CO Public Adjuster cheat sheet

A public adjuster in Colorado is a person who, for compensation, acts on behalf of an insured to negotiate, adjust, or settle a first-party property claim; the license is issued under the producer-licensing statute (C.R.S. title 10, article 2) and regulated by the Division of Insurance (DORA).

Colorado licenses public adjusters as a distinct producer license line; a resident license requires the exam, fingerprint-based background check, and the standard producer application through the Division's online system (Sircon/NIPR), while nonresidents qualify through reciprocity or a nonresident application.

Public adjusters may not also act as staff or independent adjusters on the same claim, and may not represent the insurer and the insured simultaneously - the contract and license are limited to representing the insured for compensation.

A written contract is required before a public adjuster may represent an insured; it must state the fee or fee method, be signed by the insured, and include the insured's right to rescind the contract within a statutory cooling-off period after signing.

Fees must be reasonable and disclosed; Colorado prohibits compensation contingent on an agreement to use a particular contractor or vendor, and prohibits sharing fees with unlicensed persons for claim solicitation.

Solicitation restrictions: public adjusters may not solicit a loss during the first days after a casualty event (statutory waiting period), may not use false or misleading advertising, and may not misrepresent that they are affiliated with or endorsed by the insurer or the Division of Insurance.

Licensees must report administrative actions, criminal convictions, and changes of address or name to the Division within the timeframes set by regulation; continuing education and license renewal follow the producer renewal cycle.

The Division enforces the public adjuster statutes through market-conduct examinations, consumer complaints, fines, license suspension or revocation, and cease-and-desist orders; unfair claim settlement practices are separately defined as unfair trade practices under C.R.S. title 10, article 3.

Bulletins issued by the Colorado Insurance Commissioner interpret statutes and set expectations (for example, on claim handling timelines, disaster response, and fee transparency); they are binding guidance and are published on the Division's website.

Resident public adjuster license path: be at least 18, complete the prelicensing/exam requirement, submit fingerprints for a CBI/FBI background check, pay the license fee, and apply electronically; the Division issues or denies within its review period.

Nonresident licensing: Colorado grants nonresident public adjuster licenses to holders in good standing of a home-state public adjuster license, or through the NAIC uniform application; a designated home state is required for reciprocal treatment.

Business entities that adjust claims for compensation must hold an agency/adjuster entity registration and designate a licensed responsible producer; unlicensed entity operation is a violation.

Appointments: a public adjuster representing insureds under a business entity must be appointed/affiliated with that entity as required by regulation; appointments are filed electronically and terminated when the relationship ends.

Continuing education: licensees must complete the Colorado CE requirement for the license term (ethics and Colorado-specific law components included) and certify completion at renewal; CE records must be retained and available on audit.

Recordkeeping: retain contracts, fee disclosures, claim files, correspondence, and settlement documents for the period required by regulation (commonly at least five years), and produce them on Division request.

Change reporting: report name changes, address changes, and disciplinary actions in other jurisdictions promptly; failure to report is an independent violation supporting discipline.

Prohibited conduct: rebating, fee-splitting with unlicensed solicitors, commingling client claim funds with operating funds, and acting on a claim without a signed contract.

Renewal lapse: operating with an expired license voids contracts and subjects the adjuster to civil penalties; reinstatement may require late fees and CE make-up.

Replacement cost value (RCV) = cost to repair or replace with new materials of like kind and quality; actual cash value (ACV) = RCV minus depreciation; most Colorado HO forms pay ACV first and RCV after repair/replacement, subject to the policy's holdback and time limits.

Coinsurance/insurance-to-value: under a coinsurance clause, recovery = loss × (limit carried ÷ limit required), where limit required = coinsurance % × replacement cost at loss; many HO forms instead apply an inflation guard and a penalty only when the limit falls below 80% of replacement cost.

Deductibles: apply the policy deductible per occurrence; for wind/hail, Colorado policies may use a percentage deductible (e.g., 1% or 2% of Coverage A) - compute as Coverage A limit × deductible percentage, not as a percentage of the loss.

Coverage A/B/C/D structure: A = dwelling, B = other structures (often 10% of A), C = personal property (often 50–70% of A), D = loss of use; sublimits apply to special categories (jewelry, firearms, money, business property).

Matching and repair scope: valuation must reflect the cost to restore the damaged portion to a uniform appearance where the policy or Colorado claim-handling standards require reasonable matching; line-item estimates (Xactimate-style) document quantity, unit price, overhead and profit.

Overhead and profit (O&P) is generally included when the loss requires three or more trades or a general contractor; it is not automatic and must be justified by the scope of repairs.

Business interruption/loss of use: loss of use pays additional living expenses (ALE) for the reasonable time to repair plus a stated time limit; business income pays net income loss plus continuing expenses for the period of restoration, subject to actual-loss and period-of-restoration definitions.

Ordinance or law, debris removal, and water/backup endorsements are separate coverage grants with their own limits; flood (rising water) is excluded under standard property forms and requires a separate flood policy.

Burden of proof: the insured bears the burden to prove a covered loss and the amount of damage; the insurer must then apply exclusions and conditions, and the adjuster's estimate must be supported by documentation (photos, measurements, contractor bids, pricing data).

Unfair claim settlement practices include misrepresenting policy provisions, failing to acknowledge or act reasonably promptly on communications, refusing to pay without a reasonable investigation, and failing to explain the basis for denial - these are statutory violations.

Prompt-payment and communication standards: acknowledge the claim, begin investigation promptly, and provide a written explanation of coverage decisions; Colorado market-conduct rules and bulletins set expectations for timely status updates and payment of undisputed amounts.

Written fee disclosure and rescission: the public adjuster contract must state the fee percentage or method, the insured's right to cancel within the cooling-off period, and that the adjuster represents only the insured - never the insurer.

Duty of good faith and fair dealing runs to the insured; a public adjuster may not misrepresent the claim, inflate damages, submit altered documents, or advise an insured to make false statements - such conduct is fraud and grounds for license revocation.

Conflict of interest: a public adjuster may not refer the insured to a contractor, appraiser, or attorney in which the adjuster has an undisclosed financial interest, and may not steer repairs to obtain a fee or kickback.

Confidentiality: claim information, financial records, and personal data obtained from the insured may be used only for adjusting the claim and must be protected; disclosure to third parties requires authorization or legal compulsion.

Appraisal and dispute resolution: when the policy provides appraisal for disagreement on the amount of loss, each side selects a competent appraiser and the appraisers select an umpire; the public adjuster may not act as the appraiser or umpire on the same claim.

Documentation and transparency: provide the insured copies of estimates, correspondence, and settlement breakdowns; explain the difference between ACV and RCV payments, recoverable depreciation, and the deductible's effect on the net settlement.

Prohibited solicitation and advertising: no door-to-door solicitation during the statutory waiting period after a loss, no use of official-looking documents implying government affiliation, and no unlicensed persons soliciting claims on the adjuster's behalf.