable and prompt settlement possible[...]"

  • Public insurance adjusters are currently licensed (or, at least regulated/registered) in 46 of the 50 states in the US (some form of public insurance adjusters are also regulated in Canada, the UK, and other countries around the world).

  • An endorsement is a form added to a property policy, that contains language that modifies (adds, changes, or takes away) coverage.

In summary, anti-public insurance adjuster endorsements is language added to a policy, by an insurance company, that seek to bar a policyholder from hiring a public insurance adjuster to (depending on each state's regulations) represent them, or assist them with, an insured property loss. To quote the LDI's now-invalid directive:

"It has come to the attention of the Louisiana Department of Insurance that some insurers are attempting to prohibit the use of public adjusters by insureds in their policy provisions by endorsements to their policies. The anti-public adjuster clauses attempt to prohibit insureds from hiring, engaging, retaining, contracting with, or otherwise utilizing the services of a public adjuster. The prohibition contained in these endorsements or any other policy provision directly contravenes La. R.S. 22: 1704(E)(2), which grants insureds the right to hire a public adjuster."

Okay. So, again, why should I care?

A state insurance commissioner decided to issue Directive 219, in the interest of the public.

So, using critical thinking concepts, the question we might ask first, is:

Why did someone care enough to file an appeal to block this directive?

Does the appealing party feel that public insurance adjusters are such a blight, that they must be banned from the inception of the policy, before a loss ever happens? Do they feel that public insurance adjusters are bad for policyholders, bad for insurance companies, or both?

Well, the information I have at my disposal, citing an appeal by a "surplus lines insurer", does not answer my questions. Only:

"[...]Appellant claimed it is aggrieved by the Directive. [...] Appellant argued that Directive 219 is inconsistent with Louisiana law."

I'm not an attorney, so I can't comment on what that might mean (perhaps one will kindly provide us with some general insight, in the comments below).

Concerningly, anti-public insurance adjuster endorsements are popping up in states across the country. Since the public insurance adjusting profession has existed, and represented policyholders since at least the 1940s—and some purport that they may have preceded insurance company adjusters—why have these endorsements been popping up, all of a sudden?

I'm sure that time, will tell.

So, what can I do about it?

Well, probably not much at the current moment. But, I do have a constructive suggestion, that will help everyone in the future.

“Don’t judge each day by the harvest you reap but by the seeds you plant.” — Robert Louis Stevenson

As with all relationships, even the sometimes interesting ones highlighted in this article, it takes two to tango, as they say. Meaning, seek to first control what you can control: yourself, including your time, energy, and charity. Every property insurance industry professional, of any kind, might consider these tips:

What do you think about all of this? I'd love to know, in the comments.

Download the order invalidating Directive 219, here:

Louisiana Order Invalidating Directive 219, August 23, 2022
Download PDF • 2.61MB

Update 3/2/23: read Chip Merlin, Esq.'s article on the matter, at the Property Insurance Coverage Law blog.

✌🏾 Be well,


Coffee and couch


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