Ch 1 · How to Become a Public Adjuster in Florida
Module 1.6
How PAs Work With Attorneys on First-Party Property Claims
Post-HB 837 economics. Division of labor. Referral rules. Fee stacking math. When the team approach pays off.
12 min read
What you'll learn
- The first-party property landscape post-reform (HB 837 + HB 7065 + SB 2A)
- Who does what — phase-by-phase
- The legal guardrails on referrals + fee-sharing
- Fee stacking math
- When the team approach actually pays off
1.6.1 The post-reform landscape (current)
Three reforms changed the economics:
HB 837 (March 24, 2023) — repealed § 627.428. The long-standing one-way attorney-fee statute is gone for property insurance suits. Policyholder-side attorneys can no longer automatically recover fees from the insurer when they win.
Practical effect: litigation got more expensive for the policyholder. More cases need to settle pre-suit because suing has gotten harder to justify economically. PA documentation became more valuable upfront — the case-building work that used to support a fee-shifting lawsuit now has to land a settlement before suit.
HB 7065 (2019) — AOB reform. Killed AOB abuse with restoration vendors. PA-attorney teams largely replaced the AOB-driven litigation model.
SB 2A (Dec 16, 2022) — claim deadlines. 1-year notice for new claims, 18 months for supplemental. Carrier response timelines under § 627.70131 (7-day acknowledgment, 60-day pay/deny decision after complete proof of loss). Pre-suit notice requirement under § 627.70152 — 10 business days before filing.
Bad faith: Civil Remedy Notice (CRN) under § 624.155 remains the primary trigger. 60-day cure period.
1.6.2 Division of labor — phase by phase
| Phase | Public Adjuster | Attorney |
|---|---|---|
| Intake / FNOL | Documents loss. Secures property. Notifies insurer. | Reviews policy. Advises on coverage strategy if engaged early. |
| Investigation | Inspects. Scopes damage. Builds itemized Xactimate estimate. Gathers expert reports. | Identifies legal exposures. Preserves evidence per litigation hold standards. |
| Proof of Loss | Drafts and submits sworn POL within policy deadline. | Reviews for legal sufficiency before submission. |
| Negotiation | Leads settlement discussions with insurer's adjuster. | Stands by for coverage disputes, denials, or bad-faith conduct. |
| EUO | Cannot represent the insured. May provide background to attorney. | Represents and prepares the insured. |
| Appraisal | May serve as the insured's appraiser if qualified and disinterested. | Advises whether to invoke. Handles disputes over the appraisal clause. |
| Pre-suit notice (§ 627.70152) | Provides documentation. PA does not draft the notice. | Drafts and serves. |
| Litigation | Steps back. May serve as fact or expert witness. | Files suit. Conducts discovery. Takes case to trial or mediation. |
1.6.3 Referral rules — the legal guardrails
No fee-sharing. No paid referrals. Either direction.
Two overlapping prohibitions:
- § 626.854(13) — PAs cannot pay non-PAs for referrals; cannot accept paid referrals from business partners.
- Florida Bar Rule 4-5.4 — lawyers cannot share fees with non-lawyers.
Result: No fee arrangement between a PA and an attorney is lawful in Florida.
What's allowed:
- Uncompensated referrals based on the client's best interest
- Co-engagement with separate written engagement letters from each professional
- The attorney exemption (§ 626.860) — an attorney can perform PA functions under their bar license without a separate PA license. But: non-attorney staff at law firms cannot ride that exemption (covered in Module 1.1.3).
What's prohibited:
- PA paying attorney for referrals
- Attorney paying PA for referrals
- Splitting the contingency fee between PA and attorney
- Side payments, "consulting fees," or any compensation tied to a referral
DFS + the Bar both enforce these. Cross-enforcement is common — a Bar complaint generates a DFS investigation and vice versa.
1.6.4 Fee stacking — the practical math
If both a PA (10% emergency / 20% non-emergency) and an attorney (typically 20–33% contingency post-HB 837) are involved on the same claim, the insured can lose 30%+ of recovery to professional fees.
Example: $100,000 claim payment, hurricane (declared emergency), within year 1.
| Layer | % | $ |
|---|---|---|
| PA fee (capped at 10%) | 10% | $10,000 |
| Attorney contingency (assume 25% post-HB 837) | 25% | $22,500 (calculated on net after PA) |
| Total to insured | — | $67,500 |
Math varies depending on fee waterfall structure. Common best-practice arrangements:
- PA fee taken first off the gross. Attorney contingency runs on net after PA.
- OR: attorney contingency on gross, PA fee carved out separately by the insured.
Either way: everything in writing. Two engagement letters. Clear scope. Clear fee waterfall.
1.6.5 When the team approach pays off
Cases where PA + attorney together produce materially better outcomes than either alone:
- Complex hurricane / flood claims with overlapping perils (wind vs. flood, anti-concurrent causation issues)
- Large commercial losses with business-interruption exposure
- Denied or significantly underpaid claims where bad-faith setup matters
- Claims headed into appraisal where coverage disputes still need legal resolution
- Mold, hidden water, or causation-disputed claims requiring expert reports + legal interpretation
1.6.6 When the team approach doesn't pay off
Cases where two layers of fees swallow the recovery:
- Small clean claims under ~$30K where PA alone gets it done
- Coverage-denial-only claims where the issue is purely legal — go straight to attorney, skip PA
- Claims the carrier is paying fairly — neither layer adds enough value
1.6.7 The handoff playbook
When you decide a claim needs an attorney:
- Stop adjusting steps that touch legal questions — appraisal demands, CRN drafts, demand letters with statutory language.
- Hand off the file — every photo, estimate, communication, expert report. Organized.
- Get a clear engagement letter between insured + attorney, separate from your PA engagement.
- Confirm the fee waterfall in writing — who gets paid first off what.
- Stay in support role — fact witness, expert witness, or quiet file resource. Stop directing strategy.
- Know when you're a witness, not an advocate. If you become a fact witness, stop communicating with the insurer except through counsel.
1.6.8 Action steps
- Build a vetted list of 3–5 first-party property attorneys before you need one.
- Standardize a handoff packet template — index, file structure, evidence inventory.
- Read Florida Bar Rule 4-5.4 once. Re-read § 626.854(13). Know both verbatim.
- Confirm your PA engagement letter has a clean carve-out clause for attorney involvement.
Next: 1.7 Practical Resources.
Educational. Not legal advice. Florida insurance law and Bar fee-sharing rules change. SB 2A (Dec 16, 2022), HB 837 (March 24, 2023), and HB 7065 (2019) altered claim, attorney-fee, and AOB rules; subsequent amendments may apply. Always verify current Florida Statutes, DFS guidance, and Florida Bar rules before relying on any specific rule.