Elaine is a Senior Specialist at ReSource Pro Compliance
As insurers and state regulators tally losses from Hurricane Ian, climate experts advise bracing for more intense storm, flooding, and wildfire events as “traditional” weather patterns shift. To handle claims arising from such CAT events, some states contract with independent adjuster firms to supplement their own rosters. Many jurisdictions, however, still rely on licensing emergency adjusters to meet consumers’ needs after disasters.
The Emergency Adjuster
The NAIC defines an emergency adjuster as: “a person who is otherwise qualified to adjust claims but not already licensed in the state where the catastrophe has been declared [who] may act as an emergency independent adjuster and adjust claims arising from the declared catastrophe.”
Keep in mind that requirements and procedures for other types of adjusters may be different. Appraisers may also need to meet different requirements. Lastly, emergency adjuster licensing applies only to non-residents. A would-be resident adjuster must follow their state’s normal licensing/registration procedures, regardless of circumstances.
Becoming an Emergency Adjuster
While exact procedures for independent adjusters vary by state, they typically fall into one of four categories:
- Secure a regular state adjuster license
- Secure a temporary state adjuster license
- Register with the state
- No requirements
The process often begins with an appropriate government official formally declaring a state of emergency for a specified area. This is usually the governor or state legislature. The insurance commissioner then issues a bulletin, notice, or other communication outlining the standards and procedures for credentialing emergency independent adjusters. In September 2022, for example, the South Carolina Department of Insurance issued this bulletin in the wake of Hurricane Ian. Note that the Commissioner’s bulletin includes a specific reference to the Executive Order declaring the state of emergency.
In almost half of the states, however, the Commission can declare a state of emergency directly or in consultation with the governor. And in Minnesota, insurers or adjusting firms can petition the Commissioner to authorize emergency adjusters.
Independent adjusters wanting to work in a disaster area typically must provide the following information:
- Their name and social security number
- The name of the insurer they will represent and the effective date of their contract with that insurer
- The name of the catastrophic event and a catastrophe/loss control number
- Any other information the insurance commissioner deems necessary
Many states don’t charge a fee for emergency adjuster licenses/registrations. Even in states that assess a fee, the amount rarely exceeds $75.
While state authorities must invite emergency adjusters into their jurisdiction once there, it’s their relationship with a particular insurer that determines their ability to work. The NAIC Model Law requires the insurer to notify the commissioner that it is utilizing emergency adjusters within five days of their deployment. This standard has been widely adopted, but several states require that the temporary license/registration be completed and approved before work begins.
In addition to the license or registration process, emergency adjusters in some states must have special forms of credentials. These may include state-issued badges allowing claims personnel into an emergency area, a special state-issued ID, or certification or appointment from an existing state adjuster. After, CAT adjusters work in very dangerous areas!
Finally, it’s important to remember that these are temporary licenses/registrations. The NAIC model law recommends that they remain in effect for no more than 90 days. Again, this recommendation has been widely adopted by the states, although periods of 120 or even 180 days aren’t uncommon either. Most states’ laws also grant the insurance commission the power to extend the period, if needed.
Crossing Jurisdictional Borders
As mentioned previously, how or if adjusters can operate in an emergency varies among jurisdictions. Unfortunately, CAT events rarely recognize state borders. Prior to deploying a CAT response team, the insurer or adjusting firm needs to determine which jurisdictions are involved and what their credentialing requirements are. Even in an emergency, adjusters who provide services without the appropriate documentation may still face regulatory sanctions.
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