How to Enforce Public Adjuster Ethics


A Video Explaining the Need for Ethical Public Adjusters

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Public Adjusters are claims professionals who are employed exclusively by a policyholder who has sustained an insured first party property loss. The public adjuster handles every detail of the claim, working closely with the insured to provide the most equitable and prompt settlement possible.

The conduct of the public adjuster is governed, in most states, by statute. For example, the state of California uses the following statutes to regulate the business of a public insurance adjuster starting at §§ 15000 et seq of the Insurance Code and presented in full in Appendix 1. As a licensing statute, it attempts to require a public insurance adjuster to act ethically and in good faith on behalf of his or her client.

To perform the duties imposed upon a public adjuster to properly represent an insured should inspect the loss site immediately, analyze the damages, assemble claim support data, review the insured’s coverage, determine current replacement costs and exclusively serve the client, not the insurance company while working ethically with the insurer’s adjuster.

The National Association of Public Insurance Adjusters (NAPIA) publishes a code of conduct which sets forth the ethical standards that all public insurance adjusters should follow. It provides:

The public adjuster should not engage in the unauthorized practice of law, not engage in activities that may be construed as presenting a conflict of interest or obtaining a financial interest in salvaged property that is the subject of a claim, nor should the public adjuster use advertisements that violate the Insurance Code. The public adjuster must use contract forms that are approved by the commissioner.

An example of less than appropriate action by a public insurance adjuster and the lawyer who represented the same client, involved a claim for the 1994 Northridge earthquake that resulted in claims of multiple wrongful claims handling. The 1994 Northridge, California earthquake caused billions of dollars in damages across Southern California.

Zalma Opinion

Public adjusters perform an important service to busy professionals who simply do not have the time or skill to deal with a first party property claim. By agreeing to pay the public adjuster a portion of the claim payment the policyholder understands that after the fee is paid the payment by the insurer will not be enough to complete repair and will take the cost as an expense worthy to save the insured the time needed to deal with the insurer. An ethical public adjuster will resolve a claim quickly and fairly. An unethical public adjuster will not. It is imperative that state regulators enforce the requirement that public adjusters comply with state law and ethically work to resolve claims.

© 2021 – Barry Zalma

Barry Zalma, Esq., CFE, now limits his practice to service as an insurance consultant specializing in insurance coverage, insurance claims handling, insurance bad faith and insurance fraud almost equally for insurers and policyholders.

He also serves as an arbitrator or mediator for insurance related disputes. He practiced law in California for more than 44 years as an insurance coverage and claims handling lawyer and more than 54 years in the insurance business.

He is available at and Mr. Zalma is the first recipient of the first annual Claims Magazine/ACE Legend Award. Over the last 53 years Barry Zalma has dedicated his life to insurance, insurance claims and the need to defeat insurance fraud. He has created the following library of books and other materials to make it possible for insurers and their claims staff to become insurance claims professionals.

Go to the podcast Zalma On Insurance at;  Follow Mr. Zalma on Twitter at; Go to Barry Zalma videos at ; Go to Barry Zalma on YouTube-; Go to the Insurance Claims Library –  The last two issues of ZIFL are available at  podcast now available at

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