Hawaii Insurance Laws, Rules, and Ethics
Domain 4 - Hawaii Insurance Laws, Rules, and Ethics tests the regulatory frame around public adjusting: licensing by the Hawaii Insurance Division under HRS Chapter 431, Article 9A, continuing education and reporting duties, unfair trade and claim practices under HRS §431:13-103, fraud, privacy, and the ethical limits on advocacy.
Licensing and regulatory duties
Public adjusters must hold a Hawaii license and may not negotiate a claim without one. Maintain the license, complete continuing education, report changes of address and criminal or administrative actions, and avoid unlicensed activity by staff. The Insurance Division enforces the insurance code and may investigate, fine, suspend, or revoke. Advertising must be truthful and include required license information. Keep claim files and financial records available for examination; do not commingle client money with business funds.
Unfair practices and ethics
HRS §431:13-103 prohibits misrepresentation, false advertising, unfair discrimination, rebating, coercion, and unfair claim settlement practices. A public adjuster who pads a claim, submits false invoices, or conceals evidence risks fraud charges and license revocation. Give the insured accurate information, preserve confidentiality, disclose conflicts, and do not give legal advice or draft legal documents. Do not split fees with contractors or unlicensed referrers. Do not tell an insured to ignore the insurer or to sign away rights without explanation.
Worked example
An insured has a $20,000 undisputed emergency repair. A public adjuster says, “Let me inflate the whole claim to $35,000; I'll handle the insurer,” charges 20% on the entire payment, and has no written contract. The problems compound: no contract or rescission notice; a fee on undisputed money; a false claim; possible unlicensed contractor activity if he offers to do the repairs; and an unfair practice. Even if the insured agrees, the agreement does not cure the fraud or the licensing violation. The correct path is a written contract, a disclosed fee tied to the adjuster's recovery, and accurate documentation.
Traps
Do not assume that a fee the market tolerates is legal. Do not ignore Hawaii-specific licensing and reporting. Do not let unlicensed staff negotiate. Do not give legal advice or promise a coverage result. Do not share fees with contractors. Do not treat a disaster as a sales opportunity; solicitation rules and ethics both restrict it.