Michigan Insurance Law and Regulation Applicable to Public Adjusters
Scope of the domain
This domain tests how Michigan's Insurance Code and DIFS oversight apply when a public adjuster represents an insured on a first-party claim. Expect questions on licensing triggers, contract requirements, solicitation limits, recordkeeping, and DIFS enforcement.
Who must be licensed
Under Michigan Insurance Code Chapter 12 (MCL 500.1201 et seq.), a public adjuster is a person who, for compensation, acts on behalf of an insured to negotiate, advise on, or settle a claim. The license must be in effect before the person advertises, solicits, or negotiates. A contractor, roofer, or "claim consultant" who negotiates claim values for a fee is functioning as a public adjuster and needs the license; merely performing repairs is different.
Contract and conduct rules
Michigan requires a written contract with clear terms: the parties, the scope of authority, the fee or method of calculating it, and the insured's cancellation rights. The insured must receive a copy. Public adjusters may not misrepresent policy coverage, charge for unlicensed activity, or solicit at a loss scene or during a declared emergency in the manner prohibited by statute. Records of each claim must be retained and produced to DIFS on request.
Worked example
After a kitchen fire, an unlicensed "restoration consultant" offers to handle the claim for 15% of the settlement and recommends his brother-in-law's roofing company. Two problems: negotiating the claim for compensation requires a public adjuster license, and the undisclosed referral creates a conflict. The fix is a licensed adjuster, a signed written contract with fee and cancellation terms, and written disclosure of any referral relationship.
Traps
Do not assume a licensed contractor may negotiate claim scope or price with the insurer. Do not confuse public adjusters with producers or company adjusters. Do not treat DIFS bulletins and orders as optional reading; they state current expectations.