Adjuster Ethics

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Adjuster Ethics

It is vital to understand Adjuster Ethics before handling any claims for any carriers. Before you handle a claim the understanding of the do’s and don’ts of the industry are crucial to avoid any complications.

Understanding Legal vs. Ethical Requirements

Ethics represents the spirit of the law. As we can see almost daily in the news, the letter of the law is never fixed. It is constantly subject to interpretation and change. Adhering to the spirit of the law and its underlying intentions is a much better guide for fulfilling professional responsibilities, but this demands more thought and careful reflection. It means that adjusters must first understand the law and then consider the intent and motivation behind its creation.

What is the letter of the law and its broader spirit or intent?

Legal requirements include

• A timely response to communications from insureds and insurers
• A timely and thorough claim investigation
• Proper documentation and record keeping with respect to claim files
• Proper disclosure
• Securing a prompt, fair, and equitable settlement.

The Ethical Requirements

The ethical requirements can be identified by looking at the underlying intentions of the law and extending these beyond the specific legal requirements.

These would include:

• Providing adequate attention to the insured client
• Not abusing the position of expert knowledge to take unfair advantage
• Being willing to address questions from insureds patiently
• Being well versed in the adjusting process
• Remaining unbiased during the adjusting process
  Accurately communicating the terms and conditions of a settlement.

Code of Ethics

The work of adjusting insurance claims engages the public trust. An adjuster shall put the duty for fair and honest treatment of the claimant above the adjuster’s own interests in every instance. The following are standards of conduct that define ethical behavior and constitute a code of ethics is binding on all adjusters:

• An adjuster shall not directly or indirectly refer or steer any claimant needing repairs or other services in connection with a loss to any person with whom the adjuster has an undisclosed financial interest, or who will or is reasonably anticipated to provide the adjuster any direct or indirect compensation for the referral or for any resulting business.
• An adjuster shall treat all claimants equally. – An adjuster shall not provide favored treatment to any claimant. – An adjuster shall adjust all claims strictly in accordance with the insurance contract. – An adjuster shall not approach investigations, adjustments, and settlements in a manner prejudicial to the insured.
• An adjuster shall make truthful and unbiased reports of the facts after making a complete investigation.
• An adjuster shall handle every adjustment and settlement with honesty and integrity and allow a fair adjustment or settlement to all parties without any remuneration to himself except that to which he is legally entitled.
• An adjuster, upon undertaking the handling of a claim, shall act with dispatch and due diligence in achieving a proper disposition of the claim.
• An adjuster shall promptly report to the Department any conduct by any licensed insurance representative of this state which violates any provision of the Insurance Code or Department rule or order.
• An adjuster shall exercise extraordinary care when dealing with elderly clients to assure that they are not disadvantaged in their claims transactions by failing memory or impaired cognitive processes.
• An adjuster shall not negotiate or settle directly or indirectly with any third-party claimant represented by an attorney, if the adjuster has knowledge of such representation, except with the consent of the attorney. For purposes of this subsection, the term “third-party claimant” does not include the insured or the insured’s resident relatives.
• An adjuster is permitted to interview any witness, or prospective witness, without the consent of opposing counsel or party. In doing so, however, the adjuster shall scrupulously avoid any suggestion calculated to induce a witness to suppress or deviate from the truth, or in any degree affect the witness’s appearance or testimony during deposition or at the trial. If any witness is making or giving a signed or recorded statement so requests, the witness shall be given a copy of the statement.
• An adjuster shall not advise a claimant to refrain from seeking legal advice, nor advise against the retention of counsel to protect the claimant’s interest.
• An adjuster shall not attempt to negotiate with or obtain any statement from a claimant or witness at a time that the claimant or witness is, or would reasonably be expected to be, in shock or serious mental or emotional distress as a result of physical, mental, or emotional trauma associated with a loss. The adjuster shall not conclude a settlement when the settlement would be disadvantageous to, or to the detriment of, a claimant who is in the traumatic or distressed state described above.
• An adjuster shall not knowingly fail to advise a claimant of the claimant’s claim rights in accordance with the terms and conditions of the contract and of the applicable laws of this state. An adjuster shall exercise care not to engage in the unlicensed practice of law as prescribed by the Florida Bar.
• A company or independent adjuster shall not draft special releases called for by the unusual circumstances of any settlement or otherwise draft any form of release unless advance written approval by the insurer can be demonstrated to the Department.
• Except as provided above, a company or independent adjuster is permitted only to fill in the blanks in a release form approved by the insurer they represent.
• An adjuster shall not undertake the adjustment of any claim concerning which the adjuster is not currently competent and knowledgeable as to the terms and conditions of the insurance coverage, or which otherwise exceeds the adjuster’s current expertise.