ME Public Adjuster cheat sheet

Indemnity: restores insured to pre-loss financial position, no profit; ACV vs. RC limits apply.

Insurable interest: must exist at time of loss in property insurance; otherwise claim is unenforceable.

Utmost good faith: both parties must disclose material facts; concealment or misrepresentation can void coverage.

Aleatory contract: unequal exchange of values; premiums paid may be far less than a covered loss payout.

Contract of adhesion: insurer drafts policy; ambiguities are construed against the insurer (contra proferentem).

Subrogation: after paying a loss, insurer steps into insured's shoes to recover from the negligent third party.

Proximate cause: the initiating, uninterrupted event that sets the loss chain in motion; determines coverage.

Coinsurance formula (property): (Limit carried / Limit required) × Loss = recovery, subject to deductible; applies only when limit is below requirement.

Maine Bureau of Insurance (MBI) regulates adjusters; public adjuster licenses are issued under 24-A M.R.S. Chapter 16.

Public adjuster license requires application, fee, exam, and surety bond or errors & omissions coverage as set by MBI rule.

License renewal: public adjusters renew every two years; continuing education (including ethics) must be completed.

Written contract requirement: public adjuster must use a written contract signed by insured, stating compensation and services.

Fee cap: public adjuster compensation is limited by statute (generally 10% of claim proceeds, with exceptions for declared disasters).

Cancellation right: insured may rescind the public adjuster contract within a statutory period (typically 3 business days) after signing.

Claims practices: Maine Unfair Claims Settlement Practices Act (24-A M.R.S. §2161 et seq.) sets timelines and prohibited acts.

Producer/adjuster distinction: public adjusters represent the insured; company adjusters represent the insurer; no dual representation.

HO-3: open perils on dwelling, named perils on personal property; HO-5: open perils on both.

Replacement cost (RC): repairs with new materials of like kind and quality; Actual Cash Value (ACV) = RC − depreciation.

Deductible: applied per occurrence; some policies apply separate wind/hail or hurricane deductibles stated as a percentage of dwelling limit.

Liability coverage (Section II): pays sums insured becomes legally obligated to pay due to bodily injury or property damage; defense costs outside limit.

Commercial property causes of loss forms: Basic (named), Broad (named plus weight of ice/snow, water damage), Special (open perils).

Business income: pays net income loss plus continuing expenses during restoration period, subject to a 72-hour waiting period in many forms.

Flood is excluded under standard property policies; coverage requires a separate flood policy (NFIP or private).

Ordinance or law, earth movement, and wear and tear are common exclusions requiring endorsement or separate coverage.

First notice of loss: record date/time, cause, location, and contact; acknowledge promptly per state claim practice rules.

Investigation: inspect loss site, photograph, diagram, secure evidence, obtain non-waiver agreement or reservation of rights if coverage is doubtful.

Proof of loss: sworn statement of amounts claimed; policy sets deadline (often 60 days after insurer request).

Damage valuation: use Xactimate or similar estimating software; separate RC and ACV columns; document depreciation rationale.

Salvage and subrogation: preserve salvage value; identify third-party liability and issue subrogation demand before statute of limitations.

Reservation of rights: written notice that insurer is investigating under a coverage question without waiving denial rights.

Bad faith exposure: unreasonable delay or low offers can trigger unfair claim practice penalties and extra-contractual liability.

File documentation: every contact, decision, and payment must be dated and attributed; the claim file is discoverable evidence.

Fiduciary duty: public adjuster acts solely for the insured; must not accept compensation from the insurer or contractors.

Duty to prepare and document: inventory damaged property, obtain repair estimates, and assemble the claim package for the insured.

Duty to negotiate: present the claim to the insurer and advocate for the insured's interest, but cannot bind the insured without authority.

Duty to account: maintain records of all funds received on behalf of the insured and provide an accounting upon request.

Duty to disclose: must disclose any financial interest in repair contractors or vendors and obtain insured's written consent.

Duty to cooperate: must not obstruct the insurer's investigation; misrepresentation of a claim is grounds for license discipline.

Duty to maintain confidentiality: protect insured's personal and financial information obtained during representation.

Duty to notify: public adjuster must provide the insured with a copy of the signed contract and any notices required by MBI.

Written contract must include: names and license numbers, services to be performed, fee or fee method, and cancellation rights.

Fee must be reasonable and disclosed; contingent fee cannot exceed statutory cap (e.g., 10% in Maine, except declared disasters).

No advance fees for claim services beyond actual expenses; must be documented and refundable if unearned.

Prohibited conduct: misrepresentation, forgery, coercion, fee splitting with unlicensed persons, and solicitation at a loss scene.

Cancellation: insured may cancel within 3 business days of signing without penalty; written notice required.

Conflicts of interest: public adjuster cannot represent both insured and insurer on the same claim, nor own an interest in the damaged property.

Recordkeeping: retain contract, claim file, and accounting records for at least the period required by MBI rule (typically 5 years).

Advertising: must not use false or misleading statements, imply official affiliation, or guarantee a specific claim outcome.