Governor Gavin Newsom recently signed Senate Bill 240, which enacts new laws that regulate out of state independent adjusters. The law also addresses claim adjustment for declared emergencies. The new laws, described more fully below, became effective on October 3. 2019.
Cal. Ins. Code § 14047 places limits on an insurance company if, within a six-month period, the insurer assigns a third or subsequent claim adjuster to be primarily responsible for a first-party insurance claim. If a third-adjuster is appointed, the insurer is required to establish a primary point of contact for a claim and also provide one or more means of direct contact. The primary point of contact is also required to remain assigned to the insured’s claim until the insurer determines that the claim is closed or litigation has been filed.
If an independent insurance adjuster who is not licensed in California and who is assigned to a claim for a loss caused by a declared emergency, the insurer must, within 15 calendar days from the date the adjuster began claim adjusting in California, register the adjuster with the Department of Insurance. The best practice is to request that any out of State independent claim adjuster for a declared emergency provide the required notice of registration. Cal. Ins. Code § 14022.5(a)(2)
If an independent insurance adjuster, either an in-house or independent adjuster, who is not licensed in California is assigned to a claim for a loss caused by a declared emergency, the insurer must have an appointed supervising licensed adjuster who: (1) ensures the non-licensed adjuster read and understood the most recent significant law notice and adjusting handbook (Cal. Ins. Code § 14022.5(a)(3)) and (2) under penalty of perjury, certify that the non-licensed adjuster read and understood the notice and handbook. Cal. Ins. Code § 14022(a)(2); Cal. Ins. Code § 14046(b) & (c). The best practice is to request that any out of State independent claim adjuster for a declared emergency provide proof of the insurer’s compliance with these new laws.
The Department of Insurance must annually prepare and deliver to every out of state independent adjuster adjusting a claim in California: (1) a notice describing the most significant California laws pertaining to property policies and (2) a handbook for claim adjusting in California that includes information relevant to evaluating damage caused by an emergency. The notice and handbook, described above, will be made accessible on the Department of Insurance’s website. Cal. Ins. Code § 14046(a)
Whenever inquiring about an insurer’s compliance with any of the above new laws, always reference the specific applicable Insurance Code number. Presenting your knowledge of the Insurance Code and the insurer’s duties under the Code is one of the most powerful tools you have a policyholder advocate.
