Public Adjuster Licensing, Duties, and Ethical Practices
Domain 8 tests public adjuster licensing, contract rules, and fiduciary conduct. A public adjuster represents the insured-not the insurer-and must keep the insured's interests ahead of the fee.
Licensing and duties
- Oklahoma requires a public adjuster license from the OID before soliciting, negotiating, or settling a claim for compensation.
- A written contract must disclose the adjuster's compensation, scope of authority, and the insured's right to cancel; work should not begin before the contract is signed.
- The public adjuster may not represent the insurer on the same claim, settle without authority, or share fees with unlicensed persons.
- Records must be kept and claim funds handled honestly; conflicts of interest, such as ownership of a repair firm, must be disclosed.
Worked example
After a fire, a public adjuster signs a contingent-fee contract and also recommends a restoration company owned by the adjuster's spouse. The fee clause may be enforceable only if the contract complies with Oklahoma law, but the undisclosed conflict is an ethical violation. The reasoning: contingent compensation is permitted within statutory limits, but the fiduciary duty requires disclosure and informed consent. If the adjuster also acts as contractor, the contract and licensing rules may be violated.
Traps
Do not describe a public adjuster as a company adjuster. Do not assume a fee is valid just because the insured signed; the contract must meet statutory content and cancellation rules. Do not negotiate a claim without a license or accept compensation from both sides.