What You Need to Know About Adjusters

Consumer Counselor

Insurance Information for Michigan Consumers

[FIS-PUB 5400] Michigan Department of Insurance and Financial Services | 877-999-6442 | www.Michigan.gov/DIFS [11/19]

An adjuster investigates insurance claims to

determine the amount owed to the policyholder.

Adjusters investigate the circumstances of the

loss and the events that led up to the loss,

evaluate the amount of damage, verify that

coverage exists under the terms of an

insurance policy, and negotiate a settlement.

In Michigan, there are three kinds of adjusters:

• Company Adjuster – a salaried

employee of an insurance company who

is sent by the insurer to evaluate and

adjust claims.

• Independent Adjuster - an individual

licensed by the State of Michigan to

contract with and represent insurance

companies to evaluate and adjust crop,

fire and other hazards, and/or workers'

compensation losses. Many times

insurance companies hire independent

adjusters after a disaster due to the high

volume of claims being submitted to the

insurer.

• Public Adjuster (Adjuster for the

Insured) – an individual licensed by the

State of Michigan who offers services

for a fee to policyholders who want help

getting their claims paid.

A Company Adjuster does not require a license

from the State of Michigan. Independent

Adjusters and Public Adjusters must be

licensed. To verify if an adjuster is properly

licensed, go to the DIFS Licensing Locators

located on the DIFS website,

www.michigan.gov/difs

. Michigan licensed

attorneys may adjust claims in Michigan without

obtaining an Adjuster’s license but cannot

represent themselves to be “licensed adjusters”

without the proper license.

As a policyholder, review the terms of your

insurance policy to ensure you receive full

payment for your loss and to comply with policy

requirements. Also, review the DIFS Consumer

Counselor: “Insurance Policies and How to

Claim What is Yours”, which provides helpful

information about what to do when filing a

claim.

If you hire a Public Adjuster to assist you with

your claim, you should review and understand

fully the terms of your contract with that

adjuster. A Public Adjuster cannot provide

services without a written contract, and must

use the written contract form approved by the

DIFS Director. The contract form lists different

items for which an insurance company might

pay reimbursement and on which the adjuster’s

fee may be based. It is up to the insured to

indicate what part of the loss should be

included in the adjuster contract (i.e. building,

contents, etc.). A Public Adjuster works for you,

the policyholder, and is allowed to charge a fee

for his or her services which cannot exceed

10% of the amount paid by the insurer in the

settlement of the loss.

Typically, a policyholder hires a Public Adjuster

to assist in filing a claim and to ensure a

satisfactory settlement. Depending on the size

of the claim and the amount of damages, you

should determine if hiring a public adjuster and

paying this fee is appropriate for your situation.

If you hire a public adjuster, you should be

aware of your rights to cancel the contract. A

Public Adjuster contract can be canceled at any

time; however, the Adjuster is entitled to be

paid for any work performed up to that

[FIS-PUB 5400] Michigan Department of Insurance and Financial Services | 877-999-6442 | www.Michigan.gov/DIFS [11/19]

point. There are two exceptions: the Home

Solicitation Sales Act allows a homeowner to

cancel a residential contract within 3 days of the

contract being signed without having to pay the

Adjuster when the contract was solicited at the

homeowner’s residence. Also, the Michigan

Insurance Code allows a commercial or

residential contract to be canceled within 10

days of the contract being signed, without

having to pay the Adjuster, if it was signed

within 48 hours after conclusion of the loss-

producing occurrence.

You should also be aware of the requirements

of a Public Adjuster and certain things they are

prohibited from doing pursuant to the Michigan

Insurance Code. A Public Adjuster cannot do

any of the following:

• Employ anyone to help in adjusting the

loss unless that person is licensed as an

Adjuster or employed as a Solicitor.

• Represent himself to be a

representative of an insurance

company, a fire investigator or a person

connected with the fire department. A

Public Adjuster cannot be employed by,

own stock in, be an officer or director of,

or in any other manner be connected

with a fire repair contractor.

• Collect or attempt to collect a fee or

payment from a repair contractor for

obtaining repair work for that contractor.

• Attempt in any manner to solicit a loss

during the progress of a fire or while the

fire department or any of its

representatives are present at the

damaged premises.

• Loan or advance any money or

collateral of any kind to any insured

during the adjustment of any claim.

If you have a question or problem with your

claim or the Public Adjuster you hired, contact

the Department of Insurance and Financial

Services (DIFS) toll free at 1-877-999-6442.

Assistance is also available from the DIFS

website at: www.michigan.gov/difs

About DIFS

The mission of the Michigan Department of

Insurance and Financial Services is to ensure

access to safe and secure insurance and

financial services fundamental for the

opportunity, security and success of Michigan

residents, while fostering economic growth and

sustainability in both industries. In addition, the

Department provides consumer protection,

outreach, and financial literacy and education

services to Michigan citizens. For more

information please contact DIFS at 877-999-

6442 or visit www.michigan.gov/DIFS