CA Public Adjuster cheat sheet

Public adjusters are licensed by the California Department of Insurance under Insurance Code §§15000 et seq.; paid adjusting for an insured without a license is prohibited.

A public adjuster license requires a CDI application, prelicensing education, examination, background check, and a surety bond filed with the commissioner.

Public adjuster licenses renew on a two-year cycle, and continuing education is required for renewal.

Public adjusters may not use titles, badges, or advertising that implies they are insurers, attorneys, or government officials.

Insurance Code §790.03(h) lists unfair claims settlement practices, including misrepresenting policy provisions and failing to act promptly on claims.

10 CCR §2695 requires an insurer to acknowledge receipt of a first-party claim within 15 calendar days.

10 CCR §2695 requires an insurer to accept or deny a first-party claim within 40 calendar days after receiving a complete proof of claim.

Claim files, contracts, and financial records must be maintained and produced to CDI on examination; California insurance record retention is generally five years.

The public adjuster contract must be in writing, dated, signed by the insured, and state the compensation method and amount or percentage.

The insured may rescind the public adjuster contract within three business days after signing it.

The contract must disclose that the public adjuster represents the insured and not the insurer.

A complete signed copy of the contract must be furnished to the insured.

Client funds received by a public adjuster are trust funds and may not be commingled with the adjuster's operating or personal funds.

A public adjuster may not represent both the insured and the insurer on the same claim.

A public adjuster may not take an assignment of the claim or acquire an ownership interest in policy benefits.

Compensation must be reasonable and disclosed; a contingent fee must be stated as a percentage or formula tied to the amount recovered.

Actual cash value = replacement cost − depreciation; replacement cost coverage pays repair or replacement cost without a depreciation holdback.

Coinsurance recovery = (insurance carried ÷ insurance required) × covered loss, subject to the policy limit and deductible.

Required insurance under a coinsurance clause = coinsurance percentage × property value at the time of loss.

A proof of loss is a sworn statement of the amount and cause of loss, and the insurer may require it as a policy condition.

Additional living expense coverage pays the necessary increase in living costs while the dwelling is uninhabitable due to a covered loss.

Ordinance or law coverage pays code-required demolition, reconstruction, or upgrades that the base policy excludes.

The insured's duties after loss include prompt notice, protecting property from further damage, and cooperating with the investigation.

Subrogation allows the insurer to pursue responsible third parties after payment; the insured must not impair that right.

ACV = RCV − depreciation; depreciation is measured from purchase or installation to the date of loss.

Recoverable depreciation is withheld until the insured documents that repair or replacement has been completed.

Overhead and profit is added when the scope requires a general contractor to coordinate multiple trades.

Betterment is an improvement beyond pre-loss condition, and insurers may deduct it when a repair upgrades the property.

A line-item estimate should separate labor, materials, equipment, taxes, and overhead and profit by trade.

A claim file should contain dated photographs, a room-by-room inventory, receipts, contractor estimates, and the proof of loss.

When undamaged materials cannot be matched, replacement of adjoining undamaged items may be owed under the policy's matching provisions.

Salvage value reduces the loss payment when damaged property retains recoverable value.

Knowingly presenting a false or inflated insurance claim is insurance fraud under California Penal Code §550.

Public adjusters may not misrepresent policy coverage, limits, or the claims process to obtain a contract.

Paying or accepting a referral fee or kickback for a claim referral is an unlawful conflict of interest.

A public adjuster may not charge a fee for services not performed or for amounts not recovered unless the contract permits it.

Suspected fraud must be documented and reported to the insurer and may be referred to CDI's fraud division.

Unfair practices include false advertising, coercion, undisclosed fees, and charging unreasonable compensation.

A public adjuster may not commingle client trust funds or use them for business expenses.

Acting as both public adjuster and repair contractor on the same loss creates an undisclosed conflict of interest.