Florida Attorney General James Uthmeier announced on October 20 that his office has opened an investigation and sent a subpoena for documents to Velocity Risk Underwriters, LLC, a Ryan Specialty managing general agent, over insurance policy rules that stop homeowners from hiring their own licensed public adjusters, the Attorney General's office said in a news release.

"We are looking into whether Velocity and other insurance companies worked together to ban public adjusters so they could pay out less money," Uthmeier said. "Insurance companies use their own adjusters. Homeowners should be allowed to hire an advocate on their side too."

A clause that can void the whole claim

The investigation focuses on policy rules called "anti-public adjuster" endorsements, the Attorney General's office said. Under these rules, if a homeowner hires a public adjuster — a licensed professional who works only for the homeowner, inspecting damage, estimating repair costs and dealing with the insurer — the insurance company can reject the entire claim. The clauses appear in special "surplus lines" policies, which often cover homes that are harder to insure, such as beachfront properties and houses with older roofs.

The Attorney General's office said homeowners who use a public adjuster can receive up to 30 percent more money on their claims than those who do not, and that Velocity writes thousands of these policies in Florida, covering millions of dollars in premiums. The subpoena demands that Velocity turn over records about its membership in trade groups, any communications with other insurance companies, and any agreements to stop homeowners from using public adjusters.

A civil lawsuit brought by public adjusters against Velocity over the same issue is pending in Miami-Dade Circuit Court, Insurance Journal reported. A Velocity Risk spokesperson said in an email that the firm is cooperating with the Attorney General's office and is confident of a favourable outcome, Insurance Journal reported. Insurance Journal also noted that Velocity Risk does not write homeowners' policies in Florida — a point the investigation's findings will have to settle against the Attorney General's statement that it writes thousands of these policies in the state.