Illinois Insurance Laws, Rules, and Regulations Pertaining to Public Adjusters
Who is a public adjuster in Illinois
A public adjuster is a person who, for compensation, acts on behalf of an insured - never the insurer - to prepare, present, negotiate, or settle a first-party property claim. Illinois licenses these individuals under the Public Adjusters Law (215 ILCS 5/1501 et seq.) and the rules at 50 Ill. Adm. Code Part 3118, administered by the Illinois Department of Insurance (IDOI). Applicants must satisfy the statutory age, character, examination, education, and filing requirements, and licenses must be maintained and renewed. Knowing which title belongs to which side is the most heavily tested idea in this domain: company adjusters and independent adjusters act for insurers, public adjusters act for insureds, and producers sell and service policies.
Compliance duties candidates must know
- A written contract signed by the adjuster and the insured, stating the services, the compensation, and the insured's cancellation right; the insured must receive a copy.
- Compensation is limited by statute and is calculated on the amount actually recovered, never on the policy limit or the amount originally demanded.
- No dual representation of insured and insurer on the same claim, no acquiring an interest in the claim or in salvage, and no fee-splitting or commissions paid to unlicensed persons such as roofers or restoration contractors.
- Truthful identification: license number on contracts and advertising, and no implication that the adjuster is an insurer representative or a government agent.
- Careful solicitation: an adjuster who initiates contact at a loss site or during a declared emergency must be able to show the contact complied with the statute.
Worked example
A roofing company tells a homeowner it will handle everything with the insurance company for 20% of the settlement. That is unlicensed public adjusting. A licensed public adjuster who partners with that roofer and shares the claim fee commits fee-splitting. Both violations expose the licensee to suspension, revocation, and civil penalties.