What is a public adjuster, and how do I know they are legitimate?

If you are business or homeowner surviving the Nor-Cal fires, you are likely to hear about public adjusters at some point soon.  If you are another kind of policyholder, you should know what they are.

Public adjusters are, at their core, the direct opposite of the insurance company's adjuster on your claim.  A public adjuster works with you to develop a list of damaged property, estimate the value of that damage, and negotiate with the insurance company for the best claim payment possible.  This is something that some attorneys can do as well.

The California Insurance Code provides the following definition as well:

A Public Insurance Adjuster is a person who, for compensation, acts on behalf of or aids in any manner, an insured in negotiating for or effecting the settlement of a claim or claims for loss or damage under any policy of insurance covering real or personal property or any person who advertises, solicits business, or holds himself or herself out to the public as an adjuster of those claims and any person who, for compensation, investigates, for those losses on behalf of any public insurance adjuster.


Public adjusters (and attorneys who do the same) typically benefit when they get you more money for your claim, because they are often paid on a contingency basis -- i.e., a percentage of the claim payment.  However, they can also be paid on an hourly basis or a combination of the two.

California regulates public adjusters, and in the wake of disasters those regulations matter because unlicensed and unqualified individuals may masquerade as public adjusters.

Here are some key regulations:

  • Public adjusters must be licensed.  Click here to do a license check.  If you go to the public adjuster's place of business, the license must be prominently displayed.
  • Public adjusters cannot assign their licenses to someone else.
  • Public adjuster contracts must conform to the California Department of Insurance's requirements and contain each of the following:
    • Title of “Public Adjuster Contract.”
    • The name, business name, license number, telephone number, and address of the licensee.
    • The name and address of the insured.
    • A description of the loss and its location, if applicable.
    • The name of the insurer and the policy number, if known.
    • The full salary, fee, commission, or other consideration the licensee is to receive for services under the contract.
    • A description of the services to be provided to the insured.
    • Signatures of the licensee and the insured.
    • The date the contract was signed by the licensee and the date the contract was signed by the insured.
    • A statement of the compensation to the licensee, including the percentage and base to which the percentage applies
    • A statement that the insured has the right to cancel the contract within three business days of signing it and being provided the signed contract.
  • The contract must also state, “As a public adjuster, I am required by the California Insurance Code to post a surety bond in the sum of $20,000 to cover certain kinds of claims made by you, the insured. If you have any questions concerning the surety bond, you may contact the California Department of Insurance Licensing Hotline at 1-800-967-9331 or www.insurance.ca.gov.”
  • Public adjuster contracts MUST NOT:
    • Collect money from the insured directly unless it is paid by the insurer first.
    • Authorize the insurer to issue the check directly to the public adjuster and only the public adjuster.
    • Impose late fees or collection costs.
  • A public adjuster cannot solicit your business when the loss is still ongoing, such as a fire still burning; where emergency responders are present at the loss site; an evacuation order is in place.  


  • When there is a catastrophic disaster, like the current Nor-Cal fires, public adjusters cannot solicit your business until seven days after the disaster ends.
  • The public adjuster must give you a form called a "notice of cancellation" with the contract.
  • The public adjuster must give you a form titled "disclosure" that explains what a public adjuster does.
  • No later than three days after the cancellation option expires, the public adjuster must notify the insurer and inform them of their representation of you.
  • Normally, the insured has 3 days to cancel the contract.  However, in a catastrophic disaster, the insured has 5 days.
  • The public adjuster must disclose to the insured all compensation received.
  • Public adjusters cannot do any of the following:
    • Use any misrepresentation to solicit a contract or agreement to adjust a claim.
    • Solicit or accept remuneration from, or have a financial interest in, any salvage, repair or other firm which obtains business in connection with any claim he or she has a contract or agreement to adjust.
    • Advance moneys to any potential client or insured in order to obtain business.
    • Offer to pay a fee, commission, or other valuable consideration, exceeding one hundred dollars ($100), to a person for referring a loss unless he or she employs that person to so act for him or her and that person is licensed to act as an adjuster under the provisions of this chapter.
  • A public adjuster who receives, accepts, or holds any funds on behalf of an insured towards the settlement of a claim for loss or damage shall deposit the funds in a non-interest-bearing escrow or trust account in a financial institution that is insured by an agency of the federal government in the adjuster’s home state or the state where the loss occurred.  All funds held in an escrow or trust account shall be the property of the insured and shall be held pursuant to a written contract signed by the insured and the public adjuster.  A public adjuster who receives any fiduciary funds shall, within 15 business days of receipt, deposit the funds in the escrow account and provide a written statement to the insured showing the amount of funds received and deposited in escrow.

These are most, but not all of the regulations governing public adjusters.  You can always contact the California Department of Insurance for more information at 1-800-967-9331 or www.insurance.ca.gov.