MA Public Adjuster cheat sheet

Indemnity principle: property insurance restores the insured to pre-loss financial position, never to a better one; valued policies are the exception.

Insurable interest must exist at the time of loss for property coverage; in Massachusetts, a buyer under a purchase-and-sale agreement can have an insurable interest before closing.

Actual cash value (ACV) = replacement cost less depreciation; Massachusetts does not mandate a single ACV formula, so the policy definition controls.

Replacement cost coverage pays to repair or replace with new materials of like kind and quality, typically capped at the policy limit and conditioned on actual repair or replacement.

Coinsurance clause: if the limit carried is less than the required percentage of value, the claim payment is reduced by the ratio (limit carried / limit required).

Deductibles apply per occurrence unless the policy states otherwise; separate wind, hail, or hurricane deductibles may be expressed as a percentage of the dwelling limit.

Common exclusions: intentional loss, neglect, ordinance or law, earth movement, flood, and wear and tear; endorsements can buy back some exclusions.

Loss payment options in a homeowners policy: repair, replace, rebuild, or pay the actual cash value; the insurer chooses among them.

Massachusetts requires insurers to offer at least $250,000 of uninsured/underinsured motorist coverage on private passenger auto policies unless the insured rejects it in writing.

M.G.L. c. 175, § 172 governs public adjusters: a license is required from the Massachusetts Division of Insurance before soliciting, negotiating, or effecting a claim adjustment for compensation.

A public adjuster contract must be in writing, signed by the insured, and disclose the fee or commission; Massachusetts caps the fee at 10% of the amount recovered on claims arising from a declared disaster or emergency.

Public adjusters may not represent both the insured and the insurer on the same claim and may not act as a contractor on a loss they adjust.

No public adjuster may solicit a claim on the day of a loss or before the insured has had a reasonable opportunity to consult with the insurer; solicitation at a loss scene is restricted.

M.G.L. c. 93A and 211 CMR 120.00 (Unfair Claims Settlement Practices) require prompt investigation, fair settlement offers, and written explanations for denial.

Massachusetts requires insurers to acknowledge a claim within a reasonable time and to pay undisputed amounts promptly; 211 CMR 120.03 defines specific unfair practices.

Public adjuster license applications require proof of competence and a surety bond or errors and omissions coverage as set by Division regulation.

Records of each claim, including contracts, correspondence, and fee calculations, must be kept and made available to the Division on request.

A public adjuster may not advance money to an insured as an inducement to sign a representation contract.

First notice of loss: record date, time, cause, and reporter; preserve the loss scene and advise the insured to mitigate further damage.

Determine the cause of loss (peril) and confirm it is not excluded; concurrent causation requires policy-specific analysis.

Document damage with photographs, measurements, moisture readings, and a room-by-room inventory before repairs begin.

Compare pre-loss condition records (listing photos, prior inspections, maintenance logs) with post-loss damage to separate pre-existing from new damage.

For water losses, trace the source; long-term seepage and repeated leakage are commonly excluded, while sudden accidental discharge is typically covered.

Use a cause-and-origin report for fire losses and an engineer's report for structural or foundation claims.

Salvage and subrogation: identify recoverable property and third parties responsible; preserve evidence and notify the insurer promptly.

Proof of loss: a sworn statement of the amount claimed, supported by inventories, receipts, and estimates, usually due within 60 days of the insurer's request.

Line-item estimating uses unit costs (quantity × unit price) plus overhead and profit; Xactimate and similar platforms use standardized price lists by ZIP code.

Depreciation = replacement cost × (age / expected useful life); recoverable depreciation is released when repair or replacement is completed and documented.

Betterment and matching: Massachusetts practice often requires matching undamaged materials where a reasonable match is unavailable, but policy language controls.

General contractor overhead and profit (O&P) is typically added when three or more trades are involved or the loss is complex.

Documentation package: contract, proof of loss, photographs, estimates, receipts, inventory, and correspondence; each item should be dated and tied to a line item.

For total losses, valuation may use market comparables, appraisal, or the policy's valuation clause; Massachusetts auto total losses use actual cash value with comparable vehicle data.

Business interruption: lost net income plus continuing expenses, measured over the period of restoration, subject to the policy's waiting period and limit.

Appraisal clause: if the insurer and insured disagree on the amount of loss, either may demand appraisal; each selects a competent appraiser and the two choose an umpire.

Fiduciary duty: a public adjuster owes loyalty to the insured, must avoid conflicts of interest, and must not accept compensation from contractors or vendors on the same claim.

Prohibited conduct includes misrepresenting policy coverage, altering documents, and charging fees not disclosed in the written contract.

Massachusetts 211 CMR 120.00 prohibits misrepresentation of policy provisions, unreasonable delay, and failure to explain a denial in writing.

M.G.L. c. 93A provides for multiple damages and attorney's fees for unfair or deceptive acts in trade or commerce, including claims handling.

Communicate in writing; keep a claim diary of all contacts, offers, and payments; provide the insured copies of all documents submitted to the insurer.

Do not negotiate with an insured who is represented by counsel without counsel's consent.

Privacy: protect the insured's personal and financial information; share it only as necessary for the claim.

Referral fees to contractors, restoration firms, or attorneys for claim-related work are prohibited unless permitted by law and disclosed.

If an error occurs, disclose it promptly to the insured and the insurer; concealment can constitute a licensing violation.