The Office of General Counsel issued the following informal opinion on March 8, 2001, representing the position of the New York State Insurance Department.
RE: Independent Adjuster, Casualty
May an independent adjuster represent an insured on a property or liability insurance claim originating from a motor vehicle accident?
No. An independent adjuster means a person, firm or corporation who, for money or any other thing of value, acts in this state on behalf of an insurer in the work of investigation and adjusting claims arising under insurance contracts issued by such insurer.
An inquirer questions whether a public adjuster can represent a policyholder on first party property damage claims. The inquirer then asks the above question which indicates some confusion between the terms "independent adjuster" and "public adjuster".
The N.Y. Ins. Law § 2101(g)(1&2) (McKinney 2000) provides in pertinent part:
In this article "adjuster" means any "independent adjuster" or "public adjuster" as defined below:
The term "independent adjuster" means any person, firm, association or corporation who, or which, for money, commission or any other thing of value, acts in this state on behalf of an insurer in the work of investigation and adjusting claims arising under insurance contracts issued by such insurer .
"Public Adjuster" means any person, firm, association or corporation who, or which, for money, commission or any other thing of value acts or aids in any manner on behalf of an insured in negotiating for, or effecting, the settlement of a claim or claims for loss or damage to property of the insured in this state caused by, or resulting form, any of the risks enumerated (emphasis added)
Thus, "Independent Adjusters" act on behalf of insurers and "Public Adjusters" act on behalf of insureds.
"Independent Adjuster" licenses come in many different types or specialties. For example, N.Y. Insurance Department Regulation 25, N.Y. Comp. R. & Regs. , tit 11
§ 26.3(g) defines independent adjuster, casualty as:
(g) Independent adjuster, casualty: The independent adjuster, casualty, shall have authority to investigate and adjust all claims arising under policies of personal injury and property damage liability insurance, burglary and theft insurance, glass insurance, workers compensation and employers liability insurance, boiler and machinery insurance, elevator insurance, credit insurance, animal insurance, collision insurance, legal service insurance, and water damage insurance, but shall not include the investigation and adjustment of losses of motor vehicle and aircraft insurance as specified under subdivisions (c) and (d) of this section. (emphasis added)
N.Y. Insurance Department Regulation 25, N.Y. Comp. R. & Regs., tit 11 § 26.3 (c) & (d) defines independent adjuster, aviation and automobile:
(c) Independent adjuster, aviation. The independent adjuster, aviation, shall have authority to investigate and adjust all claims arising under policies of aviation insurance.
(d) Independent adjuster, automobile. The independent adjuster, automobile, shall have authority to investigate and adjust all claims arising under policies of motor vehicle insurance including automobile personal injury liability insurance and property damage liability insurance. (emphasis added)
Further, the inquirer states that a "New York Public Adjuster is able to represent the policyholder on first party property damage claims". Section 2101 delineates the kinds of insurance that a public adjuster can adjust on behalf of insureds. Motor vehicle claims are not included in the kinds of insurance enumerated by this section. In regard to those kinds of insurance not enumerated, no license is required under the Insurance Law. However, such person may be engaging in the practice of law or as a private investigator, for which licensing is required. We offer no opinion as to whether such licensing is required.
N.Y. Ins. Dept. Regulation 64 (N.Y. Comp. R. & Regs. tit 11 § 216.7(b)(3)) also allows an insured to designate a representative, such as a repair shop, to negotiate the cost of the repair of the motor vehicle. Where the repair shop is located in New York, it must be registered pursuant to the provisions of the Motor Vehicle Repair Shop Registration Act (N.Y. Vehicle & Traffic Law, Art. 12-A (McKinney 1996 & Supp. 2001). The insureds broker of record may also be a designated representative. See N.Y. Comp. R. & Regs. tit. 11 §216.7(a)(2).
For further information you may contact Associate Counsel Sidney B. Glaser at the New York City Office.