What are ethics? Why are ethics important for the public adjuster industry? Does state law for Public Adjusters include ethics? Tiger Adjusters® answers these questions and more.
Get Help with Your Insurance ClaimEthics: moral principles that govern a person's behavior or the conducting of an activity.
Ethics concerns the principles of right and wrong that guide our decisions and that affect societal behaviors and laws. The primary question being asked is ‘How ought one to live?’
Ethics originated independently in various contexts. For the Western philosophical canon, most trace this history back to the ethical systems of the Ancient Greeks, such as The Sophists and later Plato and Aristotle. However, ethics history may be traced even further to Sumerian literature, the Code of Hammurabi, the ethical schools of Ancient Egypt and the Hebrew Torah.
Morals are about our own principles regarding right and wrong. Our morals are an extension of the ethical framework and philosophy that we choose to live by.
Ethics in public adjusting is about the choices a Public Adjuster makes with:
When dealing with insurance companies, it’s vital to maintain integrity, ensuring claims are fair and justified.
Managing conflicts within a claim settlement involves taking steps to ensure a Public Adjuster's decisions do not effect the integrity of their work.
A Public Adjuster cannot be in conflict with the needs of a client. It is against the law for a Public Adjuster to act as a contractor on a claim they are the Public Adjuster on. In most states, it is also against the law to accept a referral fee or offer one to contractors.
A person who holds a fiduciary duty to another is expected to act completely and solely in the interest of the person to whom they hold the fiduciary duty. A relationship that carries a fiduciary duty is that of the Public Adjuster to their clients.
Public Adjusters must understand the spirit behind the law and abide by that spirit even as they seek to follow state insurance law. That includes not providing legal advice (they are not an attorney), but instead focus on insurance claim processing services.
Public Adjusters must act in good faith and with full transparency in regards to their fee, their loss estimate arguments and proof of damage, and with how they handle client funds. Public Adjusters must keep the client beneficiary funds separate from their own fee.
Public Adjusters in virtually all jurisdictions are bound by a code of ethics. Many adjusters are licensed and practice in multiple states and therefore have multiple codes that they must follow. Violations of any state's ethical standards can result in the revocation of the adjuster's license to handle claims in any given state. A revocation in one state can further result in a revocation in every state in which an adjuster is licensed.
EXAMPLE: ETHICS REQUIREMENT
Texas law states: "Sec. 4102.005. CODE OF ETHICS. The commissioner by rule shall adopt:(1) a code of ethics for public insurance adjusters that fosters the education of public insurance adjusters concerning the ethical, legal, and business principles that should govern their conduct; (2) recommendations regarding the solicitation of the adjustment of losses by public insurance adjusters; and (3) any other principles of conduct or procedures that the commissioner considers necessary and reasonable." LINK TO STATE LAW
Conflicts of interest arise when a Public Adjuster's personal interests could influence, or appear to influence, their professional judgment.
The most common is inappropriate conflict of interest in public adjusting is in how building contractor relationships are handled. Just as it’s against the law for a contractor to take on the role of Public Adjuster, it is also against the law for a Public Adjuster to act as a contractor on a claim they are the Public Adjuster on.
The unauthorized practice of public adjusting refers to instances where someone other than a licensed claims adjuster works with a policyholder to settle a property insurance claim. Over the last several years, there has been an increase in unauthorized practice of public adjusting activity by contractors who choose to act as and perform adjusting tasks that they are not licensed or trained to perform.
To further combat conflicts of interest, most states have placed additional limits on what compensation Public Adjusters can receive. For instance, in Texas, Public Adjusters cannot pay a referral fee, commission, or any other valuable consideration in exchange for the referral.
Ethical marketing is all about honesty, respect, and fairness. Many states also require Public Adjusters to abide by certain ethical marketing standards.
All Tiger Adjusters® Public Adjusters have gone through additional ethics training as a part of the Tiger Adjusters® Certified Roar Training program.
All Tiger Adjusters® Public Adjusters have their training certification rank and badge (as well as their state license information) on their personal profile page. Click here for an example: Brendan Steinbrecher
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