Driveway Contract With Assignment and No Rescission Notice
A homeowner in Omaha signs a public adjuster contract in her driveway two days after a windstorm. The adjuster's tablet shows an 18% contingency fee, a $750 administrative fee due at signing, an assignment of all insurance proceeds to the adjuster, and a power of attorney to endorse checks. The contract is dated, but the homeowner receives no copy and no separate rescission notice; it also states that the fee is earned when the contract is signed. The next morning she texts that she wants to cancel because her brother is a licensed adjuster. The adjuster replies that the contract is binding and that the $750 is nonrefundable. The homeowner's initial carrier estimate is $26,000. The adjuster has performed no inspection and has not received any claim payment.
1. Identify the contract deficiencies under Nebraska public adjuster requirements and assess enforceability.
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Several deficiencies stand out. Nebraska requires a written public adjuster contract with clear terms, a copy for the insured, and disclosure of the insured's limited right to rescind, commonly three business days. This contract omits the rescission notice and gives no copy. It also makes the fee earned at signing, which is inconsistent with a contingency arrangement tied to a settlement, and it imposes a $750 administrative fee that was not separately explained. The assignment of all proceeds and the power of attorney to endorse checks create control over the insured's money and a serious conflict of interest. Those terms may be unenforceable and may support license discipline. The contract is likely voidable rather than automatically void, but the adjuster should not rely on it. Because no inspection was performed, no meaningful service supported the $750 charge.
2. Can the homeowner cancel, and what should happen to the $750?
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If the homeowner cancels in writing within the statutory rescission period, the contract must end and any fee paid must be refunded. Even if the rescission period is disputed, the missing notice, missing copy, and unearned administrative fee give strong grounds for rescission and restitution. The adjuster should return the $750 promptly and should not treat the fee as earned merely because the contract was signed. If the homeowner cancels after the statutory period, the statutory right may be lost, but the deficiencies can still support a complaint, a civil claim, and discipline. The adjuster should document the cancellation date, stop all claim work, and avoid contacting the carrier as the insured's representative after cancellation.
3. What should the adjuster do about the assignment of proceeds and the power of attorney?
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The adjuster should not accept or use an assignment of all insurance proceeds or a power of attorney to endorse the insured's checks. Those devices give the adjuster control over funds that belong to the insured and conflict with the adjuster's fiduciary role. They can also interfere with the insurer's payment practices and may violate Nebraska public adjuster requirements and unfair trade practice standards. The proper course is to cancel or return those authorizations, accept compensation only under a compliant written contract, and let the insured authorize payment directly. If a lender or mortgagee is involved, the adjuster should coordinate with the insured and the carrier rather than endorsing checks. Any prior use of the power of attorney should be reversed and documented.