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IIK strongly supported HB 232 during the 2023 legislative session, a much-needed bill that was designed to deal with the actions of public adjusters who are licensed by the Kentucky Department of Insurance (DOI). DOI supported the bill and had a hand in strengthening many of its provisions. The bill was necessary because some individuals engaged in “storm chasing” and preyed upon vulnerable consumers on the heels of the disastrous tornadoes and windstorms, including several out-of-state public adjusters coming into Kentucky.

This bill strengthened the regulations affecting public adjusters by addressing several key issues dealing with insurance claims. First, it created transparency by requiring signed contracts between public adjusters and insureds, and it allowed for those who are involved in the claim to communicate directly with the insured. Second, it addressed conflicts of interest by preventing public adjusters from receiving compensation from those affiliated with contractors or others.

Finally, it provided consumer protection by creating 10% and 15% thresholds on the compensation a public adjuster may receive from the insurance settlement. Previously, there were no limitations set on the amount a public adjuster could receive from an insurance settlement, leaving the insured at risk of being charged an unreasonable fee. It should be noted that public adjuster’s fees are not added to the claim by the insurer. Instead, they come out of the pocket of the policyholder.

HB 232 was passed by the General Assembly and it was signed by the Governor. Its effective date is June 29, 2023.