Insurance Adjuster Business Licensing
Businesses involved in the insurance industry must be licensed to provide the services they offer. Insurance adjuster license requirements vary by state and type of insurance service being offered.
What Is an Insurance Adjuster Business?
Firms that provide insurance services are required to be licensed when they do not have ownership of the policies. Insurance adjuster businesses are one example of firms that are required to obtain licensing. Requirements vary by state.
Insurance companies and policyholders hire insurance adjusters to manage their claims. Whether a business or an individual, the adjuster investigates claims to calculate if or how much an insurance company needs to pay a policyholder for their damages and losses. The more licenses an insurance adjuster business has, the more clients a firm can represent, contributing to increased revenue.
As an insurance adjuster, the key role of the firm is to help their clients prepare claim files. This involves collecting photographs and statements from involved parties, along with relevant or applicable expert testimonies. Once the necessary documents have been collected, the firm attaches a personal recommendation on how much the insurer should pay.
The Types of Insurance Adjusters
An insurance adjuster business can house three different types of adjusters. Most often, companies employ adjusters that work for or with insurance companies. However, some adjusters work for the insured parties. The three types of insurance adjusters include:
- Company Adjusters. Company adjusters are direct employees of insurance companies. They handle claims filed by the insurance companies’ policyholders.
- Independent Adjusters. Independent adjusters are self-employed. Insurers can hire them in certain instances, like if an insurance company doesn’t have a claims employee in a certain state. This is most common after a catastrophic event involving many parties, like a natural disaster.
- Public Adjusters. Public adjusters are similar to independent adjusters. The difference, however, is that public adjusters work for the insured, not the insurer. Insurance consumers hire public adjusters to obtain objective advice on settlements.
State requirements for the categories listed above vary. Note that you will likely need to appoint a registered agent to receive notice of lawsuit and other legal or government notices. While some states require different licenses for each type, others group them together. Some states don’t require licenses. To operate an insurance adjuster business, it’s crucial to understand your legal obligations, starting with the licensing process.
Understanding the Licensing Process
Depending on where your business is located, the licensing process could be a multi-step process, or there could be no licensing requirements at all. If, however, you’re located in a state where the requirements are many, the process could start with a pre-licensing course.
To get an idea of what the licensing process could involve, let’s take a look at how to become an insurance adjuster in Texas. Basic requirements include being at least 18 years of age and a US citizen or legal resident. From there, applicants must complete the state's Adjuster Licensing Course or pass the Texas state exam administered by Pearson VUE Testing Centers. Then, applicants need to complete the Texas Insurances Adjuster License application and submit applicable fees. Texas insurance adjusters are required to complete 30 hours of continuing education credits every two years, which is to include at least two hours in consumer protection or adjuster ethics.
Designated Home State Insurance Adjuster Licenses
As discussed, state licensing requirements vary across the country. For example, Pennsylvania does not require licenses for staff adjusters, independent adjusters, or CATs. Contracted public adjusters, however, must be licensed.
While an adjuster’s license may not be required in most instances in Pennsylvania, there are still benefits to obtaining a license. First, potential employers often look for applicants who are already licensed. In addition, traveling adjusters need to apply for non-resident licenses in the states in which they travel.
Those who live in Pennsylvania and wish to obtain an insurance adjuster business license can pursue a designated home state license. Florida, Texas, and Indiana offer designated home state licenses, allowing residents and businesses in non-licensing states to specify one of those three states as their home state.
Maintenance and Renewal
No matter what stage you are in with your business, you need to maintain your license’s status. State requirements vary, but renewals are often required on an annual basis. You may need to submit a renewal application, pay a renewal fee, or pursue continuing education. Complying with renewal requirements will ensure you can continue to operate your business without disruption.
Keeping on track with your business’s license renewals can be complicated, especially as a growing company. At Harbor Compliance, our managed annual reporting and registered agent services ensure accurate due date tracking and on-time filing. This way, your business will continue to be compliant with state and local requirements, and you will have the time you need to continue working and expanding your clientele.
If you are looking to outsource your maintenance and renewal duties, Harbor Compliance can help. We are available to review your business status, ensure you are in good standing in the state where you operate, and explain what steps you need to take in order to ensure you remain compliant with state and federal regulations.
How to Avoid Unlicensed Activity as an Insurance Adjuster Business
Insurance adjuster businesses need to understand best practices when it comes to claims. Even if the company is in a state where licensing isn’t required, it’s best to avoid unlicensed activity. Examples of unlicensed activity include:
- Advertising that you can get a potential client more money from an insurance company
- Advertising you can help with the claims process
- Claiming your services may be free or at a reduced cost based on insurance coverage
- Interpreting insurance policies
- Negotiating with insurance companies
State requirements for insurance licenses vary drastically. It’s essential to understand the specific laws and regulations that apply to your license. In addition, state laws often change, so it can be challenging to stay on top of your obligations. Below, you’ll find all of the information you need to pursue and maintain an insurance adjuster business license throughout the United States.
Click on the links below to view licensing information in your state.
Harbor Compliance License Manager helps insurance professionals maintain their licenses by automating repetitive tasks like tracking renewals. You can also access reference data for the states you work in, reducing the time you need to spend researching state requirements through License Manager. Contact our licensing experts today to learn more.
Adjuster - A person or firm that is paid to adjust, investigate, and negotiate claim settlements. There are 3 categories of adjusters: company, independent, and public. Company adjusters work for insurance companies and investigate claims on behalf of the company. Independent adjusters investigate claims on a contractual basis for insurance companies. Public adjusters investigate claims on behalf of claimants, usually to determine the amount of money that can be claimed.
Agent in Charge - A licensed individual responsible for the supervision of all individuals within an insurance agency. The agent in charge must be licensed in the same lines as the agency.
Insurance Agent - Insurance agents act as intermediaries between the insurance company and policyholders. Agents can be either captive or independent. Captive agents represent a single insurance company, while independent agents represent multiple insurers.
Insurance Broker - Individuals who sell insurance policies while representing the interests of the buyer. Brokers are typically independent intermediaries without an insurance company affiliation.
Insurance Producer - May be used to refer to either individual insurance agents and brokers or insurance agencies and brokerages.
Managing General Agent - An agent or broker that is involved in underwriting and has other areas of authority normally handled by insurers. MGAs are typically involved in unusual lines of coverage or in geographically prohibitive areas.
Surplus Lines Insurer - An insurance carrier that takes on risks that a licensed carrier is unwilling to insure. Surplus lines insurers do not have access to state guaranty funds and are less tightly regulated by state governing bodies.
Third Party Administrator - An organization that manages group insurance policies and works with the employer and insurance carrier to process claims, handle loss control, and provide risk management and consulting services.
Title Agent - Title agents sell insurance that protects real estate owners against loss of ownership of a property due to a legal claim.
Viatical Settlement Provider - A company that purchases life insurance policies at a discount from individuals seeking immediately available funds.
Independent Insurance Agents and Brokers of America (Big “I”)
Advocacy group of independent insurance brokers and agents.
National Association of Insurance and Financial Advisors (NAIFA)
Professional association that advocates for favorable regulatory conditions for insurance agents and financial advisors.
National Association of Insurance Companies (NAIC)
A standard setting and regulatory support organization that is governed by state insurance regulators.
National Association of Professional Insurance Agents (PIA)
Professional association that provides education and advocacy for insurance agents throughout the United States.
National Insurance Producer Registry (NIPR)
An affiliate of the NAIC that provides streamlined and uniform producer licensing processes.