The Roofer Who Also Adjusts
Daniel is licensed as an Ohio public adjuster and also owns a licensed roofing company. After a June hail storm, he knocks doors in a subdivision and signs a homeowner, Ms. Alvarez, to a one-page "claims service agreement" that names his roofing company as the preferred contractor and sets his fee at 12% of "any insurance money paid." He tells her his fee is "paid by the insurance company" and that she must use his crew or the claim will be delayed. The policy is an HO-3 with a $1,000 deductible; the insurer's initial estimate is $18,400 for roof and gutters. Daniel inspects, submits a $31,900 estimate that includes full roof replacement and his company's overhead and profit, and asks the insurer to add his 12% fee to the settlement. Ms. Alvarez later asks whether she can cancel and whether Daniel can do the repairs.
1. Identify the licensing and contract violations in Daniel's conduct and explain the correct disclosures and cancellation rights.
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Daniel's "claims service agreement" is not a compliant public adjuster contract. Ohio requires a written contract that is separate from any repair contract, states the fee clearly, and discloses that the public adjuster represents the insured, not the insurer. Saying the fee is "paid by the insurance company" is a misrepresentation: the fee comes out of the insured's settlement proceeds and must be disclosed as such. Telling Ms. Alvarez she must use his crew or the claim will be delayed is an unfair pressure tactic and may be an unlawful tying arrangement. The 12% term also appears to exceed Ohio's 10% statutory cap on compensation based on the amount of the claim paid; the excess is unenforceable. The insured should have a right to rescind within three business days after signing, and the contract must clearly explain that right. Naming the roofing company as "preferred contractor" inside the adjuster contract blurs two separate roles and undermines informed consent.
2. May Daniel's roofing company perform the repairs and may he collect the 12% fee from the insurer? Analyze.
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No on both counts as presented. A public adjuster who owns the repair company has a direct conflict of interest. If Daniel negotiates the claim and then sells the repairs, his incentive is to maximize the scope his own company performs, not necessarily to maximize Ms. Alvarez's net recovery. Ohio public adjuster regulation and unfair-trade-practice principles prohibit a public adjuster from receiving compensation from both the claim settlement and the repair work on the same loss without full written disclosure and informed consent; the safer rule, and the one examiners expect, is that he cannot act as both adjuster and contractor on the same loss. He also cannot ask the insurer to "add" his fee to the settlement as if the fee were a covered loss. The fee is paid from the insured's proceeds under the adjuster contract. Ms. Alvarez may hire Daniel's roofing company only if she cancels the public adjuster contract or the two businesses are truly separated and she gives informed consent after a clear disclosure.
3. What should Ms. Alvarez be told about the $31,900 estimate and the request to add the fee to the settlement?
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The $31,900 estimate is a contractor's opinion, not a proof of loss. The insurer owes the reasonable cost to repair or replace with like kind and quality, subject to policy limits, the deductible, and any endorsements. Daniel's estimate may include non-covered items, betterment, or his own overhead and profit. Ms. Alvarez should be told: (1) the insurer is not obligated to pay the public adjuster fee as a separate claim item; (2) she remains responsible for the $1,000 deductible and any lawful fee; (3) she can compare estimates and obtain an independent contractor bid; (4) she can cancel the public adjuster contract within the rescission period; and (5) any demand to add the fee to the settlement should be withdrawn unless the policy actually covers claim preparation costs. Daniel should document the scope line by line and explain what is covered versus what is merely requested. He should not use the estimate to pressure her into using his company.