The Texas Supreme Court is presently considering the constitutionality of the State’s public adjuster law, which prevents contractors from advertising themselves as able to assist the public with negotiating an insurance claim without first obtaining a public adjuster license. The case is Texas Department of Insurance v. Stonewater Roofing Ltd.
A public adjuster is hired by the public to advise and assist policyholders in the presentation of an insurance claim. In recent years, some contractors have attempted to step into the claim assistance arena, seeking to negotiate directly with an insurance company on behalf of their customer/policyholder, blurring the lines between a contractor and public adjuster and sidestepping the public adjuster licensing requirement and all related state regulation. This lawsuit appears to be an attempt to legitimize that practice in Texas.
46 states have currently imposed licensure requirements for public adjusters. Accordingly, a finding that the Texas Public Adjuster Law presents constitutional issues could have far reaching effects as contractors will undoubtedly raise similar challenges in other states.
HKR will continue to monitor the suit and report on any further developments. If you have any questions or would like additional information, please contact any member of HKR’s team.