Why Only Licensed Public Adjusters Can Legally Adjust Insurance Claims
Beware of Unlicensed “Help” That Could Jeopardize Your Settlement
When disaster strikes and the insurance process begins, many homeowners understandably feel overwhelmed—and turn to anyone who offers help. Contractors, restoration companies, or mitigation vendors may offer to "handle your insurance claim" as a bundled service. They may even say they can negotiate your settlement to save you time or money.
But here’s the truth: only licensed public insurance adjusters (PAs) or attorneys are legally permitted to represent policyholders in adjusting insurance claims. Anyone else offering to negotiate your claim, speak on your behalf with your insurer, or manage your insurance recovery is breaking the law.
What Does “Adjusting a Claim” Actually Mean?
Adjusting a claim involves:
Interpreting Policy language and coverage
Preparing and submitting estimates
Negotiating claim values
Disputing denied items or low offers
Communicating directly with your insurer about your legal rights to payment
Only someone with the proper license and credentials is allowed to do this on your behalf.
Contractors and Restoration Companies Are Not Adjusters
While a Contractor or mitigation Vendor may play a valuable role in estimating damage or executing repairs, they cannot:
Negotiate with your insurer
Submit a claim on your behalf
Interpret your policy
Represent you in a dispute
Doing so is considered unauthorized public adjusting, and in most states—including California—it’s ILLEGAL.
Even worse, most contractors and vendors don’t understand:
Coverage buckets and how policies separate funds for different categories (Dwelling, ALE, Contents, etc.)
How Depreciation and recoverable payments work
Deadlines and documentation requirements
Complex issues like code upgrades, policy exclusions, or Appraisal clauses
Trying to “save money” by having an unlicensed person adjust your claim may result in:
Underpaid claims
Lost reimbursement opportunities
Delayed payments
Legal complications
What It Takes to Become a Licensed Public Adjuster
Becoming a licensed PA is not easy—and for good reason. It requires a detailed understanding of insurance law, building science, construction costs, policy structures, and ethics.
In California, for example, a public insurance adjuster must:
Complete 20 hours of pre-licensing education
Pass a state-administered exam
Accrue two years of full-time experience (or 5,000 hours of practical training)
Carry a surety bond
Complete 24 hours of continuing education every two years, including 3 hours of ethics training
These requirements exist to protect homeowners. They ensure public adjusters have the knowledge and accountability needed to advocate effectively and legally.
How to Spot Red Flags
Be cautious of any contractor or vendor who:
Offers to “handle” your claim in exchange for work
Speaks to your insurer about payments on your behalf
Tells you not to involve a public adjuster or attorney
Bundles insurance help into a construction or Remediation contract
Always ask:
Are you licensed as a public adjuster in this state?
Can I see your license and bond information?
Are you being paid directly by the insurance company?
If they can’t answer, walk away.
Wrap-Up
Your insurance claim is a legal and financial negotiation. You deserve representation from someone who is qualified, licensed, and working solely in your best interest.
At Loti, our licensed public adjusters meet all state requirements and specialize in large, complex residential claims. We help homeowners navigate insurance policies, prepare complete documentation, and negotiate full recoveries—legally and professionally.
If you’re unsure who should be advocating for your claim, start by asking: are they licensed?