Public Adjuster Contract: Fee Terms and Right to Cancel

A public adjuster contract is the written agreement that lets the adjuster represent you on your claim and sets their fee. It should state the fee percentage, what the fee applies to, the services you'll get, and how to cancel, and in most states you have a short window to cancel without penalty.

Read it before you sign, every line. This guide explains what's usually in a public adjuster contract, which fee terms to look at closely, and the cancellation rules in several states.

Does a public adjuster need a written contract?

In the states with public adjuster laws, generally yes. For example:

• Texas: a license holder may not act as a public adjuster until a written contract is signed by both sides on a form the commissioner has approved (Tex. Ins. Code s. 4102.103 ↗).
• California: the contract must be in writing, on a form approved by the commissioner, and signed in duplicate (Cal. Ins. Code s. 15027 ↗).
• New York: the adjuster "must obtain a signed compensation agreement from you" (NY DFS ↗).

Never let anyone start work on your claim on a handshake.

What's in a public adjuster contract

The NAIC Public Adjuster Licensing Model Act ↗, a template many states draw from, lists terms a contract should include:

• The adjuster's full name, business address, phone number and license number
• The title "Public Adjuster Contract"
• Your name, address, insurer and policy number
• A description of the loss and its location
• A description of the services to be provided
• Signatures and the date each side signed
• A statement that the adjuster is bonded
• The full fee, and if it's a percentage, the exact percentage

States add their own requirements. A few examples:

• Texas contracts must include a notice in 12-point bold type: "WE REPRESENT THE INSURED ONLY" (s. 4102.103 ↗). TDI also publishes a sample contract and suggests checking that it says whether the adjuster will inspect your property, talk to your insurer and how long settling will take (TDI ↗).
• California contracts must state the fee percentage and the base it applies to, have the insured initial the fee, and include a cancellation statement next to the signature line (s. 15027 ↗).
• Florida contracts must include specific cancellation language in at least 18-point bold type right before your signature (Fla. Stat. s. 626.854(7) ↗).

The disclosure you should get before signing

The NAIC model law says that before you sign, the adjuster should give you a separate disclosure explaining the three types of adjusters, that you are "not required to hire a public adjuster," and that you have the right to talk directly with your insurer, its adjuster and your attorney. California requires a similar pre-signing disclosure (s. 15027 ↗).

Fee terms to read closely

The fee section is where most problems start. Check:

1. The percentage. Is it within your state's cap, if there is one? Texas caps fees at 10% (s. 4102.104 ↗) and New York at 12.5% (11 NYCRR 25.7 ↗). Florida's caps depend on the type of claim. See our public adjuster fees guide.
2. The fee base. Does the percentage apply only to money paid after you sign? Florida bars fees on payments made before the contract (s. 626.854(11) ↗), and California says the fee can't leave you with less than the insurer paid before the contract date (s. 15027 ↗). Elsewhere, negotiate this in writing.
3. Excluded categories. Florida bars fees on the deductible, and on additional living expenses unless you sign a separate agreement. United Policyholders ↗ notes some adjusters don't take a fee on living expenses.
4. Expenses. The NAIC model law says reimbursable expenses should be listed by type with dollar estimates, and any extra expenses approved by you first.
5. How payment works. The contract may name the adjuster as a co-payee on insurance checks. That's common and allowed under the NAIC model.

Terms that shouldn't be there

The NAIC model law says a contract should not:

• Let the adjuster collect a fee on money that's owed but not yet paid
• Let the adjuster take the entire fee out of the first check, instead of a percentage of each check
• Require the insurer to issue checks only in the adjuster's name
• Charge you collection costs or late fees

California has similar limits (s. 15027 ↗). The NAIC model also says an adjuster shall not demand a fee, retainer or deposit before the claim is settled.

Your right to cancel: state examples

Most states give you a short "cooling off" period to cancel without penalty. These are examples, not a full list. Check your state's page.

How to cancel

• Put it in writing. Florida requires written notice sent by certified mail, return receipt requested, or another mailing method that gives proof, to the address in the contract (s. 626.854(7) ↗).
• Keep proof. Save a copy of your notice and the mailing receipt.
• Watch the clock. Count days exactly as your state does, such as calendar days, business days or hours.

In California, if you cancel within the window, the adjuster must return payments within five business days and generally can't charge for services before cancellation, except itemized out-of-pocket emergency expenses (s. 15027 ↗).

After the window closes

TDI says that after the 72 hours in Texas, "you generally can't get out of the contract" (TDI ↗). In other states, ending the contract later may mean you owe a fee for work done or on money already recovered, depending on the contract terms. United Policyholders suggests asking, before you sign, whether you can end the contract before settlement and what you would owe.

If you think a contract was obtained through misrepresentation, some states give extra rights. California lets you rescind "without time limit" if the adjuster misrepresented or concealed a material fact before you signed (s. 15027 ↗). For a dispute like this, talk to your state insurance department or an attorney.

Contract checklist before you sign

• License number matches the state lookup
• Fee percentage filled in, not blank
• Fee base says new money only, if you agreed to that
• Excluded categories listed, like living expenses or deductible
• Expenses listed with estimates
• Cancellation window and instructions included
• You have a signed copy

Need help vetting who you'll sign with? See how to choose a public adjuster.

Compare contracts with confidence

Getting two or three proposals is the easiest way to spot an unfair term. Get matched with a licensed public adjuster and ask each one for their contract in advance.

This guide is general information, not legal advice. For questions about a specific contract, talk to a licensed attorney.

Frequently asked questions

How do I cancel a public adjuster contract?

Send written notice within your state's cancellation window, using the method in your contract, and keep proof. Florida, for example, requires certified mail or another mailing method with proof of delivery.

How long do I have to cancel a public adjuster contract?

It depends on your state. Examples: 72 hours in Texas, three business days in New York and California, and 10 days in Florida, with longer windows in some emergency or disaster situations.

Can I cancel after the cancellation period?

Usually you can end the relationship, but you may owe fees under the contract. Texas regulators say you generally can't get out of the contract after 72 hours. Ask before signing what you'd owe if you end it early.

Can a public adjuster contract charge a fee on money I already received?

Some states forbid it, including Florida, New York and California. In other states it depends on the contract, so ask for a fee on new money only.

Should a public adjuster contract be signed on the spot?

No reputable adjuster should pressure you to. Take the contract home, read it, compare offers and check the license before signing.