Tornado Solicitation and a 20% Fee Contract

Reed's conduct raises several separate problems. Soliciting a distressed homeowner at the disaster scene, especially an elderly widow, may violate solicitation restrictions and consumer-protection standards. The contract lacks a clear cancellation or rescission notice, which is a core public adjuster contract requirement. A 20% fee on all proceeds, including emergency repairs and contents, may be unreasonable or inadequately disclosed, and the contract does not clearly define the fee base. Asking Elena to sign a blank proof of loss is dangerous and can lead to inaccurate claim submissions. Telling her to include jewelry she "thinks" she lost without receipts invites a misrepresentation. Promising a new roof and kitchen goes beyond the policy and misstates what the adjuster can deliver. The referral arrangement with the brother-in-law creates a conflict of interest, and receiving 10% of the fee back is an improper fee split or kickback. Each issue should be analyzed separately because each carries different licensing, contract, and fraud exposure.

The second adjuster should not pressure Elena or solicit her at the scene. The adjuster should explain that she may have the right to cancel or rescind Reed's contract within the statutory period and should send a written cancellation immediately, keeping proof of delivery. She should not sign any blank proof of loss and should not submit claims for items she cannot substantiate. The adjuster should review Reed's contract for the fee percentage, fee base, scope, cancellation clause, and any power of attorney. If Elena wants new representation, she should sign a new written contract that clearly discloses the fee and the right to rescind. The second adjuster should avoid criticizing Reed in a way that interferes with Elena's claim and should document the transition. If Reed already submitted inaccurate information, Elena should correct it in writing to the insurer. Depending on the facts, a complaint to the Georgia Department of Insurance may be appropriate, but the immediate priority is protecting Elena's claim and her right to cancel.

The fee must be set out in a written contract, stated as a specific percentage or method, and tied to the work the public adjuster actually performs. The adjuster should explain what portion of the recovery the fee applies to and whether emergency repairs or contents are included. The contract should include the required cancellation or rescission language and should not be signed under pressure. If Elena hires a contractor, she should select the contractor, receive a written scope and bid, and approve the work. The public adjuster should not steer the repair work to a relative or receive any payment from the contractor. Any referral fee, kickback, or split of the adjusting fee with an unlicensed contractor should be prohibited. If the second adjuster takes over, the fee should reflect only work performed on the claim and should not duplicate compensation already earned by Reed. The adjuster should disclose conflicts in writing and obtain Elena's informed consent before any related-party transaction.