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DE Public Adjuster study materials
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DE Public Adjuster: Claims Handling and Adjustment Practices

DE Public Adjuster · Work through your exam, one topic at a time.

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Claims Handling and Adjustment Practices

Domain 3 tests the day-to-day claim file: the public adjuster contract, notice of representation, investigation, proof of loss, negotiation, settlement, and fee handling.

Contract and representation

A public adjuster contract must be written, signed and dated by the insured, identify the adjuster and the fee or commission, describe the scope of services, and include the insured’s right to rescind within the statutory period. Oral fee agreements create disputes and violate the written-contract requirement. After signing, file a notice of representation with the insurer so communications are directed to the adjuster. The contract controls the fee; ambiguity is generally construed against the drafter.

Investigation and negotiation

  • Inspect promptly, photograph and diagram the loss, inventory damaged property, obtain repair estimates, and preserve evidence.
  • Prepare a sworn, itemized proof of loss within the policy or statutory deadline; never inflate quantities or conceal prior damage.
  • Compare estimates line by line, address depreciation and code upgrades, and document the basis for every disputed item.
  • Obtain the insured’s approval before settlement, explain the breakdown, and ensure the mortgagee or lienholder is included on drafts as required.
  • Keep the contract, correspondence, photographs, estimates, and settlement documents in the file.

Worked example

A contract states a 10% fee on the gross settlement. The insurer pays $150,000. The fee is $15,000 and the insured receives $135,000 before mortgagee and deductible adjustments. If the contract instead states 10% of the increase over a pre-contract offer of $100,000, the fee is 10% of $50,000, or $5,000. The written wording controls, which is why the scope and fee base must be clear before signing.

Traps that cost marks

Using an oral fee agreement; signing a release on the insured’s behalf; accepting a settlement without the insured’s authorization; paying referral fees to contractors; missing the proof-of-loss deadline; commingling client funds; and failing to document why an insurer’s position was rejected.