Ethics and Montana Adjuster Regulations
What this domain tests
This domain covers the public adjuster’s legal and ethical duties in Montana: licensing, contract rules, compensation disclosure, conflicts of interest, confidentiality, and prohibited conduct. Expect scenario questions about solicitation, fees, and representing the insured.
Core rules and concepts
- Licensing: a person who adjusts a first-party property claim for compensation on behalf of an insured must hold a Montana public adjuster license. Licensing requires application, examination, and any required bond; unlicensed adjusting is prohibited.
- Contract: the public adjuster must use a written contract signed by the insured, state the fee or method of calculation, and disclose the insured’s right to rescind within three business days. The adjuster must give the insured a copy.
- Fiduciary duty: the public adjuster represents only the insured, must act in good faith, and may not also represent the insurer on the same claim. Funds held for the insured must be handled properly.
- Prohibited conduct: no rebates or kickbacks, no false statements to an insurer, no acquisition of an interest in the claim, no unauthorized legal advice, and no solicitation that violates Montana’s disaster or emergency rules.
- Privacy and records: protect personal and financial information; keep claim records available for inspection; do not disclose without authorization or legal requirement.
- Continuing education and compliance: maintain the license, complete required CE, and respond to Commissioner inquiries.
Worked example
An insured signs a public adjuster contract on Monday for a fire loss. On Wednesday the insured finds a contractor who will handle the claim for free and wants to cancel. Under Montana’s three-business-day rescission right, the insured may cancel in writing within the period and owes no fee for the canceled contract. The adjuster must provide a copy of the signed cancellation and cannot enforce a fee that the contract did not disclose.
Traps that cost marks
Do not assume a contractor’s “free” claim help is lawful public adjusting. Do not charge a fee before a written contract. Do not represent the insurer and insured at once. Do not treat the rescission period as optional language.