Ethical and Legal Claims Practices
This domain tests fiduciary duty, conflicts of interest, prohibited conduct, and honest dealing with insureds, insurers, and the Department. A public adjuster acts for the insured and must avoid arrangements that bias the claim.
Core rules
- Disclose compensation in the written contract before work begins; explain the rescission right and any fee limits.
- Do not split fees with unlicensed persons, pay referral fees to contractors for claim referrals, or accept anything of value that creates a conflict.
- Do not acquire an interest in the insured's property or claim, commingle client funds, or use high-pressure solicitation, especially after a disaster.
- Advertising must be truthful; do not imply official affiliation with an insurer, government agency, or DIFP.
- Protect confidential information and keep records available for the Department.
Worked example
A contractor offers a public adjuster $1,000 for each homeowner referred to the contractor. The adjuster accepts and does not disclose it. Reasoning: the payment is an undisclosed conflict and an unearned referral fee; it can bias the repair scope and violate prohibited-practice rules. The adjuster should decline; fee-splitting with unlicensed referral sources is generally prohibited.
Traps
Calling a kickback “marketing.” Charging a fee before the insured understands the contract. Pressuring a homeowner to sign at the door. Promising a specific settlement amount. Failing to disclose that the adjuster cannot provide legal advice.