Spurred on by a request from a policyholder who has a bad experience with a public insurance adjuster, the New Jersey Department of Banking and Insurance (DOBI) has proposed rule changes that will affect all New Jersey licensed public adjusters. The policyholder was sued by their public adjuster to recover fees. The matter went to trial and the policyholder won a unanimous verdict against the public adjuster. The policyholder, however, did not stop there. He petitioned DOBI for rule changes that would drastically alter the way public adjusters are retained and paid for their services.

DOBI ultimately dismissed the petition for rule changes, but decided that it would proffer some rule changes of its own. The proposed rule changes are:

  • All proposed partners, officers, directors or any other parties that own 10% or more of a public adjusting firm will be responsible for the conduct of any public adjuster or any employee of the public adjusting firm.
  • Licensed public adjusters must practice under their legal name unless their business or trade names have been approved by DOBI. Further the rule will place certain requirements on what the business or trade names can include in an effort to make sure the names are not deceptive or misleading.
  • The letter of engagement between the policyholder and the public adjuster will include new mandatory language concerning the compensation to be paid as well a detailed list of the services to be provided by the public adjuster. Further, the contract will be required to include a method for calculating the compensation if a settlement offer is received before the public adjuster has performed the listed services.
  • The only time a public adjuster may be listed on the settlement check is if the public adjuster agrees in the contract they will endorse the check and give it to the policyholder within 5 days of its receipt.
  • The contract will be required to have language advising the policyholder they may have coverage for additional living expenses and that the public adjuster will not charge a fee on additional living expenses unless explicitly agreed to between the parties.

The New Jersey Public Adjusters Association is working with DOBI to make certain that the rule changes ultimately put in place present a workable solution to the issues raised by the policyholder who initially sought the changes. Check back for more updates as these rules are discussed and enacted.

“You have to learn the rules of the game. And then you have to play better than anyone else.” 
           – Albert Einstein