1.1 Michigan Adjuster Licensing, Exemptions & Maintenance (MCL 500.1200–.1246)
Key Takeaways
Michigan offers three PSI adjuster exam tracks (100 scored questions, 2 hours, $41 exam fee, no new remote-exam registrations since June 10, 2025): Series 16-72 and Series 16-71 require a 70% passing score, whereas Series 16-70 (Adjuster for the Insured) requires 71%
Under MCL 500.1222(2), salaried insurer staff adjusters are exempt ONLY when adjusting losses under policies issued by that specific insurer—not affiliated insurers in a holding company group—and Michigan has NO catastrophe adjuster licensing exemption
MCL 500.1224(4) prohibits DIFS from issuing an adjuster license to anyone employed by, owning stock in, serving as an officer or director of, or otherwise connected with a fire repair contractor
An Adjuster for the Insured (MCL 500.1226–.1228) cannot adjust workers' compensation claims, cannot charge more than 10% of the settlement paid, must allow a 10-day voidability window on contracts signed within 48 hours after a loss ends, and must retain records for 6 years
Michigan adjuster licenses cost a $10 application fee plus a $5 annual license fee, expire every year on March 31, require 0 hours of continuing education, and mandate reporting any mailing address, email address, or name change within 30 days
Michigan Adjuster Licensing, Exemptions & Maintenance (MCL 500.1200–.1246)
Quick Answer: In Michigan, anyone who adjusts insurance losses for compensation on behalf of an insurer or an insured must hold an adjuster license issued by the Department of Insurance and Financial Services (DIFS) unless statutorily exempt under MCL 500.1222(2). Adjuster licenses expire annually on March 31, carry a $10 initial application fee plus a $5 annual license fee, require 0 hours of continuing education (CE), and require reporting address or name changes within 30 days.
Insurance adjusting in Michigan is governed by Chapter 12 of the Michigan Insurance Code of 1956 (Public Act 218 of 1956, MCL 500.1200–.1246). Regulatory oversight rests with the Michigan Department of Insurance and Financial Services (DIFS) and its chief executive officer, the Director of DIFS, who is appointed by the Governor with the advice and consent of the Michigan Senate. The Director is empowered to examine applicants, issue and renew licenses, investigate consumer complaints, audit claim records, and enforce administrative penalties.
DIFS Adjuster License Tracks & PSI Exam Requirements
Michigan divides licensed adjusters into two broad statutory classifications—Independent Adjusters (who represent insurers or self-insured entities) and Adjusters for the Insured (commonly known as public adjusters, who represent policyholders exclusively in first-party property and casualty claims). DIFS contracts with PSI Services LLC to administer three distinct adjuster licensing examinations.
Effective June 10, 2025, DIFS directed PSI to stop accepting new registrations for remote-proctored insurance examinations; remote exams not taken by June 30, 2025 had to be rescheduled at a test center, so candidates now test in person at an authorized PSI examination center. Every Michigan adjuster exam contains 100 scored multiple-choice questions with a 2-hour (120-minute) time limit and a $41 examination fee.
| PSI Exam Series | License Title & Scope of Authority | Scored Items & Time Limit | Passing Score | Exam Fee |
|---|---|---|---|---|
| Series 16-72 | Independent Adjuster (With Workers' Compensation) — Adjusts property, casualty, auto, and Michigan Workers' Disability Compensation claims for insurers | 100 items / 2 hours | 70% | $41 |
| Series 16-71 | Independent Adjuster (Without Workers' Compensation) — Adjusts property, casualty, and auto claims for insurers; excludes workers' compensation | 100 items / 2 hours | 70% | $41 |
| Series 16-70 | Adjuster for the Insured (Public Adjuster) — Represents insureds only in first-party property and casualty claims; prohibited from workers' compensation | 100 items / 2 hours | 71% | $41 |
Core Qualification Standards (MCL 500.1200, .1222, .1224)
Under MCL 500.1222(1), a person shall not adjust losses for or on behalf of an insurer or an insured for compensation in Michigan unless licensed or exempt. To qualify under MCL 500.1224:
- Minimum Age: The applicant must be at least 18 years of age (an NIPR/DIFS application requirement).
- Good Moral Character: Under MCL 500.1200 and Public Act 381 of 1974 (MCL 338.41–.47), the applicant must possess good moral character, defined as the propensity on the part of the person to serve the public in the licensed area in a fair, honest, and open manner. A felony conviction alone is not an automatic permanent bar unless it directly demonstrates a lack of good moral character under statutory rehabilitation factors, though convictions involving dishonesty, fraud, or breach of trust heavily weigh against licensure.
- No Prelicensing Education Requirement: Unlike Michigan insurance producer applicants, adjuster candidates are not required to complete a prelicensing classroom or self-study course before sitting for the PSI exam.
- Application & Score Validity: Electronic license applications submitted via the National Insurance Producer Registry (NIPR) remain valid for 6 months (180 days for Adjuster for the Insured applications). A passing PSI exam result remains valid for 12 months.
- 12-Month Exam Waiver (MCL 500.1224(2)): The Director may waive the examination for a person who has been licensed as an adjuster within the preceding 12 months. DIFS applies the same idea to reinstatement: a license inactive for less than 12 months can be reinstated for the same authority without re-examination, while one inactive for more than 12 months requires a new application and examination.
Lines of authority: A Michigan Insurance Adjuster license can carry Fire and Other Hazards, Worker's Compensation, and Crop authority. Series 16-72 tests the content for the workers' compensation line; Series 16-71 omits it.
Statutory Exemptions from Licensing (MCL 500.1222(2))
Michigan law exempts five specific categories of individuals from obtaining an adjuster license under MCL 500.1222(2):
- Attorneys at Law (MCL 500.1222(2)(a)): A person admitted to the practice of law in Michigan. DIFS adds that these attorneys may adjust claims without an adjuster license but cannot represent themselves as an adjuster licensed by the State of Michigan.
- Marine Average Adjusters (MCL 500.1222(2)(b)): An adjuster of marine average (general or particular average) losses.
- Employees of an Authorized Insurer (Staff Adjusters, MCL 500.1222(2)(c)): An employee or manager of an authorized insurer adjusting loss or damage under a policy issued by that insurer. Critical Michigan Exam Trap (DIFS guidance): This staff adjuster exemption applies only to policies issued by the single corporate insurer that directly employs and pays the adjuster's salary. If a staff adjuster adjusts claims for affiliated or subsidiary insurers within the same insurance holding company group, or if the adjuster is employed by a management company or staffing firm and leased to an insurer, the exemption does not apply and the individual must hold an Independent Adjuster license.
- Licensed Insurance Producers with Claim Authority (MCL 500.1222(2)(d)): A licensed insurance producer to whom an insurer has granted claim authority.
- Supervised Data-Entry Personnel (MCL 500.1222(2)(e)): An individual who collects claim information from, or furnishes it to, insureds or claimants and enters data into an automated claims adjudication system—a preprogrammed computer system that collects, calculates, and finally resolves portable consumer electronic insurance claims—while supervised by one or more licensed independent adjusters or exempt insurer employees.
No Catastrophe or Emergency Adjuster Exemption
Unlike states that offer temporary emergency-adjuster registrations after a declared disaster, Michigan has no statutory catastrophe or emergency adjuster exemption. DIFS requires emergency adjusters to be licensed before adjusting claims: each individual files an electronic application through NIPR (a nonresident application for out-of-state adjusters), and DIFS expedites processing after its Insurance Licensing Section validates the emergency.
Fire Repair Contractor Conflict-of-Interest Bar (MCL 500.1224(4))
To prevent self-dealing, inflated repair estimates, and predatory solicitation at fire scenes, MCL 500.1224(4) establishes an absolute statutory conflict bar: the Director of DIFS shall not issue an adjuster license to any person who is employed by, owns stock in, is an officer or director of, or is otherwise connected with a fire repair contractor. An applicant or licensee cannot simultaneously hold an ownership or employment interest in a fire restoration company and hold a Michigan independent or public adjuster license.
Nonresident Licensing & the "Home State" Definition (MCL 500.1224(3), (5)–(6))
A nonresident applies through NIPR. DIFS requires the applicant to hold a license in the state of principal residence or business for every line of authority requested in Michigan (when that state licenses adjusters). If the resident state did not require an examination when it licensed the applicant, the applicant must either pass the Michigan exam or prove completion of an equivalent exam from a state where the applicant is currently licensed.
MCL 500.1224(6) defines an adjuster's home state as either:
- the state of principal residence or business in which the adjuster is licensed as a resident adjuster; or
- if that state does not license adjusters, the state in which the adjuster is licensed and in good standing and that the adjuster designates as the home state.
Under MCL 500.1224(5), a resident of Canada cannot receive a Michigan nonresident license unless the person holds a resident adjuster license from another state or has declared another state as the home state. Under MCL 500.1224(3), DIFS will not issue or continue a license for a person residing in a state that denies a comparable license to Michigan residents solely because of residency.
Adjuster for the Insured (Public Adjuster) Rules (MCL 500.1226–.1228)
Because Adjusters for the Insured contract directly with consumers immediately after traumatic property losses, MCL 500.1226 through 500.1228 impose strict consumer protection rules:
| Statutory Rule | Michigan Requirement (MCL 500.1226–.1228) |
|---|---|
| Permissible Lines | DIFS: an Adjuster for the Insured represents insureds who have suffered losses covered by insurance for fire and other hazards and may not adjust workers' compensation losses |
| Licensed Helpers Only | May not employ or pay anyone to help solicit or adjust a loss unless the adjuster regularly employs that person and the person holds an adjuster license (MCL 500.1226(1)) |
| Identification Duty | May not claim to represent an insurer, to be a fire investigator, or to be connected with a fire department; when soliciting, must orally identify as an adjuster for the insured and leave a business card or other document stating that role and the rates charged (MCL 500.1226(2)) |
| Maximum Fee Cap | May not charge a rate exceeding 10% of the amount paid by the insurer in settlement of the loss (MCL 500.1226(3)) |
| Written Contract | No services until a written contract on a form approved by the Director is signed; the contract is the entire agreement, and the insured receives a copy when it is signed (MCL 500.1226(4)) |
| 48-Hour / 10-Day Voidability | A contract signed within 48 hours after the loss-producing occurrence ends is voidable at the insured's option for 10 days after signing (MCL 500.1226(4)) |
| Solicitation Ban | May not solicit a loss while the loss-producing occurrence is in progress or while the fire department or its representatives are engaged at the damaged premises (MCL 500.1227(1)) |
| Contractor Fees & Advances | May not collect a fee from a repair contractor for obtaining repair work for that contractor, and may not advance money or anything of value to an insured pending adjustment (MCL 500.1227(2)–(3)) |
| Record Retention | Must keep a complete record of each transaction (insured, date/location/amount of loss, the contract, insurer and policy details, recoveries, who solicited the loss and when, and compensation paid) for at least 6 years after the transaction ends, open to DIFS examination (MCL 500.1228) |
License Fees, Annual March 31 Renewal, CE & Address Reporting
Under MCL 500.240, MCL 500.1206(5), and MCL 500.1238(1), maintaining a Michigan adjuster license involves four straightforward administrative rules:
- Statutory Fee Schedule (MCL 500.240): An initial applicant pays the $10 application fee (MCL 500.240(1)(d)) plus the $5 annual adjuster license fee (MCL 500.240(1)(g))—the $15 application/license fee DIFS collects through NIPR, plus NIPR's transaction fee. The $41 exam fee is paid separately to PSI. Annual renewal costs $5 per year.
- Annual Expiration on March 31: Every Michigan adjuster license expires annually on March 31, regardless of the month in which it was initially issued. The renewal window opens on February 1 and closes on March 31 via DIFS Licensing Express Renewal.
- Zero Continuing Education (0 Hours CE): Michigan requires 0 hours of Continuing Education for independent and public adjusters. (Contrast this with Michigan insurance producers, who must complete 24 hours of CE—including 3 hours of ethics—every 2 years.)
- 30-Day Address & Name Change Reporting (MCL 500.1238(1), 500.1206(5)): A licensee must notify the Director of DIFS within 30 days of any change in mailing or email address (MCL 500.1238(1); individuals update addresses through NIPR's Contact Change Request) or legal name (MCL 500.1206(5), which DIFS applies to adjusters). If DIFS initiates a disciplinary action or hearing, sending notice by first-class mail to the mailing address on file with the Director constitutes legally valid service of process, even if the licensee moved without updating their address.
A salaried staff adjuster is employed by Great Lakes Mutual Insurance Company, which is part of a holding company group that also owns three affiliated subsidiary insurers. When does the staff adjuster need to obtain a Michigan Independent Adjuster license under MCL 500.1222(2)?
Whenever the adjuster handles claims under policies issued by any of the three affiliated subsidiary insurers
Only when the adjuster handles commercial property claims exceeding $100,000 in reserve value
Never, because salaried employees of an authorized insurer are exempt across all companies in the same holding group
Only when the adjuster is deployed to a declared catastrophe zone inside Michigan for more than 60 consecutive days
A homeowner's residence is severely damaged by a house fire that the local fire department extinguishes at 6:00 p.m. on Tuesday. At 2:00 p.m. on Wednesday, an Adjuster for the Insured (Public Adjuster) executes a DIFS-approved contract with the homeowner. Under MCL 500.1226, which two protections apply to this contract?
The adjuster's fee is capped at 15% of the settlement, and the contract is voidable by the homeowner for 5 business days
The adjuster's fee is capped at 20% of the settlement, and the executed contract must be filed with DIFS within 3 days
The fee is capped at 10% of the insurer's settlement payment, and the contract is voidable at the insured's option for 10 days
The contract is automatically void because an Adjuster for the Insured cannot solicit a homeowner for 72 hours after a fire
Which combination accurately describes the license maintenance requirements for a Michigan Independent Adjuster?
Expires biennially on the licensee's birth date, carries a $25 fee, requires 24 hours of CE, and requires reporting address changes within 15 days
Expires annually on December 31, carries a $25 renewal fee, requires 12 hours of CE, and requires reporting address changes within 60 days
Expires biennially on March 31, carries a $50 renewal fee, requires 3 hours of ethics CE, and requires reporting name changes in 90 days
Expires annually on March 31, carries a $5 annual renewal fee, requires 0 hours of CE, and requires reporting address changes within 30 days
Sections you finish are checked off in the contents.