Public Adjuster Regulation and Ethics
Licensing and contracts
Maryland requires a public adjuster to be licensed by the MIA. A public adjuster represents the insured, not the insurer, and may not act as a company or independent adjuster on the same claim. The engagement must be in writing, signed by the insured, state the compensation, and a copy must be given to the insured. Fees are typically a percentage of the recovery and must be disclosed before the contract is signed.
Ethical duties
- Fiduciary duty: put the insured's interest above the adjuster's fee.
- Honesty: never inflate a claim, absorb a deductible, or misrepresent policy terms.
- Competence: know the policy, the cause of loss, and the valuation method.
- Confidentiality: protect claim and personal information.
- Conflict avoidance: do not steer repairs to a business you own or profit from without full disclosure and compliance with Maryland law.
Worked example
A roofer offers to "handle the insurance claim" for a 20% fee and also perform the repairs. This creates a conflict and may amount to unlicensed public adjusting if the roofer is not licensed. The insured should sign a written public adjuster contract with a licensed adjuster, and the repair contract should be separate. Absorbing the deductible to make the deal work is claim fraud, not customer service.
Traps that cost marks
- Charging a fee without a signed written contract.
- Acting as both contractor and public adjuster on the same loss.
- Soliciting a distressed insured at the loss scene in a coercive way.
- Promising a specific settlement amount before the policy and damages are reviewed.