Ethics, Adjuster Practices, and Consumer Protection
This domain tests the ethical and consumer-protection standards that apply when a public adjuster represents an insured. The exam focuses on loyalty, honest dealing, conflicts of interest, fee transparency, privacy, and the line between adjusting and legal advice.
Ethical practice rules
- The public adjuster represents the insured, not the insurer; the duty is to advocate accurately, not to inflate a claim.
- Avoid conflicts: no undisclosed referral fees, no ownership interest in a repair contractor on the same loss, and no dual representation without disclosure and consent.
- Advertising and solicitation must be truthful; do not promise a specific settlement or imply official authority.
- Protect confidential information and use claim documents only for the engagement.
- Do not give legal advice or negotiate legal rights; refer coverage disputes and bad-faith questions to counsel.
- Keep accurate records and cooperate with the Division of Insurance and lawful inquiries.
Worked example
A restoration contractor offers a public adjuster $5,000 for each homeowner referred after a fire. The adjuster accepts and does not disclose it. That is a conflict and an undisclosed kickback: the referral may steer the insured to a higher-priced contractor, and the adjuster's fee and loyalty are compromised. The correct response is to decline the payment, disclose any existing contractor relationship, and let the insured select the contractor independently.
Traps that cost marks
- Treating the adjuster as the insurer's agent.
- Promising a claim outcome to win the contract.
- Sharing fees with unlicensed solicitors.
- Using claim photos or financial information for marketing.
- Pressuring an insured to sign during an emergency without cancellation notice.