NM Public Adjuster cheat sheet

The New Mexico Insurance Code is administered by the Office of Superintendent of Insurance (OSI); the Superintendent is appointed by the Governor and enforces Title 13, Chapter 4 NMAC.

Unfair trade practices under NMSA 1978, §59A-16 include misrepresentation, false advertising, boycott, coercion, intimidation, unfair discrimination, rebating, and unauthorized insurance transactions.

Unfair claim settlement practices under NMSA 1978, §59A-16-20 include misrepresenting policy provisions, failing to act promptly on claims, refusing to pay without reasonable investigation, and failing to explain claim denials.

A producer or adjuster must report an administrative action or criminal prosecution taken by another jurisdiction to the OSI within 30 days of the final disposition.

Licensing fees, appointment fees, and continuation fees are set by the OSI; licenses expire biennially unless renewed, and late renewal may require reinstatement and payment of penalties.

The New Mexico Insurance Guaranty Association (NMGIA) covers claims of insolvent insurers up to statutory limits; it does not cover first-party claims of insureds with net worth above the statutory threshold.

The New Mexico Fraud Against Taxpayers Act and insurance fraud statutes (NMSA 1978, §59A-16B) prohibit knowingly presenting false claims and require insurers to maintain anti-fraud plans.

Records of insurance transactions must be maintained for at least 5 years after the policy period or until the transaction is completed, whichever is later, and be available for OSI examination.

Hearings and appeals of OSI actions follow the Administrative Procedures Act (NMSA 1978, Chapter 12, Article 8); final orders are subject to judicial review in district court.

A New Mexico public adjuster license requires: age 18+, residency or nonresident licensure in good standing, completion of a prelicensing course (if required by OSI rule), passing the public adjuster exam, and fingerprint-based background check.

Public adjusters must be appointed by at least one licensed insurer or authorized to act on behalf of an insured; a public adjuster represents the insured, not the insurer, and must disclose that relationship in writing.

A public adjuster may not solicit a client during a declared disaster or emergency unless the solicitation is initiated by the client; NMAC 13.4.3 restricts unsolicited contact within 30 days of a loss.

A public adjuster contract must be in writing, signed by the insured, state the fee or percentage, disclose that the insured may cancel within 3 business days, and state that the adjuster cannot negotiate a settlement without the insured's written consent.

Compensation for public adjusters is limited to a reasonable fee; fees may not exceed 10% of the claim amount for a declared catastrophe unless the OSI approves a higher amount, and fees must be disclosed before signing.

Continuing education: public adjusters must complete 24 hours of CE every 2 years, including at least 3 hours of ethics and 3 hours of New Mexico insurance law.

Licensees must notify the OSI of a change of address within 30 days and of a legal name change within 60 days, and must respond to OSI inquiries within 15 business days.

Grounds for disciplinary action include fraudulent or dishonest practices, misappropriation of funds, failure to remit premiums, conviction of a felony, and failure to comply with continuing education requirements.

Indemnity principle: insurance restores the insured to approximately the pre-loss financial condition, no better and no worse; actual cash value (ACV) = replacement cost (RC) minus depreciation.

Insurable interest must exist at the time of loss for property insurance and at the time of the event for liability insurance; without it, the policy is void.

Utmost good faith requires both parties to disclose material facts; concealment, misrepresentation, or warranty breach can void coverage.

A policy is a contract of adhesion: ambiguities are construed against the insurer (contra proferentem), and exclusions are interpreted narrowly.

Declarations page identifies the named insured, policy period, limits, deductibles, and forms; the insuring agreement states the insurer's promise to pay.

Conditions precedent to coverage include prompt notice, proof of loss, cooperation, and submission to examination under oath; failure can prejudice the claim.

Subrogation transfers the insured's right of recovery against a third party to the insurer after payment; the insured may not impair that right.

Coinsurance clause in commercial property requires the insured to carry a limit equal to a specified percentage of value; penalty = (limit carried / limit required) × loss, subject to the policy terms.

HO-2 broad form covers named perils; HO-3 special form covers all risks on the dwelling and named perils on personal property; HO-5 comprehensive form covers all risks on both.

Coverage A (Dwelling), B (Other Structures), C (Personal Property), D (Loss of Use), E (Personal Liability), and F (Medical Payments) are the standard HO coverage parts.

Replacement cost coverage pays the cost to repair or replace with new material of like kind and quality, subject to policy limits; ACV pays depreciated value.

Ordinance or law coverage, water backup, and equipment breakdown are common endorsements that broaden or restrict coverage; flood is excluded and requires a separate NFIP or private policy.

Commercial property forms (CP 00 10) use causes of loss forms: basic, broad, and special; the special form covers risks of direct physical loss unless excluded.

Business income coverage pays lost net income plus continuing operating expenses during the period of restoration, typically with a 72-hour waiting period for civil authority actions.

Deductibles may be flat dollar or percentage of the Coverage A limit; a percentage deductible applies to the dwelling limit, not the loss amount.

Matching and cosmetic damage endorsements affect how undamaged portions are treated; the policy must be read to determine whether matching is owed.

CGL occurrence form (CG 00 01) covers bodily injury and property damage caused by an occurrence during the policy period; the claims-made form covers claims first made during the policy period.

Coverage A (Bodily Injury and Property Damage), Coverage B (Personal and Advertising Injury), and Coverage C (Medical Payments) are the standard CGL coverage parts.

Each occurrence limit is the maximum payable for all damages arising from one event; the general aggregate is the maximum for all claims in the policy period, often endorsed per project or per location.

Additional insured endorsements (e.g., CG 20 10, CG 20 37) extend coverage to parties such as landlords or general contractors; the scope depends on the specific endorsement wording.

Personal auto policy (PAP) Part A (Liability), Part B (Medical Payments), Part C (Uninsured/Underinsured Motorist), and Part D (Damage to Your Auto) are the standard parts.

New Mexico requires minimum liability limits of 25/50/10 ($25,000 per person, $50,000 per accident BI, $10,000 PD) and UM/UIM coverage unless rejected in writing.

Workers' compensation in New Mexico is administered by the Workers' Compensation Administration; employers must carry coverage, and the exclusive remedy rule bars most tort suits by employees.

Liability coverage responds to sums the insured is legally obligated to pay because of covered injury or damage; punitive damages may be excluded or insurable depending on statute and policy.

First notice of loss (FNOL) must be documented with date, time, reporter, policy number, loss description, and contact information; the insurer must acknowledge the claim promptly.

The claim investigation should establish coverage, liability, and damages: inspect the risk, interview witnesses, obtain police/fire reports, and preserve evidence.

Proof of loss is a sworn statement of the insured's claim; the policy specifies the deadline (often 60 days after request) and the required contents.

Damages are evaluated using replacement cost, actual cash value, or agreed value methods, supported by photographs, measurements, receipts, and contractor estimates.

For property claims, the adjuster prepares a room-by-room or item-by-item estimate using industry-standard pricing (e.g., Xactimate) and applies depreciation and deductible.

For liability claims, the adjuster evaluates negligence, comparative fault (New Mexico follows pure comparative fault), damages, and available limits.

Examination under oath (EUO) and recorded statements are investigative tools; the insured's duty to cooperate is a condition of coverage.

Reservation of rights letters preserve the insurer's right to deny coverage later while the investigation continues; a denial must cite specific policy provisions.

Maintain a claim file with a chronology of events, correspondence, photos, estimates, invoices, and settlement authority; document every contact with the insured and the insurer.

Settlement authority is granted by the insurer or client; a public adjuster may not settle a claim without the insured's written authorization and must present the net settlement to the insured.

Negotiation should be based on documented damages and policy language; use written demand packages that itemize damages, attach supporting evidence, and cite coverage provisions.

The adjuster must explain the settlement breakdown: gross loss, depreciation, deductible, prior payments, and net payable to the insured.

Use of independent experts (engineers, accountants, contractors) must be disclosed and coordinated with the insured; the cost may be borne by the insured unless the policy provides otherwise.

Timeframes: the insurer must acknowledge a claim within 15 days of notice, begin investigation promptly, and pay or deny within a reasonable time after proof of loss is received.

A public adjuster's fee is typically a percentage of the settlement; the fee agreement must be in writing and comply with New Mexico fee limits and disclosure rules.

Appraisal is a policy provision for resolving disputes over the amount of loss; each party selects an appraiser, and the appraisers select an umpire.

A public adjuster owes a fiduciary duty to the insured: act in the insured's best interest, avoid conflicts of interest, and disclose any compensation from other parties.

Unfair claims practices under NMSA 1978, §59A-16-20 include misrepresenting policy provisions, failing to acknowledge claims promptly, refusing to pay without reasonable investigation, and failing to explain denials.

Prohibited conduct includes rebating, false advertising, coercion, unauthorized practice of law, and soliciting clients during a declared disaster without prior request.

The adjuster must protect confidential information and may not use the insured's personal data for unauthorized purposes.

Commingling of client funds with the adjuster's own funds is prohibited; client funds must be held in a separate trust account.

The adjuster must not misrepresent the scope of coverage or the value of a claim, and must not advise the insured to sign a release without explaining its effect.

Ethical obligations include honesty, integrity, fairness, and compliance with continuing education and licensing requirements.

Violations may result in license suspension or revocation, fines, restitution, and referral for criminal prosecution.