USA — COLORADO SPRINGS One day after the Waldo Canyon fire engulfed hundreds of homes, a 65-year-old businessman from outside Los Angeles who has made a career out of chasing natural disasters registered his company, Unity Adjustments, in Colorado.
Before long, Peter Romero was behind the wheel of the motor home that serves as mobile headquarters for his business as a public insurance adjuster an industry unknown to most Coloradans.
Public adjusters promise to help property owners get fair insurance settlements while taking a share for themselves on a contingency basis. Few are as prolific as Romero, who cites experience on more than 20 calamities from hurricanes and firestorms to earthquakes.
Only things have not gone according to plan in Colorado Springs.
Romero said he only has signed up about 15 clients, when 60 to 80 would be the norm. A separate nonprofit group which Romero said he recently formed as a helping hand for victims, not a front for his business was kicked out of the fire station where it held meetings.
“Things can always be going better,” Romero said. “I made a commitment. We’re in it for the long haul. It’s the right thing to do.”
An established presence in the Northeast and hurricane-prone Gulf states, public adjusters are gaining a foothold in Colorado, attracted by a run of devastating wildfires and hailstorms and weak regulations that make it easy for out-of-state operators to set up shop.
Since 2007, the number of licensed public adjusters in Colorado has jumped from 43 to 267, with non-residents fueling almost all the growth.
While public adjusters describe their work as an important check on insurers looking to pay as little as possible, insurance industry officials and some consumer advocates criticize them as largely unnecessary players who can prolong claims, create acrimony and cut into settlements.
Property owners unfamiliar with the process are struggling to figure out whom to trust. Adding to the confusion is conflicting advice from nonprofit groups involved in Waldo Canyon disaster recovery some of which have ties to public adjusters or trial attorneys.
Silver-haired and talkative, Romero was part of a swarm of public adjusters who arrived in Colorado this summer to chase the latest “cat,” or catastrophe.
Romero said he does not need more money to support a lifestyle that includes cruises with his wife, ballroom dancing and organic gardening. More than anything, he said, he gets bored on the sidelines.
“There is a lot of personal satisfaction in going out and helping people that don’t have anyone else to really help them,” he said.
Romero said he chose Colorado Springs over other areas because the devastation was concentrated so it was easier to organize meetings. More than 345 homes were destroyed in the Waldo Canyon fire, making it the most destructive wildfire in state history.
During his career, Romero claims to have recouped more than $100 million in supplemental insured property loss payments over insurers’ original settlements. Romero said his fee is one-third of whatever he is able to obtain above what the insured has already received or been promised.
Most public adjusters work on a contingency and take a fee typically 10 or 15 percent from the total settlement, industry officials say.
Romero said he offers guidance to potential clients for free and only enters into a contract if significant money is involved.
“We either recover and get a percentage or we don’t get squat,” he said.
His record is not spotless. While working as a bank branch manager, Romero was convicted of felony grand theft in 1985 after he repossessed gas from a service station that, unbeknownst to him, had changed ownership, according to public records and an explanation Romero submitted in his June application for a Colorado license.
The charge later was reduced and dismissed, records show.
And in 1987, , Romero’s license was suspended briefly in California which Romero attributed to a mix-up about whether he needed to be licensed for a new job.
“He is a huckster, a salesman,” said Amy Bach, executive director of United Policyholders, a nonprofit that has won grants to provide fire recovery workshops in Colorado and gets funding from public adjusters and attorneys. “I have a soft spot for the guy because I believe his heart is in the right place in the sense he knows people get shortchanged. And he knows a lot about the industry.”
Bach, however, said some of Romero’s business practices are suspect. She cited Romero’s sales pitch that he can recover settlements above policy limits. That, she said, is outside of the realm of public adjusters, who can only recover what is due to an policyholder.
Romero, however, said he has succeeded time and again.
“I go outside the box,” he said. “No public adjuster in the country has ever successfully removed a limit without an attorney except me.”
He declined to specifically describe how, saying, “I’m not going to teach anyone how to do it. I get asked all the time.”
The influx of non-resident public adjusters after this summer’s fires prompted the Colorado Division of Insurance to urge consumers to check licensing, references, permanent places of residency and Better Business Bureau complaints before hiring one.
“In theory they may be beneficial,” said Bob Hunter, director of insurance for the Consumer Federation of America, an advocacy group. “But it’s my experience a lot of them swoop in like ambulance chasers. Especially since regulation is so weak, it’s an area for trouble.”
Carole Walker of the Rocky Mountain Insurance Information Association, an industry group, said hiring a public adjuster may ease hassle but could prolong claims and take a chunk out of settlement money.
“What we see is groups come in and tell everyone, ‘Don’t trust your insurance company.’ But at the end, they are going to have to work with their insurance companies,” Walker said.
Scott Price and Karla Heard-Price felt they did everything asked of them in documenting the destruction of their home in the Waldo Canyon fire including 157 photos of every drawer and piece of furniture.
But their insurance company still took more than two months to acknowledge a total loss and then low-balled them, they said.
The couple hired Scott deLuise, chief executive officer of Broomfield-based Matrix Business Consulting and vice president of the National Association of Public Insurance Adjusters.
“It’s nice to have someone on your side,” Heard-Price said. “The insurance company is bigger, stronger, mightier. You just get so tired and demoralized.”
DeLuise said good public adjusters get unjustly villainized; if insurance companies paid claims fairly, public adjusters wouldn’t exist, he said.
“Having your insurance company adjust your claim is like having the IRS prepare your tax return,” deLuise said. “They are not going to cheat you, but they’re not going to look for every bit of money for you, either.”
He recommended consumers hire only local, licensed public adjusters who cite numerous Colorado wildfire survivors as references.
All but five states fully license public adjusters, said Brian Goodman, general counsel of the National Association of Public Insurance Adjusters. About a dozen states cap how much public adjusters can charge. Others restrict soliciting to daylight hours or after a specified amount of time has passed since a disaster.
Colorado fully licenses public adjusters, but the bar for becoming licensed is low and the regulations are minimal.
State residents must pass a written exam testing the “minimum level of competence” in public adjusting. Non-residents don’t have to take the test if they are licensed in their home state and have no complaints pending.
Adjusters must submit blank copies of their contracts. There are no fee caps or solicitation restrictions. Colorado does allow consumers to rescind a contract with a public adjuster within 72 hours of signing.
Paula Sisneros, director of compliance and investigations with the Colorado Division of Insurance, said the growing number of out-of-state public adjusters has not gone unnoticed. Colorado already has set a record this year for new non-resident licenses 55.
“I don’t know if I’d call it a concern, but it’s something that has caught our attention,” Sisneros said. “Any time we see more people from out of state working than from our state working, we ask why.”
Since 2007, Sisneros said, the insurance division has completed investigations on seven complaints involving public adjusters five dealing with unlicensed activity and two with adjustment practices.
Barbara Kelley, executive director of the Colorado Department of Regulatory Agencies, acknowledged Colorado’s rules are “very nominal.”
“Together with our legislative partners, the state will make a decision about going forward in terms of tightening some requirements, adding other accountability issues and looking at how they could strengthen the consumer protection concerns,” she said.
DeLuise said Colorado’s licensing exams should be more difficult. But he opposes fee caps and solicitation bans because he said neither excessive fees nor over-aggressiveness have been problems here.
The “town hall meetings” promised testimony from wildfire survivors, insurance claim advice even tips for recognizing post-traumatic stress disorder.
The meetings were staged by Policyholders Recovery , a fledgling nonprofit headed by Romero that was registered in Colorado in August.
Romero said he has been staging such workshops for 22 years; the nonprofit, he said, allows him to write off expenses and get better venues.
Romero said he is the sole source of financing and gets paid no salary. He said plans to seek tax-exempt status were slowed when the Internal Revenue Service lost some of his paperwork.
The nonprofit, Romero said, is not a way for him to promote his business.
“It’d be an excellent way if I had a sign-up sheet, if I handed out cards for the public adjuster business at the meetings, if I had someone put fliers on the cars outside, if I had someone soliciting outside the door,” Romero said. “But none of those things happen.”
At most, Romero said the nonprofit could be considered “soft marketing” because attendees might later hire him.
Linda Connery, who attended a meeting at a local church, said Romero “tried to put a lot of fear in people,” urged against hiring attorneys and repeatedly emphasized he wasn’t trying to sell anything.
“I felt like he was taking advantage of a lot of people who at the time that was the last thing they needed,” said Connery, whose home suffered smoke damage.
Another wildfire victim, Mary Beth Pribanic, left with a different impression after attending several presentations.
“There was absolutely no pushing for his services, and I’m a fairly skeptical person for sales jobs,” she said. “He told us, ‘I am going to give you the knowledge to get you as far as you possibly can on your own. If you get everything you want, great. If you are having difficulty and don’t think you can handle this, you can give me a call.””
Pribanic and her husband, who lost everything but their two cats and some photo albums in the fire, decided they couldn’t handle it.
After meeting with Romero several times and checking his references, the couple hired him.
“After five months, we are really weary,” Pribanic said. “The fire took everything we had. The insurance company takes all our time.”
Romero was told in late October he could no longer hold meetings at the Colorado Springs Fire Station 18 community room after the head of Colorado Springs Together, a local group formed to help with wildfire recovery, raised concerns about him.
Although Romero insisted he was only trying to help people through the nonprofit, department officials didn’t buy it.
“The fact remains that his sessions often lead to personal business opportunities,” Colorado Springs Fire Capt. Scott Smith wrote in an Oct. 25 email to colleagues, “which certainly appears to be his underlying motivation.”
Romero doesn’t see it that way.
“I truly believe it’s not opposing to be both a good businessman and a so-called do-gooder who is trying to help the community,” he said. “It’s kind of like the old fashioned business you look a person in the eye, you can trust them, and you can take it to the bank and you know they’re not going to let you down. That is the way I try to live.”
While most out-of-state public adjusters are long gone, Romero said he will remain in Colorado Springs through at least next summer.
Unable to find a new location for his nonprofit meetings, struggling to sign up clients, Romero has resorted to yard signs. They dot the hillsides steadily rebuilding from the Waldo Canyon fire: “Claim help? Call Pete.” The failure was in the forest areas.Advertisement
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