When navigating the aftermath of a property damage claim, many homeowners seek professionals to help them secure the best possible settlement from their insurance company. Public adjusters are often considered key players in these situations because they advocate for policyholders and assist them in negotiating with insurers and ensuring a fair claim resolution. However, policyholders in Arkansas need to be aware that hiring a public adjuster is not an option for them as public adjusting is prohibited by law in the state.

Arkansas is one of only a few states that prohibit the practice of public adjusting. According to the Arkansas Insurance Department, public adjusting is regarded as the unauthorized practice of law and is completely precluded by Arkansas’ statutory scheme. Ark. Code Ann. § 23-64-102(4)(A) defines an “adjuster” as an “individual, firm, limited liability company, or corporation who, for compensation as an independent contractor or as the employee of an independent contractor or for fee or commission investigates and negotiates, on behalf of the insurer, settlement of claims arising under insurance contracts.” (Emphasis added). Any adjusting on behalf of an insured is not even contemplated by the statute. Ark. Code Ann. § 23-64-201(c) further provides that “no person may adjust claims as an adjuster without licensure under this chapter.” Because there is no licensing scheme for public adjusters in Arkansas, they are not permitted to operate in the state.

Arkansas does, however, license insurance consultants, defined as “an individual, firm, limited liability company, or corporation which, for a fee, advises or counsels anyone as to his or her insurance needs and coverages under any insurance policy or contract.” Ark. Code Ann. § 23-64-102(5)(A). Ark. Code Ann. § 23-64-201(c) similarly requires that anyone acting as an insurance consultant in Arkansas be licensed. The Arkansas Insurance Department has clarified that insurance consultants may only offer their services on insurance matters that are not claim-specific or aimed at settlement.

The absence of public adjusters in Arkansas is not due to a lack of effort. In 2011, an Arkansas bill (S.B. 378) aimed at creating a statutory licensing scheme for residential public adjusters failed to pass, despite three attempts. At the time, Commissioner Bradford explained that “[t]he system which currently exists appears to be working for our consumers. There has been no public outcry for licensure of public adjusters here.”

So, what does this mean for Arkansas policyholders? Without access to public adjusting or consulting for claims, policyholders must deal directly with their insurer. Because they cannot benefit from a public adjuster’s expertise in the insurance process, it is crucial for Arkansas policyholders to be well-prepared and educated when filing a claim. If you are a policyholder in Arkansas, you should take extra steps to:

  1. Understand Your Policy: Thoroughly review your insurance policy to know what is covered and what is not. Pay close attention to any language regarding the time frame for filing a lawsuit. In Arkansas, insurers are prohibited by statute from shortening the time period in which an insured can bring a suit under the policy. Ark. Code § 23-79-202 and § 16-56-111(a). If your insurer attempts to shorten this period, they are violating your rights under Arkansas law.
  2. Document Everything: After filing a claim, take detailed photographs, make a list of damaged items, and document all interactions with your insurance company.
  3. Request a Re-evaluation: If you believe that the insurance adjuster’s settlement offer is unfair or insufficient, you can request a re-evaluation.
  4. Consult an Insurance Attorney: While public adjusters are not permitted in Arkansas, policyholders can still work with attorneys who specialize in insurance law. These attorneys can review claims, negotiate on your behalf, and ensure that the process is handled fairly.
  5. Consult United Policyholders: The largest and oldest charitable organization serving the interests of policyholders. Their Roadmap to Recovery™ program provides free insurance and decision-making guidance, tools and resources, including an online library of claim tips, sample letters, reports, instructional videos, and professional help directory.

Though public adjusters may be prohibited in Arkansas, policyholders are not left without options. By staying informed, thoroughly documenting all damages, and working with an experienced insurance attorney, Arkansas policyholders can still protect their interests and secure the compensation they deserve. If you need assistance with a claim in Arkansas (or elsewhere), Merlin Law Group has licensed, knowledgeable attorneys who are ready to help.