TX Public Adjuster cheat sheet

TDI licenses public adjusters under Texas Insurance Code Chapter 4102; a license is required before soliciting, negotiating, or settling an insured's claim for compensation.

License applicants must be at least 18, submit an application and fingerprints, pass the required exam, pay fees, and maintain a $50,000 surety bond with TDI.

A public adjuster contract must be written, signed by the insured, disclose the fee or compensation method, and state that the adjuster represents the insured.

The insured may rescind a public adjuster contract within three business days after signing by giving written notice to the public adjuster.

TDI may deny, suspend, or revoke a license for fraud, misrepresentation, felony conviction, failure to maintain the surety bond, or violating insurance law.

Licensees must complete TDI-approved continuing education each renewal term, including ethics, and renew before the license expiration date.

A public adjuster may not solicit business at a disaster scene or in a manner prohibited by TDI rules after a declared disaster.

Public adjusters represent insureds only; they do not have authority to bind coverage, act for an insurer, or adjust claims for an insurer on the same claim.

Indemnity restores the insured to the pre-loss financial position, no better and no worse, subject to limits, deductibles, and valuation method.

Insurable interest must exist at the time of loss; a person with no financial interest in the property cannot collect for its damage.

Actual cash value equals replacement cost minus depreciation; replacement cost value pays to repair or replace without deducting depreciation.

A deductible is subtracted from each covered loss; percentage windstorm or hurricane deductibles are calculated from a stated coverage amount such as Coverage A.

Policy limits cap the insurer's payment; coinsurance in commercial property reduces payment when the insured carries less than the required amount.

Typical duties after loss include prompt notice, protecting property from further damage, cooperating with investigation, submitting proof of loss, and allowing inspection.

Appraisal resolves disputes about the amount of loss when the policy provides it; coverage disputes are generally resolved by courts, not appraisers.

Subrogation gives the insurer rights to recover from the responsible party after paying the insured; the insured must not impair those rights.

Texas prompt-payment rules require the insurer to acknowledge receipt of a claim, begin investigation, and request necessary information within 15 days.

After receiving all necessary information, the insurer must accept or deny the claim within 15 business days and pay within 5 business days after acceptance.

If the insurer delays payment beyond 60 days after a proper demand, Chapter 542 may impose 18 percent annual interest and reasonable attorney fees.

Investigation should establish cause and origin, scope of damage, pre-existing conditions, maintenance history, weather data, and all policy exclusions.

Damage assessment separates covered peril damage from wear and tear, deterioration, improper installation, and other excluded or pre-existing causes.

The insured must mitigate further damage; reasonable emergency repairs and protection costs are often covered even when the loss is disputed.

Unfair claim practices include refusing to pay without a reasonable investigation and failing to explain the factual or policy basis for a denial.

Claim file documentation should include dated photos, measurements, witness statements, estimates, correspondence, and a clear chain of custody for evidence.

Replacement cost value is the quantity of material and labor priced at current local rates, including sales tax and required fees when supported.

Actual cash value equals replacement cost minus depreciation; depreciation reflects age, condition, and useful life of the damaged component.

Depreciation equals replacement cost times age divided by useful life, capped so the result does not produce a negative ACV.

Recoverable depreciation is withheld on an RCV claim and released after the insured completes repairs and submits proof of the replacement cost.

Overhead and profit may be added when a loss requires multiple trades or a general contractor; it is not automatically owed on every claim.

A proof of loss is a sworn statement of the amount claimed, the cause of loss, and supporting details required by the policy.

Betterment and voluntary upgrades are generally not owed; code upgrades are covered only when ordinance or law coverage applies.

Coinsurance payment formula: insurance carried divided by insurance required, multiplied by the loss, capped at the policy limit.

A public adjuster owes a fiduciary duty to the insured and must act in the insured's best interest throughout the claim.

A public adjuster may not represent both the insurer and the insured, or handle a claim where the adjuster has a personal financial interest.

A public adjuster may not acquire an ownership interest in the insured's claim, salvage, or proceeds beyond the agreed fee.

A public adjuster may not share compensation with an unlicensed person for referring or handling a claim.

Misrepresenting policy coverage, claim value, or the adjuster's authority is an unfair practice and grounds for license discipline.

A public adjuster must protect the insured's nonpublic personal and claim information and use it only for the claim.

Unfair claim settlement practices include misrepresenting policy provisions, delaying without a reasonable basis, and failing to explain a denial.

Offering a settlement substantially less than the amount owed when liability is clear is an unfair claim practice under Texas law.