Hail Claim: Contractor Photos, Fee Splitting, and Suspected Fraud
After a June hail storm, a roofer tells a homeowner, 'Your insurer will pay for a full roof; sign this contingency agreement.' The roofer gives the public adjuster photos showing dents in soft metals and a shingle sample with 12 hits per test square. The insurer's adjuster earlier found 3 hits per square and approved $4,200 for vents and gutters only. The roofer asks the public adjuster to 'use my photos and add 40 squares; I'll split my fee with you.' The public adjuster notices the photos show a different roof color and have no metadata. The homeowner says, 'Just get me a new roof; I don't care how.' The public adjuster has a signed representation contract with the homeowner that includes a 10% contingency fee.
1. Identify the fraud red flags and explain why the roofer's photos are unreliable.
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The red flags include: a roofer soliciting a contingency contract immediately after a storm; a hit count of 12 per square versus the insurer's 3; a request to add 40 squares; an offer to split a fee; photos with a different roof color and no metadata; and a homeowner who says he does not care how the claim is paid. The photos are unreliable because there is no chain of custody, no timestamp, and no proof they depict this roof. The adjuster should not use them. The adjuster should conduct an independent inspection, measure test squares, photograph the actual roof with metadata, and document the roofer's request.
2. What are the public adjuster's reporting obligations in Kansas if fraud is suspected?
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A public adjuster may not present or assist in presenting a false or inflated claim. If the adjuster suspects fraud, Kansas law requires reporting to the Insurance Commissioner's fraud division and, where appropriate, law enforcement. The adjuster should preserve the roofer's photos, the text or email requesting the fee split, and the contingency agreement. The adjuster should not confront the roofer in a way that destroys evidence. A good-faith report is protected; failing to report or continuing to participate exposes the adjuster to license discipline and civil liability.
3. Can the adjuster continue to represent the homeowner? What steps should be taken?
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The adjuster can continue only if the homeowner agrees to a truthful, documented claim. The adjuster should meet with the homeowner, explain that the 12-hit sample and the fee-split request are not usable, and offer to inspect independently. If the homeowner insists on the inflated 40-square claim, the adjuster must withdraw, refund any unearned fee, and send a written termination notice. The adjuster should not split fees with the roofer under any circumstances. The file should document the withdrawal and the fraud report. Continuing representation after notice of a false claim would violate the fiduciary duty and Kansas licensing standards.