Texas Public Adjuster Training

Update:  February 7, 2014

The need for Texas Public Adjusters has increased significantly, due in part to tightening of existing insurance adjuster laws in late 2013.

2013 Texas Law Imposes Stiff Penalties For Mixing ‘Adjusting and Contracting’

Since 2003, the state of Texas has required those who adjust and negotiate claims, on behalf of the policy holder, to be licensed Public Adjusters. The statute allows public adjusters to receive compensation for their services; however, profiting from both sides of the claim is not permitted.

Texas Insurance Code, § 4102.158:

Conflicts of Interest Prohibited

(a) A license holder may not:

(1) participate directly or indirectly in the reconstruction, repair or restoration of damaged property that is the subject of a claim adjusted by the license holder; or

(2) engage in any other activities that may reasonably be construed as presenting a conflict of interest, including soliciting or accepting any remuneration from, or having a financial interest in, any salvage firm, repair firm or other firm that obtains business in connection with any claim the license holder has a contract or agreement to adjust.

In spite of prohibited conflicts of interest in the 2003 statute, a number of Texas roofing contractors continued to negotiate and ‘adjust’ on behalf of policy holders.

Roofing Contractors May Not Assess Damage Claims AND Profit From the Repairs…

In order to strengthen the statute and further protect consumers, HB-1183 was introduced by the Texas Legislature. HB-1183 added the following language to section 4102 of the Texas Insurance Code:

A roofing contractor may not act as a public adjuster or advertise to adjust claims for any property for which the contractor is providing or may provide roofing services, regardless of whether the contractor holds a license under this chapter…”

source: http://www.legis.state.tx.us/tlodocs/83R/billtext/html/HB01183I.htm

HB-1183 was signed into law by Texas Governor Rick Perry in June of 2013 and went into effect on September 1, 2013.


June 26, 2012


RE: Adjusting claims by unlicensed individuals and entities

It has come to the attention of the Texas Department of Insurance that a number of contractors, roofing companies, and other individuals and entities not licensed by the department have been advertising or performing acts that would require them to hold a public insurance adjuster license. Additionally, the department has learned that the tactics used by these unlicensed individuals include visiting neighborhoods and areas of the state where languages other than English are commonly spoken. These unlicensed individuals often prey on unknowing consumers by promising to ‘work’ insurance claims to achieve a higher settlement.

All agents, adjusters, and insurers should be mindful that, pursuant to the Insurance Code Chapter 4102:

  1. A person who, for direct, indirect, or any other compensation, acts on behalf of an insured to negotiate or effect the settlement of an insurance claim is performing the acts of a public insurance adjuster.
  2. A person who advertises, solicits business, or holds himself or herself out to the public as an adjuster of claims for loss or damage under any policy of insurance covering real or personal property is also performing the acts of a public insurance adjuster.

With limited exceptions, a person performing the acts of a public insurance adjuster or holding himself or herself out as a public insurance adjuster in this state must be licensed under the Insurance Code Chapter 4102. Additionally, insurers cannot utilize roofers as de facto public insurance adjusters nor provide commissions to them in the form of direct or indirect payments or rebates that are in excess of amounts owed under the policy.

The department takes seriously the harm unlicensed individuals and entities can cause on the marketplace when they prey on unsuspecting consumers and the industry. I urge insurers, agents, adjusters, and consumers to help call attention to and halt attempts by unlicensed persons to negotiate insurance claims, and I encourage everyone to report these practices to the department and the TDI Fraud Unit (1-800-252-3439 – Report Fraud).

The Insurance Code provides for both civil and criminal penalties for violating this licensing requirement. The department will refer unlicensed persons performing the acts of a public insurance adjuster to the Texas Attorney General, pursue all remedies available under the Insurance Code, and highlight these practices to the Legislature so that it may consider further steps to regulate these persons and activities.


Eleanor Kitzman
Commissioner of Insurance
Texas Department of Insurance
(512) 463-6169
Consumer Help 1-800-252-3439