The fundamentals of the insurance adjuster's code of ethics

Review the basics of the adjuster code of ethics and a breakdown of the differences between public, independent and company adjusters.

As with any profession, at times less-than-savory characters will enter the adjusting field and abuse the role for their own personal benefit. As a result, many states put in place a code of ethics that adjusters must follow, according to the National Association of Insurance Commissioners. Credit: The KonG via Adobe Stock

Editor’s note: This column is part of PropertyCasualty360’s Foundations of P&C Insurance series, which aims to bring new insurance professionals up to speed, while keeping industry veterans sharp and helping inform policyholders. On Fridays, PC360 will offer up fresh content covering the nitty-gritty details of P&C insurance, tips for professional development, articles looking at the industry’s more niche concepts, and the history of certain lines and programs.

Charged with investigating claims, determining coverages, examining relevant documents and inspecting property damages, adjusters play a vital role in the insurance ecosystem.

Public adjusters represent policyholders, while independent and staff adjusters represent insurers, according to the National Association of Insurance Commissioners. Credit: S Hallo/Adobe

As with any profession, at times less-than-savory characters will enter the adjusting field and abuse the role for their own personal benefit. As a result, many states put in place a code of ethics that adjusters must follow, according to the National Association of Insurance Commissioners, which noted that some states required ethics training as part of continuing education requirements to obtain an adjusters license.

Additionally, professional organizations for independent and public adjusters require that members adhere to ethical codes.

What follows is a combination of the code of ethics instilled in the members of the National Association of Public Insurance Adjusters (NAPIA) and the National Association of Independent Insurance Adjusters. For more specifics on the code of ethics for your state, or any requirements needed for an adjuster license, reach out to the insurance regulator in your locale or where you intended to operate.

  1. Adjusters should carry out their jobs with a spirit of fairness and justice to their clients, the companies and the public.
  2. Adjusters should never partake in any improper solicitation.
  3. No misrepresentation of any kind should be made to a policyholder or to an insurance company.
  4. Commission rates should be fair and equitable and in line with any laws or regulations set by insurance departments.
  5. Adjusters should work in concord with one another as well as clients and insurance company representatives to develop a cordial environment to “foster a harmonious relationship with all branches of the insurance business and with the general public,” according to the NIPIA.
  6. Adjusters should be qualified to handle the claims they take on and attempt to find competent technical assistance for claims beyond their level of expertise.
  7. Adjusters not engage in the unauthorized practice of law.
  8. Adjusters should not act as a contractor in the mitigation, repair or restoration of damaged property.
  9. Adjusters should only make truthful and unbiased statements, and resist influence that would result in improper or extravagant settlements.
  10. Adjusters should not use any form of agreement, advertising or printed material that would be harmful to the profession or that runs afoul of local laws or regulations.

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