11.2 Public Adjuster Definition, Exemptions, Applications & Bond

Who Must Be Licensed

Texas Insurance Code §4102.001 defines a public insurance adjuster broadly. For compensation, the person acts for an insured in negotiating or effecting settlement of a real- or personal-property claim; acts for another public adjuster by investigating, settling, adjusting, advising, or assisting; or advertises, solicits, or holds out as an adjuster of those claims.

The definition prevents an unlicensed marketer from claiming “I only find customers” when the person solicits public-adjuster business.

General authority

A Chapter 4102 license authorizes adjusting for insureds on fire and allied, burglary, flood, and other real- and personal-property claims, including loss of income. The client must be an insured under the policy. It is not authority to practice law or represent third-party bodily-injury claimants.

Exemptions

Section 4102.002 excludes specified persons acting within their proper roles, including government officers or employees on official duty, attorneys performing professional duties, admitted insurers and licensed agents performing their duties, certain secured property owners or mortgagees, exclusively clerical salaried employees, technical assistants employed by a public adjuster, licensed private investigators within their scope, and qualifying full-time salaried employees of property owners or management companies.

Section 4102.051 also addresses narrow license exceptions for a Texas attorney meeting the statutory condition and a licensed property-casualty or personal-lines agent acting for an insured concerning a loss under a policy issued by that agent.

An exemption does not allow a clerical employee to negotiate claims in the employee’s own name. Technical experts furnish assistance to the licensed adjuster; they do not hold themselves out as the public adjuster.

Resident individual qualifications

Chapter 4102 requires, among other things:

• age 18 or older;
• U.S. citizenship or federal compliance for employment or business;
• Texas residence for a resident license;
• trustworthiness and moral character supporting fair, good-faith practice;
• no felony in the preceding 10 years unless fully pardoned and relieved of disabilities;
• sufficient property-valuation and physical-damage experience or training;
• sufficient knowledge of property insurance contracts;
• passing the prescribed exam or qualifying for a statutory exemption;
• financial responsibility;
• fingerprints on request and other applicable requirements.

An older felony does not guarantee issuance; the commissioner evaluates statutory qualifications.

Current application steps

TDI’s current page directs a resident individual to:

1. pass the state exam;
2. begin TDI’s fingerprint process and obtain the required receipt unless exempt;
3. apply online through Sircon within one year;
4. pay the $50 application fee;
5. identify the approved client contract to be used, including FIN535 as an option;
6. upload proof of the bond.

TDI does not offer a temporary, 90-day emergency, or provisional public-adjuster license.

Financial responsibility and FIN509

The current TDI bond form is FIN509, not FIN531. The applicant must be the sole principal. The bond is payable to TDI for customers’ use and benefit and has a penal sum of $10,000. The surety can terminate it with 30 days’ written notice to TDI, remaining liable for covered defaults before termination.

The bond is not a savings account or E&O policy. If the surety pays a valid claim, it can seek reimbursement from the bonded principal. The $10,000 penal sum caps the surety’s aggregate bond liability, not necessarily the adjuster’s personal liability.

Business entities and nonresidents

A Texas public-adjusting agency needs its own license, a Texas designated responsible licensed producer who is an officer or active partner, individually licensed persons performing public-adjuster acts, registration information, an approved contract, and its own bond in the agency’s exact legal name. TDI does not accept a DBA for a public-adjusting firm.

Nonresidents follow reciprocity and home-state rules, provide an agent for service of process, and comply with Texas conduct requirements when working here.

Exam scenario

A roofing estimator offers to negotiate a homeowner’s claim for 8 percent and says a licensed adjuster will sign later. The estimator is soliciting and offering compensated claim adjustment; later signature does not cure unlicensed activity. If the estimator only measures damage for a licensed public adjuster and never solicits or advises the insured, the technical-assistant exemption may apply.

Apply the licensing definition to conduct

Do not decide licensure from a job title. Ask whether the person, for compensation, negotiates or effects settlement of an insured’s real- or personal-property claim, assists another public adjuster with covered adjusting activity, or advertises and solicits that service. An unlicensed estimator cannot evade the statute by saying a license holder will later sign the work. Conversely, a technical assistant who only measures damage under a licensed adjuster’s direction may fit a statutory role if the person does not solicit, advise, or negotiate.

Test exemptions narrowly. Attorneys, insurer personnel, agents, clerical employees, private investigators, property-owner employees, and others are exempt only within the conditions of the cited provision and their proper professional function. An exemption is not a general public-adjuster license.

For an individual application, use the current TDI sequence and forms. The bond must identify the applicant as sole principal, meet the required amount, and remain effective. An agency’s license and bond do not substitute for individual licensure of people performing regulated acts. Check exact legal names, designated responsible license holder, contract choice, fingerprints when required, and timing from the passed examination.