Public Adjuster Practices, Ethics, and Consumer Protection
Public adjuster conduct and consumer protection
A public adjuster works for the insured, not the insurer, and must put the client’s interest ahead of the fee. Kentucky expects licensed conduct, truthful solicitation, written contracts, clear fee terms, and no misrepresentation of policy coverage or claim outcomes. The adjuster should explain that the fee is contingent on settlement unless the contract states otherwise, identify the insurer and claim number, and avoid conflicts such as representing both the insured and a contractor with a financial stake in the repair. Public adjusters may not give legal advice, negotiate liability claims unless licensed for that line, or settle without authority. Consumer protection concerns include high-pressure solicitations, blank contracts, undisclosed fees, false “guarantees,” and misuse of claim funds. KRS 304.12-230 also reaches unfair claim settlement conduct, and the DOI can discipline licensees.
Worked example
A public adjuster tells a homeowner, “Sign this blank contract; I guarantee the insurer will pay your full policy limit.” The statement misrepresents the claim outcome, the blank contract hides the fee and scope, and the guarantee cannot be made. The adjuster should provide a completed contract with the fee percentage, cancellation rights, and services, and should explain that payment depends on coverage and proof. If the adjuster also owns the repair company, the conflict must be disclosed and handled under Kentucky law.
Traps
Do not promise a specific settlement. Do not take a fee before a written contract. Do not act as the insured’s lawyer. Do not confuse a public adjuster’s advocacy with authority to bind the insurer.