MD Public Adjuster common mistakes
MD Public Adjuster · Understand the traps and how to avoid them.
On any 'how much is recoverable' question, the candidate applies depreciation and answers with actual cash value even though the policy's Loss Settlement clause provides replacement cost.
Indemnity gets memorized as a one-line slogan ('indemnity means ACV') and the valuation provision is never re-read before the math is done.
What to do instead
Locate the Loss Settlement / valuation clause first and label the method the policy actually uses (ACV, replacement cost, functional replacement cost, agreed value). Treat indemnity as the ceiling principle and replacement cost as a contractual exception that normally requires the property to be actually repaired or replaced, with depreciation held back until then.
Answering that an insured whose building burned because of a negligent third party cannot collect from their own insurer until the third party pays, or that the insured forfeits the deductible once the insurer subrogates.
Subrogation is memorized as 'the insurer stands in the insured's shoes' without learning the sequence of payment, so the doctrine is applied backwards.
What to do instead
Fix the order in your notes: the first-party claim is paid under the policy; the deductible is part of the insured's own loss; subrogation transfers to the insurer only what it actually paid. The insured need not wait for the tortfeasor and may not double-recover, but can pursue the uninsured deductible separately.
Computing a coinsurance penalty as (limit divided by value) times loss and stopping there, or subtracting the deductible before applying the ratio.
The formula is memorized as a bare fraction without the required-insurance step or the order of operations, and candidates do not check whether the policy measures coinsurance against value at risk or against the limit.
What to do instead
Use one fixed worksheet every time: (1) value at risk, (2) required insurance = coinsurance percentage times value, (3) compare limit to required, (4) if underinsured, payment = (limit divided by required) times loss, (5) subtract the deductible last. State the required amount explicitly before touching the calculator.
Denying or paying a hurricane or storm claim in full without itemizing wind damage versus storm-surge or surface-water damage, or assuming the homeowners policy covers water that entered through a roof opening or a broken window.
Flood is mentally filed as 'rising water only,' so the water-damage exclusion, the separate flood policy requirement, and any anti-concurrent-causation lead-in are never actually read on the page.
What to do instead
Read the water-damage exclusion and any anti-concurrent-causation wording verbatim, then separate the loss by peril: wind-created opening is a covered peril, surface water and surge are excluded and belong to a flood policy. Document the physical evidence of how water entered for each item rather than treating the whole loss as one event.
Treating 'personal injury' and 'bodily injury' as interchangeable, so a libel or wrongful-eviction claim is analyzed under bodily injury, or a slip-and-fall is described as a personal injury claim.
Everyday usage of 'injury' blurs the two defined terms, and both appear in the same liability section of the policy.
What to do instead
Memorize the two definitions as separate lists before reading the coverage grant: bodily injury means physical harm, sickness, or disease, including death; personal injury means libel, slander, invasion of privacy, false arrest, wrongful eviction, and similar offenses. Match the alleged act to the correct defined term, then check whether the offense was committed in the course of the insured's business.
Submitting a one-line, lump-sum estimate with no photographs and no room-by-room or item-by-item inventory, then claiming full replacement cost on items that were never repaired or replaced.
The candidate focuses on the negotiation number instead of building a defensible scope, and replacement cost is treated as the default entitlement rather than a condition to be satisfied.
What to do instead
Build the file in the order an examiner expects: cause and origin narrative, photographs, measurements, a room-by-room or item-by-item inventory with quantities and unit costs, an ACV column and an RCV column, notes on pre-existing damage or undamaged property, and a holdback schedule showing what is released only on documented repair or replacement.
Concluding that late notice of loss, a missing proof of loss, or a delay in mitigation automatically bars the claim, without analyzing what the insurer actually lost by the delay.
The 'conditions precedent' idea is applied as a bright-line rule, and each post-loss duty is memorized as a trap rather than as an obligation tested against the insurer's prejudice.
What to do instead
Walk through each post-loss duty separately - prompt notice, protection of property, cooperation, records, examination under oath, sworn proof of loss - and ask what the insurer was prevented from doing. Note that reasonable and necessary expenses to protect property from further damage are generally recoverable, and that substantial compliance and prejudice, not just calendar dates, decide most disputed-condition questions.
Advising the insured that filing a complaint with the Maryland Insurance Administration will force the carrier to pay the disputed amount, or that the Commissioner will rule on what the policy covers.
The regulator, the adjuster, and the courts are collapsed into one actor, so the complaint process is mistaken for an adjudication of the contract.
What to do instead
Separate the roles: the Maryland Insurance Administration regulates market conduct and licenses producers and adjusters under the Insurance Article, and can investigate and act on unfair claim settlement practices, but it does not decide the amount owed on a disputed claim. Coverage and valuation disputes are resolved through the policy's appraisal provision, negotiation, or the courts - so the file must be documented as litigation-ready evidence.
Beginning to negotiate with the carrier, or signing a representation, before a written fee agreement is executed, and then charging a percentage of the whole settlement, including amounts the insured recovered without the adjuster's help.
The relationship is treated as a handshake engagement because the loss is urgent, and the compensation clause is read as 'a percentage of the claim' rather than 'a percentage of the recovery obtained through the adjuster's efforts.'
What to do instead
Paper first, always: an active Maryland public adjuster license, a written contract stating the fee or percentage, the services to be performed, and the insured's cancellation rights, all signed and disclosed before any contact with the insurer on the claim. Invoice only against the additional recovery attributable to the adjuster's work, show the calculation on the invoice, and document the insured's approval of anything taken from an undisputed payment.
Inflating line items - betterment, undamaged property, non-owned items, retail markups with no support - to create negotiating room, then defending the inflated number to the carrier and the insured.
The candidate confuses advocacy with hard bargaining and believes an overstated opening position is a normal adjuster tactic, without weighing the licensing and good-faith consequences in Maryland.
What to do instead
Tie every line item to a covered peril, a documented observation, and a supportable unit cost. Where you believe an item is arguable, list it separately as a disputed item with the reason, rather than embedding it in the total. Misrepresenting damages to an insurer is not advocacy - it exposes the adjuster to license discipline and destroys credibility on the items that are legitimately owed.