HI Public Adjuster common mistakes
HI Public Adjuster · Understand the traps and how to avoid them.
Treating the policy as a single 'coverage' question and answering whether the loss is 'covered' without walking through the coverage grant, exclusions, conditions, and limits in order, or without separating property coverage from time-element (ALE) and liability parts of the homeowners form.
Candidates study coverage in broad strokes and rely on the intuitive sense that a fire or hurricane loss 'should be covered,' so they skip the sequential policy-analysis method and miss that an exclusion or unmet condition (deductible, duties after loss, vacancy) can defeat an otherwise granted peril.
What to do instead
Practice a written four-step drill on every sample loss: (1) identify the insured property and the peril and confirm the coverage grant applies; (2) test each potentially applicable exclusion with its exception; (3) confirm conditions precedent and duties after loss were met; (4) apply limits, deductibles, and coinsurance or valuation clauses. Do this on paper until it is automatic, and always state which policy part supports the conclusion.
Confusing replacement cost, actual cash value, and functional/obsolescence adjustments, and applying depreciation to items or costs that are not depreciable (labor, non-recoverable depreciation on certain items, or applying ACV when the policy provides RCV subject to holdback).
The terms sound interchangeable in everyday use, and candidates memorize definitions without practicing the arithmetic or the policy language that conditions RCV on repair or replacement within a stated period.
What to do instead
Work numerical loss scenarios end to end: compute ACV as RCV minus depreciation, track recoverable versus non-recoverable depreciation, and state the holdback amount and the deadline for recovery. Memorize the exact policy conditions that trigger RCV payment and note that labor and certain fees are typically not depreciated.
Failing to document the claim file with a written, dated activity log and instead relying on memory or verbal summaries when answering questions about claim handling standards, timely communication, or proof-of-loss timelines.
Candidates treat claims handling as a narrative skill rather than a compliance function, so they overlook that fair-claims-settlement and recordkeeping requirements turn on documented dates, notices, and responses.
What to do instead
For every scenario question, identify the specific date-driven obligation: acknowledgment of the claim, status updates, proof-of-loss request and deadline, and the insurer's decision timeline. Practice writing file notes as if they will be audited, and answer questions by citing the documented step that was missed rather than a general impression of unfairness.
Accepting the insurer's damage estimate or the adjuster's scope as the starting point for valuation instead of independently measuring, photographing, and pricing the loss, and failing to reconcile quantity, quality, and code-upgrade differences line by line.
Candidates assume the carrier's estimate is authoritative and lack practice building a competing scope, so they cannot articulate where the two estimates diverge and why.
What to do instead
Build a habit of independent scope development: room-by-room measurements, moisture or damage documentation, photographs with scale, and a line-item comparison spreadsheet mapping each disputed item to evidence and to the policy provision that requires it (including ordinance-or-law coverage). Present differences as quantified line items, not adjectives.
Misunderstanding the public adjuster's compensation rules: charging a fee based on the gross claim rather than the net recovery, taking compensation before the claim is paid, or failing to put the compensation terms in a written contract signed by the insured.
Compensation is often learned from informal practice rather than the statute, and candidates confuse the base to which the percentage applies or forget the timing and contract-form requirements.
What to do instead
Memorize the statutory compensation formula and its base (net proceeds attributable to the adjuster's services), the prohibition on collecting before proceeds are received, and the requirement for a written, signed contract with conspicuous disclosure of terms and the right to rescind. Practice computing fees on a sample settlement net of deductible and prior payments.
Soliciting or signing a client during the early post-loss period without checking the statutory solicitation restrictions, or using contract language and disclosures that do not match the required form.
Candidates focus on the technical adjusting work and treat business development as unregulated, missing that solicitation timing and contract content are expressly restricted to protect distressed insureds.
What to do instead
Learn the solicitation window and prohibited conduct rules as a checklist, and review a sample public adjusting contract against each required element (services, fee, cancellation/rescission right, disclosures). When a question describes door-knocking or outreach right after a loss, test it against the solicitation restriction before analyzing anything else.
Acting as an unlicensed adjuster or mischaracterizing the license type needed - for example, negotiating or settling a claim without the public adjuster license, or assuming a license from another state transfers automatically.
Candidates conflate company/staff adjuster, independent adjuster, and public adjuster licensing categories, and assume reciprocity or endorsement is automatic rather than requiring application and approval.
What to do instead
Build a comparison table of license categories: who they represent, what activities they may perform, appointment or sponsorship requirements, and how nonresident licensing works. For each scenario, first ask 'whose interests does this person represent?' and 'is the license held or exempt?' before reaching the conduct question.
Ignoring continuing-education, reporting, and record-retention obligations, or answering ethics questions by intent ('I meant to help the insured') rather than by the specific prohibited-act standard.
Candidates treat compliance as a one-time licensing event and ethics as a matter of good character, so they miss concrete duties such as CE hours, notification of address or disciplinary changes, and the enumerated unfair or deceptive practices.
What to do instead
Maintain a compliance calendar of CE deadlines, renewal dates, and change-notification duties, and study the enumerated prohibited practices (misrepresentation, commingling funds, conflicts of interest, unauthorized settlement) so each can be recognized as a named violation. Answer ethics items by naming the specific prohibited act and the duty breached.
Overlooking Hawaii-specific perils and policy features - hurricane and lava/volcanic activity coverage, hurricane deductibles and their triggers, and the interaction of federal flood coverage with homeowners policies - and answering with mainland assumptions.
Most study material is written for continental risks, so candidates apply generic wind, hail, and winter-peril frameworks and miss island-specific exclusions, deductible mechanics, and the flood-versus-storm-surge distinction.
What to do instead
Create a Hawaii-specific one-page reference covering hurricane deductible triggers and how they are calculated, treatment of lava and volcanic activity, flood versus storm surge under the NFIP and homeowners forms, and any state-specific coverage or disclosure requirements. Re-read it before every practice set and flag any question involving wind, water, or volcanic peril.
Failing to identify conflicts of interest and prohibited dual roles - such as representing both the insured and another party, receiving undisclosed compensation from a contractor or vendor, or handling a claim in which the adjuster has a financial interest.
Candidates see the public adjuster as the insured's advocate and therefore assume advocacy is always permitted, missing that undisclosed referral fees, contractor kickbacks, and dual representation are expressly prohibited and can also create liability for the insured's settlement.
What to do instead
For every scenario, list all parties with a financial interest and ask whether any undisclosed benefit flows to the adjuster. Memorize the prohibition on sharing compensation with unlicensed persons and on conflicts of interest, and practice disclosing in writing any relationship with a restoration contractor or vendor before recommending them.