The Unauthorized Practice of Public Adjusting is when someone other than a licensed public adjuster attempts to settle a policyholder’s residential or commercial property insurance claim. Public adjusters are the only professionals specifically licensed to adjust, negotiate, and settle property claims for the insured.
A public adjuster is hired by the policyholder post-disaster to represent their interests when settling a property insurance claim from an event such as a hurricane, fire, or tornado. Public adjusters have special training and expertise in appraising, preparing, and negotiating losses.
When ‘bad actors’ pretend to have the proper regulatory authority to handle a property claim for the insured it not only affects policyholders and becomes a consumer protection issue, but has an adverse effect on the entire insurance industry as well.
Typical offenders include: tradesmen, roofers, contractors, accountants, and restoration companies (many who are “storm chasers”) who are all not licensed or certified to adjust claims. That doesn’t mean they do not serve a purpose in a post-disaster environment, just not in adjusting claims for a policyholder.
If a tradesman is discussing a policyholder’s coverage, negotiating the claim on the policyholder’s behalf, arguing about what is ‘bad faith,’ or debating over what is covered or excluded from a policy – this should raise a red flag that he or she is acting as an unlicensed public adjuster.
A tradesman’s job is to give the policyholder an accurate scope of their work as well as an estimate for the services they are licensed and legally able to provide; they cannot and should not give claims advice. In addition, if they are actually doing the repair/restoration work a conflict of interest is created if they are also negotiating a settlement.