Claims Adjusting Practices and Ethical Responsibilities
Handling the claim
Report promptly, acknowledge, investigate, document. The core sequence is notice, investigation (recorded statement, photographs, scene inspection), damage assessment (scope, quantities, pricing, depreciation), coverage analysis, proof of loss, payment, and salvage or subrogation follow-up. A public adjuster should build a documented and defensible scope of loss, keep the insured informed at each stage, and never guarantee a specific settlement figure.
Illinois unfair claims settlement practices rules (50 Ill. Adm. Code Part 9190, implementing 215 ILCS 5/154.6) require prompt acknowledgment of a claim, a reasonable investigation, and a decision within the statutory period after proof of loss, with denials explained in writing. Prohibited practices include misrepresenting policy provisions, failing to act promptly on communications, refusing to pay without a reasonable investigation, failing to attempt a good-faith settlement when liability is clear, and failing to explain a denial.
Ethics for the public adjuster
Fiduciary duty to the client and undivided loyalty: no dual representation, no conflicts of interest, no kickbacks or fee-splitting with contractors, no buying the insured's salvage or claim, and confidentiality. Do not practice law - explain the policy and the claim, but refer legal questions to counsel. Settle only with the client's authority, disclose compensation fully, and never endorse deductible absorption.
Worked example
A contractor offers to cover the homeowner's $5,000 deductible in exchange for the job. Rule of thumb: refuse and document the refusal. The promise is a misrepresentation to the insurer that can void coverage, and an adjuster who facilitates it risks license discipline and fraud exposure.