Fire Loss and the Canceled Public Adjuster Contract
Denise owns a 1962 ranch home in Las Vegas. A kitchen fire on March 3 causes $62,000 in smoke and cabinet damage. That evening, while Denise is staying at a hotel, a Nevada-licensed public adjuster presents a one-page contract. It states a 10% contingency fee but has no cancellation or rescission notice, no description of the adjuster's services, and no acknowledgment that Denise received a copy. Denise signs. The next morning, before the adjuster has submitted anything to the insurer, she texts: "I cancel." The adjuster had already opened the claim by phone and taken six photos. The insurer later pays $62,000 on the dwelling policy. The adjuster demands $6,200 and tells Denise the contract is "ironclad." Denise asks whether she must pay. The adjuster has kept no time log and did not give Denise a copy of the signed contract.
1. Was the public adjuster entitled to the full $6,200 contingency fee? Explain the contract and licensing issues a Nevada public adjuster should consider.
Read the worked answer
The full $6,200 is not supportable. Nevada regulates public adjusters under NRS 684A and requires a written contract with specified disclosures, including the fee and the insured's cancellation rights. A contract missing required terms is vulnerable to rescission; the adjuster cannot call it "ironclad." Even if the contract were valid, the fee must be tied to services actually performed. Opening the claim and taking six photos is minimal work; a $6,200 charge for that is not reasonable. The adjuster should acknowledge the cancellation, stop representing Denise, notify the insurer, and either refund any fee or negotiate a documented quantum meruit amount for the limited work. Keeping no time log and not providing a copy weakens any fee claim.
2. Assume the contract omitted a required right-to-cancel notice. What should the adjuster do now, and what records should be kept?
Read the worked answer
Treat the contract as rescinded rather than litigate an unenforceable fee. Send Denise a written cancellation acknowledgment, confirm no fee will be deducted from the $62,000, and notify the insurer in writing that the adjuster no longer represents her. Keep the original contract, the cancellation text, phone log, six photos, and a memo of the March 3 meeting. If any fee is retained, provide a written accounting. The adjuster should also review her contract template and have counsel confirm that it contains Nevada-required disclosures. Continuing to demand the fee after a missing cancellation notice risks a licensing complaint and an unfair-practice allegation.