Expired License, a 15% Fee, and a Roofing Company
In April, a hailstorm damaged homes in a central Indiana subdivision. Dana, whose Indiana public adjuster license expired 45 days earlier, knocks on the door of 82-year-old Ruth at 9:15 p.m. and offers to handle her roof claim. Dana presents a one-page contract calling for 15% of "any money obtained from the insurer." The contract has no three-business-day cancellation notice and no statement that Dana does not represent the insurer. Ruth signs. Dana also owns a roofing company and tells Ruth, "My crew can start Tuesday." The insurer later offers $48,000 for the roof and gutters. Ruth's son, who holds her power of attorney, calls you, a licensed public adjuster, asking whether the contract is enforceable and what should happen next.
1. Identify the Indiana licensing and contract problems in Dana's engagement and determine whether Ruth must pay the 15% fee.
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Dana's license expired before she solicited and signed Ruth, so she was not licensed when she acted as a public adjuster. Indiana requires a public adjuster license before soliciting, negotiating, or settling a first-party claim. A contract signed by an unlicensed person is unlawful and generally unenforceable, and the adjuster may face administrative penalties and disgorgement. Even if Dana had been licensed, Indiana caps public adjuster compensation at 10% of the amount of the insurance settlement; 15% exceeds that cap. The contract also lacks required disclosures: the insured's right to cancel within three business days and a statement that the public adjuster is not an agent of the insurer. A compliant contract must be written, dated, signed, specify the fee, and include the cancellation notice. Ruth should not pay 15%. Her son should demand a copy of the contract and any payments, cancel in writing, and report Dana to the Indiana Department of Insurance. A new contract with a properly licensed adjuster should be used if Ruth still wants representation.
2. Explain the conflict created by Dana's ownership of the roofing company and how the fee and repair work should be handled.
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A public adjuster owes the insured loyalty and must avoid conflicts of interest. Dana's roofing company creates a direct conflict because she can increase repair revenue by inflating or directing the scope, and she has a financial interest in the repair contract. Indiana's public adjuster statute and ethics rules restrict a public adjuster from having a financial interest in repairs to the damaged property and from using the adjuster relationship to steer the insured to a business the adjuster owns without full written disclosure and the insured's independent consent. Even with disclosure, the safest course is separation: the adjuster negotiates the claim, and the insured obtains competitive bids and chooses the contractor. Dana cannot charge 15%, and she cannot deduct contractor profit from the settlement. Any money already received should be accounted for and returned as appropriate. Ruth should be told in writing that the repair contract is separate, is not required as a condition of the claim, and that she may use any licensed contractor.
3. What should a compliant public adjuster do to put Ruth's claim back on track?
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The new adjuster should first obtain Ruth's written authorization and a copy of the prior contract, then send a written cancellation and request for accounting to Dana. Next, review the policy declarations, the date of loss, coverage limits, deductibles, and any endorsements. Inspect the roof and document the hail damage with photographs, measurements, and a detailed scope, including gutters, flashing, vents, and permits. Confirm whether the insurer's $48,000 offer reflects replacement cost or actual cash value and whether recoverable depreciation is being withheld. The adjuster should not promise a specific result, should explain the fee in writing, and should avoid any repair referral that creates a conflict. If Dana has already been paid, the adjuster should help Ruth demand a refund and preserve a complaint with the Department of Insurance. The file should document every communication because the prior unlicensed contract may affect the claim timeline.