Storm-Chaser in Moore
After a May hail storm in Moore, a door-to-door salesman named Chris tells homeowners he is a public adjuster licensed in Texas and that Oklahoma grants reciprocity. Chris is not licensed in Oklahoma. He signs several homeowners to 20% contingency contracts, collects a $4,000 upfront documentation fee from one homeowner, and uses an unlicensed canvasser to schedule appointments. Chris tells homeowners that he has already calculated their roof damage from the street and that they should not let the insurer inspect without him. One homeowner, Ms. Patel, pays the $4,000 and later learns that Chris has no Oklahoma license and that the upfront fee was not disclosed as refundable. She has not yet filed a claim. A licensed Oklahoma public adjuster is asked to take over the claim.
1. List the likely Oklahoma licensing violations by Chris and his canvasser, and explain why Texas licensure does not cure them.
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Chris appears to be acting as a public adjuster in Oklahoma without an Oklahoma license. Public adjuster licensing is state-specific; a Texas license does not authorize him to negotiate, solicit, or sign contracts in Oklahoma unless Oklahoma law expressly provides reciprocity or a nonresident license, and even then he must comply with Oklahoma requirements. His claim of automatic reciprocity is suspect and should be verified with the Oklahoma Insurance Department.
The $4,000 upfront documentation fee is also a problem. Public adjuster compensation is generally contingency-based and must be disclosed in a written contract; an advance fee that is not earned and not refundable may violate Oklahoma public adjuster requirements and unfair trade practice rules. Using an unlicensed canvasser to solicit claims may be unlicensed activity, and paying or sharing compensation with an unlicensed person is typically prohibited.
Chris's statement that homeowners should not let the insurer inspect without him may interfere with the insurer's right to investigate and with the insured's freedom to communicate. The licensed adjuster should not assume the contracts are valid. The adjuster should document Chris's representations, the contract, the fee receipt, and the canvasser's role, and should report the matter to the Oklahoma Insurance Department's enforcement or consumer assistance unit.
2. Is the 20% contingency contract enforceable? What should the homeowner do about the $4,000 advance fee?
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The contract is at serious risk of being unenforceable. If Chris was unlicensed when he solicited and signed the contract, Oklahoma law may void the agreement or bar him from collecting a fee. The 20% contingency rate may also exceed any applicable Oklahoma limit or disclosure requirement. The missing refundability disclosure and the upfront fee strengthen the homeowner's position that the contract was not properly formed.
Ms. Patel should send a written cancellation demand to Chris, keep a copy, and ask for a full refund of the $4,000. She should not pay any additional fee. If Chris refuses, she should file a complaint with the Oklahoma Insurance Department and preserve the contract, receipts, text messages, and any door-hanger or business card. She may also need to consult a private attorney about a refund or restitution claim.
The licensed adjuster should not take a fee out of the $4,000 refund or split any recovery with Chris. The adjuster should confirm in writing that Ms. Patel is free to hire counsel and should not discourage her from reporting the unlicensed activity. The adjuster should also avoid adopting Chris's damage estimate without independent inspection.
3. What should the licensed Oklahoma public adjuster do before taking over the claim?
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The adjuster should first verify licensure and contract status. Obtain Chris's contract, the fee receipt, proof of payment, and any written disclosures. Confirm whether Ms. Patel has filed a claim, whether the insurer has inspected, and whether Chris has communicated with the carrier. The adjuster should not contact the insurer as Ms. Patel's representative until she signs a new compliant contract and confirms that Chris has been terminated.
The adjuster should inspect the roof and interior independently, photograph conditions, and prepare a scope of damage. The adjuster should not rely on Chris's street-level estimate. The adjuster should also check for policy deadlines, mortgagee issues, and any prior repairs. If a claim has already been submitted, the adjuster should send a written notice of representation and request the claim file, while preserving Ms. Patel's right to complain about Chris.
Finally, the adjuster should explain the fee and cancellation rights in writing, disclose any conflicts, and document the handoff. The adjuster should report the unlicensed activity to the Oklahoma Insurance Department and cooperate with any investigation. The adjuster should not promise a specific settlement or criticize the insurer in a way that prejudices the claim.