Ethical Practices, Contract Requirements, and Prohibited Conduct
What this domain tests
This domain tests the public adjuster's fiduciary posture toward the insured and the specific contract and conduct rules that convert a good intention into a lawful file.
The written contract
The agreement must be in writing, dated, and signed by the insured, and must identify the adjuster and firm with license number, the policy and claim, and the services to be performed. Compensation must be stated as a specific percentage or a flat amount - never blank, never open-ended. The contract must state that the public adjuster is not an insurer representative and is not recommended by the insurer, and it must include the insured's statutory notice of the right to rescind within a short window after signing. The insured receives a copy.
Prohibited conduct
- Soliciting at a loss scene, during prohibited hours, or in ways the statute forbids during a declared emergency.
- Misrepresenting credentials, implying a government or insurer connection, or promising a specific settlement figure.
- Sharing, splitting, or rebating fees with unlicensed persons or lead sources.
- Accepting compensation from an insurer on a claim the adjuster handles.
- Acting as contractor or repair vendor on the same loss, advancing money to the insured, or taking an assignment of the claim.
- Absorbing, waiving, or paying the insured's deductible to win the job.
- Signing documents for the insured without written authorization.
Fiduciary practice
The adjuster owes the insured undivided loyalty: disclose every fee and referral relationship, keep claim funds handling out of the adjuster's own accounts, protect confidentiality, retain claim files for LDI examination, and cooperate fully with Department inquiries and complaints.
Worked example
A roofer offers to route storm-damaged homeowners to an adjuster in exchange for half the fee, and adds that his crew can do the repairs. Two separate violations arise: fee sharing with an unlicensed person, and the dual role of adjuster and contractor on the same loss. Accepting would jeopardize the license regardless of how the claim turned out.
Traps
Verbal or blank-fee contracts; collecting a fee before the claim pays; advertising without the license number; and dressing up a deductible waiver as a discount.