North Dakota Code 26.1-26.8-13 – Contract between public adjuster and insured
1. A contract for a public adjuster’s services must be in writing and contain the following terms:
Terms Used In North Dakota Code 26.1-26.8-13
- Contract: A legal written agreement that becomes binding when signed.
- following: when used by way of reference to a chapter or other part of a statute means the next preceding or next following chapter or other part. See North Dakota Code 1-01-49
- Obligation: An order placed, contract awarded, service received, or similar transaction during a given period that will require payments during the same or a future period.
- Person: means an individual, organization, government, political subdivision, or government agency or instrumentality. See North Dakota Code 1-01-49
- Process: means a writ or summons issued in the course of judicial proceedings. See North Dakota Code 1-01-49
- Rescission: The cancellation of budget authority previously provided by Congress. The Impoundment Control Act of 1974 specifies that the President may propose to Congress that funds be rescinded. If both Houses have not approved a rescission proposal (by passing legislation) within 45 days of continuous session, any funds being withheld must be made available for obligation.
- Settlement: Parties to a lawsuit resolve their difference without having a trial. Settlements often involve the payment of compensation by one party in satisfaction of the other party's claims.
- State: when applied to the different parts of the United States, includes the District of Columbia and the territories. See North Dakota Code 1-01-49
- written: include "typewriting" and "typewritten" and "printing" and "printed" except in the case of signatures and when the words are used by way of contrast to typewriting and printing. See North Dakota Code 1-01-37
a. Legible full name of the public adjuster signing the contract, as specified in commissioner records; b. Home state, business address, and telephone number; c. Public adjuster license number; d. Title of “Public Adjuster Contract”; e. Insured’s full name and street address, insurer name, and insurance policy number, if known or upon notification; f. Description of the loss and the location of the loss, if applicable; g. Description of services to be provided to the insured; h. Signatures of the public adjuster and the insured; i. The date the contract was signed by the public adjuster and the date the contract was signed by the insured; j. Attestation language stating the public adjuster is fully bonded pursuant to state law; and
k. The specific amount of compensation, including the full salary, fee, commission, or other consideration the public adjuster is to receive for services.
2. The contract may specify the public adjuster must be named as a copayee on an insurer’s payment of a claim.
3. If the compensation is based on a share of the insurance settlement, the exact percentage must be specified in the contract.
4. Initial expenses to be reimbursed to the public adjuster from the proceeds of the claim payment must be specified by type and the dollar estimates must be set forth in the contract. Additional expenses must be approved in writing by the insured.
5. Compensation provisions in a public adjuster contract may not be redacted in a copy of the contract provided to the commissioner.
6. If the insurer, not later than three days after the date on which the loss is reported to the insurer, either pays or commits in writing to pay to the insured the policy limit of the insurance policy, the public adjuster:
a. May not receive a commission consisting of a percentage of the total amount paid by an insurer to resolve a claim; b. Shall inform the insured the loss recovery amount might not be increased by the insurer; and
c. Is entitled only to reasonable compensation from the insured for services provided by the public adjuster on behalf of the insured, based on the time spent on a claim and expenses incurred by the public adjuster, until the claim is paid or the insured receives a written commitment to pay from the insurer.
7. A public adjuster contract may not contain a contract term that:
a. Allows for balance billing of the insured; b. Allows a percentage fee to be collected by the public adjuster if money is due from an insurer, but not paid, or allows a public adjuster to collect the entire fee from the first check issued by an insurer, rather than a percentage of each check issued by an insurer; c. Requires the insured to authorize an insurer to issue a check only in the name of the public adjuster; d. Imposes collection costs or late fees; or
e. Precludes a public adjuster from pursuing civil remedies.
8. Before the signing of the contract the public adjuster shall provide the insured with a separate disclosure document regarding the claim process which states:
a. Property insurance policies obligate the insured to present a claim to the insurer for consideration.
b. The following three types of adjusters could be involved in the claim process:
(1) “Company adjuster” means an insurance adjuster who is an employee of an insurer. A company adjuster represents the interest of the insurer, is paid by the insurer, and will not charge the insured a fee.
(2) “Independent adjuster” means an insurance adjuster who is hired on a contract basis by an insurer to represent the interest of the insurer in the settlement of the claim. An independent adjuster is paid by the insurer and will not charge the insured a fee.
(3) “Public adjuster” means an insurance adjuster who does not work for an insurer. A public adjuster works for the insured to assist in the preparation, presentation, and settlement of the claim. The insured hires a public adjuster by signing a contract agreeing to pay a fee or commission based on a percentage of the settlement or other method of compensation.
c. The insured is not required to hire a public adjuster to help the insured meet the insured’s obligations under the policy, but has the right to do so.
d. The insured has the right to initiate direct communications with the insured’s attorney, the insurer, the company adjuster, and the insurer’s attorney, or any person regarding the settlement of the insured’s claim.
e. The public adjuster is not a representative or employee of the insurer.
f. The salary, fee, commission, or other consideration to be paid to a public adjuster is the obligation of the insured, not the insurer.
9. The contract must be executed in duplicate to provide an original contract to the public adjuster and to the insured. The original contract retained by the public adjuster must be available at all times for inspection without notice by the department.
10. The public adjuster shall provide the insurer a notification letter signed by the insured, authorizing the public adjuster to represent the insured’s interest. The notification letter must include a copy of the signed contract.
11. The public adjuster shall give the insured written notice of the insured’s rights as provided in this section.
12. Within three days after the claim is submitted to the insurer, the insured has the right to rescind the contract. The rescission must be in writing and mailed or delivered to the public adjuster at the address in the contract within the three business-day period.
13. If the insured exercises the right to rescind the contract, anything of value given by the insured under the contract must be returned to the insured within fifteen days following the receipt by the public adjuster of the rescission notice.
14. The commissioner may require a public adjuster to file a contract with the department in a manner prescribed by the commissioner.