Claims Adjusting Practices and Ethics
The claim file is the defense
The work runs in a fixed sequence: acknowledge, investigate (statements, photos, scene, records, ISO), evaluate coverage first and damages second, document every contact, then negotiate and settle - or deny in writing citing the policy language. That discipline keeps a file defensible.
Good faith and fair dealing
Texas recognizes the duty of good faith and fair dealing and treats unfair settlement practices under Chapter 541. Red flags: unreasonable delay, failure to investigate, offering substantially less than the evidence supports, denying without a stated policy basis, failing to explain a denial, and using a release to gain an unrelated advantage. When coverage is unclear, issue a reservation of rights letter rather than denying outright.
Ethics and conflicts
An adjuster owes duties to the insurer, the insured and the public: no undisclosed conflicts, no compensation contingent on claim outcomes, no unauthorized legal advice, no altering or destroying records, and confidentiality of claim information.
Fraud and referral
Suspected material misrepresentation goes to the insurer's SIU and may be reported under Insurance Code Chapter 705; Texas protects good-faith reporters.
Rule of thumb
"If it isn't in the file, it didn't happen." Every decision should be traceable to a dated note.
Worked example
An insured reports $40,000 of stolen jewelry eight days after policy inception, with no receipts and no police report. New policy, no proof of ownership, no report - a textbook SIU referral, not an immediate payment.