HI Public Adjuster cheat sheet

Indemnity principle: a property claim restores the insured to pre-loss financial position, no better; betterment is excluded unless the policy states otherwise.

Insuring Agreement grants coverage; Exclusions remove it; Conditions impose duties; Endorsements amend all three and control over conflicting base-form text.

Replacement cost valuation pays new-for-old up to policy limits; actual cash value (ACV) = replacement cost minus depreciation. Most HO forms pay ACV until repair/replacement occurs.

Coinsurance clause (commercial property): required insurance = coinsurance % × replacement cost at loss time; recovery = (carried ÷ required) × loss, capped at the limit carried.

Deductible application: percentage deductibles (e.g., 2% wind) apply to the Coverage A limit, not the loss amount; named-storm deductibles are triggered by the peril, not damage size.

HO-3 is open-peril on the dwelling and named-peril on personal property; HO-5 is open-peril on both. Flood and earth movement are excluded and require separate policies.

Loss of Use covers additional living expense and fair rental value above normal living costs; it does not pay the mortgage principal or permanent replacement housing purchase.

Additional Coverages (debris removal, trees/shrubs, fire department service charge) sit outside the Coverage A limit unless the form states they are included; read the sublimit language.

Hawaii requires acknowledgement of a claim communication within 15 calendar days; accept or deny within 30 days of receiving proof of loss, extendable for reasonable cause with written notice.

Proof of loss: sworn statement of amount claimed, usually due within 60 days of insurer request; failure can bar the claim unless the insurer waived or was not prejudiced.

Investigation sequence: scene documentation, cause-and-origin determination, coverage analysis, scope of damage, valuation, then negotiation. Coverage is decided before quantum.

Cause and origin distinguishes the peril that triggered loss from pre-existing conditions; long-term leakage, rot, and faulty workmanship are commonly excluded deterioration, not sudden loss.

Water damage: sudden and accidental discharge from plumbing is covered; repeated seepage over 14 days or more is excluded under ISO HO forms. Document the timeline.

Depreciation methods: straight-line for most personal property, age/life tables for roofing and mechanicals. Salvage value is deducted from ACV where the item retains resale value.

Documentation standards: photographs with scale, moisture readings, thermal imaging, itemized Xactimate-style line items, and receipts or comparable pricing for each replacement item.

Appraisal is the contractual remedy for disputes over amount of loss only, not coverage; each party selects a competent appraiser and the two choose an umpire.

A public adjuster represents the insured for compensation; a company or independent adjuster represents the insurer. Dual representation is prohibited.

Hawaii caps public adjuster compensation at 10% of the claim amount paid on claims arising from a declared disaster or emergency; outside those events the fee must be reasonable and disclosed in writing.

The written contract must state the fee or percentage, the services to be performed, the insured's right to rescind, and that the adjuster does not represent the insurer.

Hawaii gives the insured a right to rescind a public adjuster contract within 3 business days after signing; the adjuster must disclose this right conspicuously.

No fee may be charged on policy proceeds the insured would have received without the adjuster's services, such as undisputed emergency advance payments for additional living expense.

Solicitation limits: adjusters may not solicit at the scene of a loss before a reasonable time, and may not misrepresent themselves as insurer representatives or government officials.

File practice: retain a signed contract, authorization, damage inventory, correspondence log, and settlement statement; commingling client funds with operating funds is prohibited.

Compensation is typically a percentage of the net settlement; where the insurer pays policy limits or undisputed amounts, the fee base should exclude those amounts unless the contract states otherwise.

Hawaii Insurance Division (DCCA) licenses producers, adjusters, and insurers; licenses must be renewed and continuing education completed per chapter 431 and Title 16 rules.

Hawaii unfair claim settlement practices (HRS 431:13-103) prohibit misrepresenting policy provisions, failing to act promptly on communications, and refusing to pay without reasonable investigation.

Adjuster licensing: a public adjuster license authorizes representation of insureds for compensation; acting without a license or using an expired license is prohibited.

Fiduciary duty: premiums and claim funds held for others are trust funds; misappropriation is grounds for license revocation and possible criminal referral.

Commissioner authority includes fines, license suspension or revocation, cease-and-desist orders, and restitution orders after notice and hearing.

Recordkeeping: maintain claim files and transaction records for the period required by Hawaii rule (commonly 5 years) and make them available to the Division on request.

Ethical rules bar rebating, twisting, misrepresentation of coverage, and sharing commissions with unlicensed persons; violations are subject to administrative action.

Hurricane and lava risk: Hawaii law governs hurricane deductibles and the Hawaii Property Insurance Association residual market; coverage availability for lava zones is restricted.

Licensees must report administrative actions, criminal convictions, and changes of address to the Insurance Division within the timeframe set by rule.

Continuing education: Hawaii requires licensed adjusters to complete CE hours each renewal cycle, including ethics; lapsed CE can result in license inactivation.

Consumer complaints filed with the Insurance Division trigger an inquiry; respond accurately and within the deadline, as nonresponse itself is a violation.

Advertising and solicitation must identify the adjuster by name and license status; implying government or insurer affiliation is a deceptive practice.

Confidentiality: claim information may be disclosed only as needed for the claim or as required by law; unauthorized disclosure can violate privacy statutes.

Settlement conduct: an adjuster may not advise an insured to accept less than the policy provides, nor draft a release that misstates the settlement amount.

Hawaii prohibits acting as both public adjuster and insurer representative on the same claim; conflicts must be disclosed and the client given written notice.

Policy limits: Coverage A dwelling, B other structures (often 10% of A), C personal property (often 50-70% of A), D loss of use (often 30% of A); sublimits reduce, not add to, the limit.

Replacement cost holdback: insurer pays ACV first and the recoverable depreciation after repair; the insured must complete repairs within the policy's time window (often 180 days, extendable).

Duties after loss: prompt notice, protect property from further damage, cooperate, submit proof of loss, and allow inspection; breach can reduce recovery to the prejudice caused.

Mortgagee clause gives the lender rights to loss payment and to repair; the lender's interest survives even if the insured's claim is denied for acts of the insured.

Concurrent causation: where a covered and excluded peril combine, Hawaii follows the efficient proximate cause doctrine; the dominant cause governs coverage.

Umbrella and excess policies respond after primary limits are exhausted; they follow form and do not broaden coverage unless specifically endorsed.

Reserve setting: initial reserves reflect probable maximum loss; adjust reserves as facts develop and document the rationale for each change.

Scope of repair uses unit pricing per trade (drywall, roofing squares, flooring square feet); overhead and profit is added when three or more trades are required.

Contents valuation separates replacement cost, ACV, and salvage; specialty items such as jewelry and electronics may carry sublimits requiring appraisal or receipts.

Business interruption: measure gross earnings minus continuing expenses plus extra expense; period of indemnity ends at restoration or the policy's 12-month limit.

Subrogation preserves the insurer's right to recover from a negligent third party; the insured must not impair that right by signing a release.

Fraud indicators: inflated inventories, receipts inconsistent with the loss date, prior similar claims, and refusal to allow inspection; refer to the special investigation unit.

Initial client meeting: confirm policy, limits, deductible, and prior claims; explain that the adjuster cannot guarantee a specific settlement amount.

Contingency fee contracts must be in writing, signed by the insured, and provide a copy to the insured at the time of signing.

The adjuster should prepare a documented damage estimate and submit it with the proof of loss; the insurer's estimate is not binding on the insured.

Negotiation leverage comes from documentation: code-upgrade requirements, matching of undamaged materials, and ordinance-or-law coverage where endorsed.

If the insurer invokes appraisal, the public adjuster may prepare the insured's appraiser but cannot serve as umpire or as the insurer's appraiser.

Termination: the insured may cancel per the contract and Hawaii rescission right; fees earned before cancellation must be justified by documented services.

HRS chapter 431 governs insurance code provisions; chapter 432 covers mutual and reciprocal insurers; Title 16 of the Hawaii Administrative Rules contains licensing details.

The Insurance Commissioner is appointed and heads the Division of Financial Institutions' insurance branch within DCCA; the Commissioner adopts rules and holds hearings.

Hawaii's unfair trade practice statute prohibits misrepresentation, false advertising, boycott, coercion, and unfair discrimination in underwriting.

Premium finance, surplus lines, and captive insurance have separate Hawaii rules; a public adjuster should confirm the insurer's authority to do business in the state.

Penalties: administrative fines per violation, license revocation, and restitution; knowing violations may also be prosecuted under Hawaii criminal law.

Licensees must cooperate with Division examinations and produce records; obstruction is itself a separate violation subject to sanction.

Pre-licensing education and exam are required before an adjuster license is issued; fingerprinting and background checks apply to applicants.

Appointments: an adjuster may need to be appointed by an insurer or adjusting firm depending on license type; public adjusters operate independently.

Nonresident adjusters may obtain a Hawaii license, often through reciprocity; they remain subject to Hawaii statutes and rules for Hawaii claims.

Ethics: place the client's interest above the adjuster's fee, avoid conflicts, and document advice given so the file reflects the basis for each recommendation.

Prohibited conduct includes forging signatures, backdating documents, altering photographs, and submitting estimates for damage that was not observed.

Reporting obligations: suspected fraud must be reported to the insurer and may be referred to the Insurance Division's fraud unit; false reporting is itself a violation.

ACV = replacement cost − depreciation; depreciation reflects age, condition, and useful life remaining.

Coinsurance penalty formula: (limit carried ÷ limit required) × loss = recovery, never exceeding the limit carried.

Loss of use payment = additional living expense incurred − normal living expenses the insured would have incurred.

Replacement cost settlement = repair cost + ordinance-or-law upgrades allowed by endorsement − deductible, capped at Coverage A limit.

Day 0 notice of loss → acknowledge within 15 calendar days; request proof of loss with a specified due date.

Proof of loss received → accept or deny within 30 days, or send written notice of extension stating the reason.

Payment due promptly after settlement agreement; unreasonable delay is an unfair claim practice under HRS 431:13-103.

Appraisal demand should be in writing; each party pays its appraiser and shares the umpire cost equally.

Declared disaster or emergency: fee capped at 10% of the claim amount paid; the cap does not apply to ordinary claims but fees must still be reasonable.

Fee base should be the net settlement attributable to the adjuster's work; undisputed amounts paid without that work are excluded.

Contract must disclose the percentage, the method of calculation, and the insured's 3-business-day rescission right.

No advance fees may be collected before services are rendered unless the contract and Hawaii law permit it.

License types include producer, public adjuster, independent adjuster, and surplus lines broker; each has separate qualification and CE requirements.

Renewal requires completing required CE hours, including ethics, and paying the renewal fee before the expiration date.

Continuing education providers must be approved by the Division; unapproved courses do not count toward renewal.

Address and name changes must be reported promptly; notices sent to the last known address are effective.

Insureds may file complaints with the Insurance Division; the Division may investigate and order corrective action.

Insurers must provide written notice of cancellation or nonrenewal within the statutory period and state the reason.

Hawaii requires disclosure of hurricane deductible amounts and the circumstances that trigger them at policy issuance.

Adjusters may not charge for assisting with a claim that the insurer has already paid in full without the adjuster's involvement.