3 CCR 702-1-2-19-5 - Contract and Disclosure Statement between Public Adjuster and Insured

A. Public adjusters shall ensure that all contracts for their services are in writing and contain the following:

1. Legible full name of the adjuster signing the contract, as specified in Division records;

2. Permanent home state business address and phone number;

3. Division license number;

4. Title of "Public Adjuster Contract";

5. The insured's full name, street address, underwriting insurance company name and policy number, if known or upon notification;

6. A description of the loss and its location, if applicable;

7. Description of the services to be provided to the insured;

8. Signatures of the public adjuster and the insured;

9. Date contract was signed by the public adjuster and date the contract was signed by the insured;

10. Attestation language stating that the public adjuster is fully bonded pursuant to state law;

11. The policy number and issuing insurance company name for the surety bond required by § 10-2-417(2), C.R.S., and this regulation;

12. Full salary, fee, commission, compensation or other considerations the public adjuster is to receive for services; and

13. Notice of the right to rescind the contract within seventy-two (72) hours after the signing of the contract.

B. The contract may specify that the public adjuster may be named as a co-payee on an insurer's payment of a claim.

1. If the compensation is based on a share of the insurance settlement, the exact percentage shall be specified.

2. Initial expenses to be reimbursed to the public adjuster from the proceeds of the claim payment shall be specified by type, with dollar estimates set forth in the contract and with any additional expenses approved by the insured.

3. Compensation provisions in a public adjusting contract shall not be redacted in any copy of the contract provided to the Division.

C. If the insurer, within seventy-two (72) hours after the date on which the loss is reported to the insurer, either pays or commits in writing to pay to the insured the policy limit of the policy, the public adjuster shall:

1. Not receive a commission consisting of a percentage of the total amount paid by the insurer to resolve a claim;

2. Inform the insured that the loss recovery amount might not be increased by the insurer; and

3. Be entitled to only reasonable compensation from the insured for services provided by the public adjuster on behalf of the insured until the claim is paid or until the insured receives a written commitment to pay from the insurer. Such reasonable compensation shall be based on the time spent and the expenses incurred by the public adjuster on the claim.

D. A public adjuster contract shall not contain any contract term or clause that:

1. Allows the public adjuster's percentage fee to be collected when money is due from an insurance company, but not paid, or that allows a public adjuster to collect the entire fee from the first check issued by an insurance company, rather than as a percentage of each check issued by an insurance company;

2. Requires the insured to authorize an insurance company to issue a check only in the name of the public adjuster;

3. Imposes collection costs or late fees; or

4. Precludes any person from pursuing civil remedies.

E. Prior to the signing of the contract the public adjuster shall provide the insured with a separate disclosure document regarding the claim process and the contract that states:

1. Property insurance policies obligate the insured to present a claim to his or her insurer for consideration. There are three (3) types of adjusters that could be involved in that process. The definitions of the three (3) types are as follows:

a. "Company adjuster" means the insurance adjusters who are employees of an insurance company. They represent the interest of the insurance company and are paid by the insurance company. They will not charge you a fee.

b. "Independent adjuster" means the insurance adjusters who are hired on a contract basis by an insurance company. They represent the insurance company's interest in the settlement of the claim and are paid by the insurance company. They will not charge you a fee.

c. "Public adjuster" means the insurance adjusters who do not work for any insurance company. They work for you, the insured, to assist in the preparation, presentation and settlement of the claim. The insured hires them by signing a contract agreeing to pay them a fee or commission based on a percentage of the settlement, or other method of compensation.

2. The insured is not required to hire a public adjuster to help the insured meet his or her obligations under the policy, but has the right to do so;

3. The insured has the right to initiate direct communications with the insured's attorney, the insurer, the insurer's adjuster, and the insurer's attorney, or any other person regarding the settlement of the insured's claim;

4. The public adjuster is not a representative or employee of the insurer;

5. The salary, fee, commission, or other consideration is the obligation of the insured, not the insurer; and,

6. The insured has the right to rescind the contract within seventy-two (72) hours of the contract being signed. The rescission shall be in writing, addressed to the public adjuster, at the address in the contract, and the insurer, and placed in the mail or delivered to the public adjuster within seventy-two (72) hours.

F. The contracts and disclosure statement shall be executed in duplicate to provide an original contract and disclosure statement to the public adjuster and an original contract and disclosure statement to the insured. The public adjuster's original contract and disclosure statement shall be available at all times for inspection by the Commissioner or his or her designee.

G. The public adjuster shall provide the insurer a notification letter, which has been signed by the insured, authorizing the public adjuster to represent the insured's interest. The letter shall be accompanied by a copy of the signed public adjuster contract.

H. The public adjuster shall give the insured written notice of the insured's rights as provided in the Colorado Consumer Protection Act, Title 6 of the Colorado Revised Statutes.

I. The insured has the right to rescind the contract within seventy-two (72) hours of the contract being signed. The rescission shall be in writing, addressed to the public adjuster, at the address in the contract, and the insurer, and placed in the mail or delivered to the public adjuster within seventy-two (72) hours.

J. If the insured exercises the right to rescind the contract, anything of value given by the insured under the contract will be returned to the insured within fifteen (15) business days following the receipt by the public adjuster of the cancellation notice.

Notes

3 CCR 702-1-2-19-5

37 CR 11, June 10, 2014, effective 6/30/2014 37 CR 11, June 10, 2014, effective 7/1/2014 38 CR 09, May 10, 2015, effective 6/1/2015 38 CR 20, October 25, 2015, effective 11/15/2015 40 CR 19, October 10, 2017, effective 11/1/2017 40 CR 21, November 10, 2017, effective 12/1/2017 40 CR 21, November 10, 2017, effective 1/1/2018 41 CR 21, November 10, 2018, effective 12/1/2018 43 CR 21, November 10, 2020, effective 12/1/2020 45 CR 21, November 10, 2022, effective 11/30/2022