Starting an insurance adjuster business requires getting not only an insurance adjuster license but also a license for your business entity.
Businesses involved in the insurance industry must be licensed to provide the services they offer. Getting an adjuster business license may vary by state and type of insurance service you plan to offer.
This guide presents an overview of the adjuster business entity license requirements and everything you need to know about how to get an adjuster insurance license for a business.
Recommended: For insurance adjuster pre-license education courses and exam prep, StateRequirement recommends:
AdjusterPro
If you’re a business looking to provide insurance adjuster services, you are required to obtain licensing in all states, although the requirements vary from state to state. Note that this “business license” is entirely different from your individual insurance adjuster license.
Whether a business or an individual, the licensed adjuster investigates claims to calculate if or how much an insurance company needs to pay a policyholder for damages and losses.
You will also help clients file claims by collecting photographs and statements from involved parties, along with relevant expert and witness testimonies. Once the necessary documents have been collected, your business attaches a recommendation on how much the insurer should pay.
Note that the more licenses your insurance adjuster business has, the more clients your business can represent, thus contributing to increased revenue.
An insurance adjuster business can have different types of adjusters, each with a specific role in the claims process. Typically, businesses hire licensed adjusters that work for or with insurance companies. Below are the most common types of insurance adjusters:
State licensing requirements may vary for each type of adjuster. While some states require different licenses for each type, some states don’t have licensing requirements.
You will possibly need to appoint a registered agent to receive official notices and legal correspondence for your adjuster business. To operate an insurance adjuster business, you must understand your state-required obligations by going through the necessary licensing process.
Becoming a licensed insurance adjuster business requires meeting specific state-level requirements. If you’re located in a state where there are licensing requirements, the process could start by meeting eligibility requirements and completing the necessary pre-licensing education course and training.
Before applying for an adjuster business license, you must ensure that the licensed individual in charge (owner, partner, or an employed manager) has the necessary credentials. Listed below are the qualifications for the adjuster business license.
If you’re looking to form an LLC for your insurance company, check out our insurance licensing for an LLC guide.
Getting a Designated Home State (DHS) insurance adjuster license allows an adjuster to work in multiple states. The DHS license is issued by the home state of the adjuster and is recognized by other states that have entered into reciprocal agreements with the adjuster’s home state. These agreements allow an adjuster with a DHS license to handle claims in the reciprocal states without having to obtain a separate license in each state.
The requirements for obtaining a DHS license vary by state; typically, an adjuster must meet the same requirements as those for a regular adjuster’s license in their home state. This may include completing pre-licensing education, passing a licensing exam, and maintaining CE requirements.
If you’re an adjuster business with a DHS license, you may be able to handle claims in other states. There are specific restrictions on the types of claims you can adjust or the number of days you can work in a reciprocal state without obtaining a separate business license.
States that offer DHS licenses include Florida, Indiana, and Texas.
The steps to obtain a business license as an adjuster can vary depending on the state or county where you plan to conduct your business.
Below, you’ll find the common steps on how to get an adjuster license for your business.
Once you’re ready to start an insurance company, you must determine who will be your designated responsible person.
A Designated Responsible Licensed Producer (DRLP) is specific to the insurance industry and oversees the activities of licensed insurance agents. In adjusting, there may be a similar role called a Designated Responsible Licensed Public Adjuster (DRLPA), which oversees the activities of adjusters within an adjusting firm or company.
The DRLPA is responsible for the business entity’s compliance with the insurance laws, rules and regulations of the state you’re doing business in. The DRLPA requirements may vary by state, but usually involve having a certain amount of experience as an adjuster and completing additional training or coursework.
Once licensed, the DRLPA is responsible for maintaining their license and staying up to date with any changes to regulations or guidelines that may affect the adjusting firm’s operations.
The person in charge of the business or the applicant for licensure will need to complete pre-exam education requirements. The specific requirements can vary by state. You will need to complete a certain number of hours of pre-licensing education before you can take the adjuster licensing exam.
The number of pre-licensing education hours required vary by state, ranging from 20 to 40 hours or more. The education can be completed through classroom instruction, online courses, or a combination of both.
Once you’ve completed the required pre-exam education, you can then apply to take the licensing exam.
Recommended Insurance Adjuster Course
For insurance adjuster pre-license education courses and exam prep, StateRequirement recommends:
AdjusterPro
The person in charge of the business or the applicant for licensure must also pass a qualifying license examination administered by your state’s Insurance Department or similar authority.
Most adjuster licensing states require you to pass an exam to become licensed as an adjuster. The exam may cover topics such as insurance laws, regulations, and ethics. Study materials and exam schedules are often available through the licensing department or agency.
For tips on how to study and pass your insurance licensing exams, visit our How to Pass the Insurance Exam page.
Once you have met all of the requirements, you can submit an application to Sircon, National Insurance Producer Registry (NIPR) or state licensing department’s online service portals to apply for a business entity license.
The application will typically require you to provide personal information, education and experience details, proof of passing the licensing exam, and background check.
There is usually a fee associated with obtaining a business license as an adjuster. Make sure to include the appropriate fee with your application. Fees vary by state.
Insurance adjuster businesses may be required to submit types of insurance coverage, such as an Errors and Omissions (E&O) policy or a surety bond, as part of the licensing process.
Both surety bonds and E&O policies can provide important financial protection for adjusting businesses.
An E&O policy is designed to protect adjusting businesses against claims that they have made errors or omissions in their professional services. A surety bond is a three-person (principal, obligee, and surety company) type of contract that provides financial protection to clients of the adjusting business in the event that the business fails to fulfill its contractual obligations.
Typically, an E&O policy is more commonly required for an adjusting business than a surety bond, as the risks of professional liability claims are higher in this industry. Depending on the specific contractual obligations and risks of the adjusting business, a surety bond may also be required. It is important as an adjusting business to know your risks and legal requirements to determine which type of insurance product is most appropriate for your needs.
Insurance adjuster business licensees are required to undergo a fingerprint and background check as part of the licensing process. The purpose of the background check is to ensure that the business applicant does not have a criminal record or history of unethical behavior that could put clients at risk.
The exact process for the fingerprint and background check can vary by state, but will involve submitting fingerprints to a state or federal agency, such as the FBI.
In addition to the fingerprint and background check, some states may also require business entity licensees to disclose any past criminal convictions or disciplinary actions, as well as provide references or proof of insurance coverage.
If you have specific questions regarding things that may come up on your background check you may call your state’s Insurance Department or similar authority.
Once you have met all of the requirements, you can submit an application to Sircon, NIPR or access your state licensing department’s online service portals to apply for a business entity license.
The application will typically require you to provide personal information, education and experience details, proof of passing the licensing exam, and background check.
There is usually a fee associated with obtaining a business license as an adjuster. Make sure to include the appropriate fee with your application. Fees vary by state.
The application review process varies by state, but it will usually involve submitting the application, along with any required supporting documents, to the state Insurance Department or other regulatory agency responsible for overseeing adjuster licensing.
The regulatory agency will review your application and supporting documents to ensure that you meet all licensing requirements, such as education, experience, and background checks. They may also conduct a site visit to your business location to ensure that it complies with state regulations and is properly equipped to handle insurance claims.
Once your application has been reviewed and approved, you will be issued a license to operate your adjuster business in the state. It’s important to keep your license current and renew it as required by the state to ensure that you can continue to legally operate your business and provide services to clients.
To renew an adjuster business license, you will need to follow specific guidelines and requirements by your state’s Insurance Department or similar licensing authority. The renewal process involves submitting an application, paying a renewal fee, and meeting any CE requirements.
Always keep your adjuster business license up-to-date to ensure that you are legally able to perform your job duties. By following the renewal process carefully and submitting all required CE credits, fees, and other documentation, you can maintain your license and continue to work as an adjuster.
Yes. Licensing requirements in adjuster licensing states may vary. It is important for insurance businesses to ensure that they are in compliance with all applicable laws and regulations related to property claims handling. This may include obtaining any necessary licenses or certifications, following proper procedures and guidelines for claims handling, and maintaining their license. If you’re forming an insurance agency and choosing an LLC as your business entity, visit our How to Get an Insurance License for an LLC article for more information.
Yes. An insurance adjuster business can have one or more adjuster licenses. Each state has its own requirements on licensing for insurance adjusters, and some states require separate licenses for different types of insurance claims or adjusting activities. An insurance adjuster business can obtain licenses for multiple states or types of claims, as long as it meets the regulatory requirements for each license. In some cases, this may involve passing state exams, meeting education and experience requirements, and completing CE requirements. Insurance adjuster businesses may also need to obtain additional licenses or approvals for certain types of claims or adjusting activities, depending on the regulatory requirements in each state.
An insurance adjuster business license is necessary because it allows the business to legally operate as an insurance adjuster in a particular state. The license is issued by your state’s Department of Insurance or similar regulatory authority. By requiring an insurance adjuster business entity license, states can help ensure that insurance claims are handled in a professional and ethical manner. The licensing process helps to ensure that insurance adjusters have the knowledge, skills, and experience needed to properly investigate claims, negotiate settlements, and comply with applicable business laws and regulations.
Information on this page was researched and gathered from a multitude of sources and was most recently updated on July 25, 2024
Any Information on this site is not guaranteed or warranted to be correct, accurate, or up to date. StateRequirement and its members and affiliates are not responsible for any losses, monetary or otherwise. StateRequirement is not affiliated with any state, government, or licensing body. For more information, please contact your state's authority on insurance.
When readers purchase services discussed on our site, we often earn affiliate commissions that support our work. Learn More
Our goal at StateRequirement is to be the #1 professional licensing resource in the world. All of our information is gathered from deep research of trusted governmental, educational sources, and first-hand experience. Thank you for your support.
Stay Connected:
