The Roofing Contractor Who Wants to "Handle the Claim"
On June 12 a hailstorm damages roofs across a Rockford subdivision. Within 36 hours a roofer, Summit Exteriors, has homeowner Dana sign a one-page "Contingency and Authorization" naming Summit as her "exclusive claims representative," authorizing it to "negotiate, adjust and settle" her hail claim, and setting its fee at 15% of "all insurance proceeds." Summit's owner holds no adjuster license of any kind. Summit also tells Dana not to speak with her insurer's adjuster unless a Summit representative is present. Ten days later Dana's brother, a licensed Illinois public adjuster, reviews the paper and offers to take over. Summit proposes to "stay on as consultant" if the public adjuster splits the 15%.
1. Does Summit's conduct require an Illinois public adjuster license, and what is the likely status of the 15% fee agreement?
Read the worked answer
Analyze the statutory elements, not the label. Illinois licenses persons who, for compensation, act on behalf of an insured to investigate, negotiate, or settle a first-party claim. Summit's fee is compensation; the work is on Dana's side of the table; the claim is first-party hail damage. Calling itself a "consultant" or "claims representative" does not change the analysis - substance controls.
Contractors may build, not adjust. A roofer may inspect and supply a scope or bid, but negotiating the settlement for a percentage of proceeds is public adjusting. Unlicensed adjusting is a violation enforced by the Illinois Department of Insurance, and the fee agreement is generally unenforceable as against public policy, so the insured is entitled to the return of amounts paid.
Bottom line: Summit must be licensed to do what the contract authorizes; its 15% is subject to refund; and the insured should be told in writing that the authorization does not give Summit the right to settle anything.
2. How should the licensed public adjuster respond to Summit's proposal to split the 15%?
Read the worked answer
Decline, in writing, and do not structure around it. Compensation for soliciting or adjusting an insured's claim may go only to a properly licensed person; paying a commission, kickback, or referral share to an unlicensed contractor is prohibited and is treated as an unfair trade practice. A "consulting" arrangement that funnels claim dollars to the unlicensed party is the same prohibited split with a new label.
There is also a conflict problem: Summit's repair profit rises with the size of the claim, so a shared fee ties the adjuster's compensation to a vendor whose incentive is inflation, not indemnity.
The adjuster should offer Dana a compliant written contract signed by the insured, disclose the fee arrangement and the insured's statutory right to rescind the contract during the statutory cancellation period (confirm the exact business-day count in the current statute rather than quoting from memory), and document the refusal in the claim file. If Summit persists in negotiating directly with the carrier, report the unlicensed activity.
3. Dana's insurer schedules its field inspection and Summit says it will attend and "run the meeting." What is the correct handling?
Read the worked answer
The adjuster controls claim communications because the adjuster is the licensed representative of record - authority cannot be delegated to an unlicensed entity. Summit may attend as a vendor to explain its scope and pricing, but it may not question the carrier's adjuster, agree to any scope, or discuss settlement.
Practically: send the carrier written notice of representation and the insured's signed contract; state that Summit attends only as the repair contractor; ask that all coverage and valuation communications come to the adjuster. Keep Summit's estimate as evidence but independently verify quantities and pricing, since the adjuster's duty of good faith runs to the insured, not to the contractor's margin.
If Summit tries to negotiate, correct it on the record and note it in the file - the insured's recovery should never depend on an unlicensed party's promises.