Public Adjusting Practices and Ethics
Role and Duties
A public adjuster represents the insured, not the insurer, and is compensated by the insured, usually through a percentage of the settlement. Candidates must understand the licensing requirements, the written contract requirements, and the prohibition on soliciting during a declared emergency. The adjuster must document the loss, prepare the claim, negotiate with the insurer, and keep the insured informed.
Ethical Standards
Ethics questions test conflicts of interest, fee disclosure, confidentiality, and accurate documentation. A public adjuster may not misrepresent policy provisions, inflate claims, or accept compensation from both sides. The adjuster must maintain records and act in the insured's best interest.
Traps
Questions often test whether a public adjuster may settle a claim without the insured's authorization or whether a fee can be charged before the contract is signed. Another trap is solicitation during a catastrophe; many jurisdictions restrict it.
Rule of Thumb
Put every fee, authorization, and settlement in writing, and never accept compensation that creates a conflict.
Worked Example
An insured signs a contract with a 10% fee. The insurer offers $50,000. The adjuster must present the offer, explain the net after fee ($45,000), and obtain written authorization before settlement.