Public Adjuster Duties, Ethics, and Contract Requirements
Public Adjuster Duties, Ethics, and Contract Requirements tests the fiduciary and disclosure obligations that separate a public adjuster from an insurer's adjuster. The exam focuses on written contracts, fee transparency, cancellation rights, conflicts of interest, recordkeeping, and prohibited conduct.
Core duties
- Represent the insured alone. The adjuster owes loyalty, confidentiality, and honest accounting of claim funds.
- Use a written contract containing the parties' names, license number, claim location, scope of services, fee or fee method, and the insured's cancellation right.
- Explain that the adjuster is not a lawyer and cannot give legal advice or interpret policy language as legal counsel.
- Keep accurate claim files, correspondence, estimates, and payment records; provide copies to the insured on request.
- Disclose any financial interest in a repair contractor, restoration firm, or other vendor. Referral fees and undisclosed fee-sharing create a conflict.
- Do not misrepresent the insurer, the policy, or the claim; do not solicit at a loss scene in a coercive manner or use high-pressure tactics.
Worked example
An adjuster signs a contract for a 12% fee on a $50,000 claim. The contract states the fee, the scope, and the three-business-day cancellation right. The insured later asks the adjuster to recommend the adjuster's cousin's restoration company. The adjuster must disclose the family relationship in writing and let the insured choose freely. If the insured cancels within three business days, the contract is rescinded and any fee already collected must be returned under the contract's terms.
Traps
A contingent fee cannot be collected without a compliant written contract. Do not describe yourself as an insurer representative or as a lawyer. Do not hide a contractor relationship; undisclosed conflicts can lead to discipline and fee forfeiture. Do not promise a specific settlement amount.