The Guide for Adjusting Property Claims in California After a Disaster—2025

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Guide for Adjusting Property Claims in

California After a Major Disaster

Wildfires

Earthquakes

Floods

California Department of Insurance

January 9, 2025

Guide for Adjusting Property Claims

in California After a Major Disaster – January 9, 2025

Page 2

Guide for Adjusting Property Claims in

California After a Major Disaster

Table of Contents

Introduction

What is an Independent Insurance Adjuster; Who is Required to Hold

this License; and Who Needs to be Registered?

Independent Insurance Adjuster Licensing Requirements

Registration of Independent Insurance Adjuster Employees

In the Event of an Emergency Situation Declared by the

Insurance Commissioner

Registration

Important Note

Required Certification

Required Independent Insurance Adjuster Training

Continuing Education Requirements

The Department’s Annual Notice and Guide for Adjusting Property

Claims in California After a Major Disaster

Important Note

Information Relevant to Evaluating Damage Caused by an Emergency,

Catastrophe, Disaster, or Other Similar Occurrence

Provide Claimant Copy of the Department’s Notice

Copy of Complete Policy After Loss

Additional Living Expenses

List of Items Covered

Time Limit to Collect Additional Living Expenses

Uninhabitable/Reasonable Habitation

Restricted Access by Civil Authority

Advance Payment

Itemization of Contents

Grace Period

Policy Coverage – Peril of Fire

Policy Provisions and Benefits

Duties Upon Receipt of Communications Initial Contact

Response to Claimant Communications

Response Timelines and Written Communication

Acceptance or Denial of Claim

Actual Cash Value Calculation

Replacement Cash Value Calculation

dvance Payment

Itemization of Contents

Grace Period

Policy Coverage – Peril of Fire

Policy Provisions and Benefits

Duties Upon Receipt of Communications Initial Contact

Response to Claimant Communications

Response Timelines and Written Communication

Acceptance or Denial of Claim

Actual Cash Value Calculation

Replacement Cash Value Calculation

Guide for Adjusting Property Claims

in California After a Major Disaster – January 9, 2025

Page 3

Rebuilding in Current Location or Rebuilding or

Replacing in a New Location

Land Value Deduction

Replacement Cost

Building Code Upgrade Coverage

Ability to Combine Coverages

Payment of Contents Without Inventory

Estimate Reconciliation

Time Limit to Collect Full Replacement Costs

Investigation

Changing Claims Adjusters – Primary Point of Contact

Appraisal

Suits

Betterment, Depreciation, Salvage

Prohibited Conduct

No Attempts to Settle Unreasonably Low

Claims Settlement Practices

Referrals

Settlements

Claimant’s Rights

Polygraph Examination

Documented Telephone Conversations

Complaints

Statute of Limitation

Prompt Payment

California Department of Insurance Enforcement

Additional Adjuster Training (Pending NFIP’s Review)

Training for Evaluating Earthquake Damage

Flood Training, National Flood Insurance Program

Disclaimer:

This Guide is for informational purposes only. The actual terms and methods of evaluating

damage caused by an emergency, catastrophe, disaster, or other similar occurrence and related

laws prevail over the information provided in this Guide. The information contained in this Guide

does not create rights or obligations on the part of the insured, the insurer, the agent, the broker,

the licensed adjuster, the employee and the adjuster not licensed in California, or the California

Department of Insurance

emergency, catastrophe, disaster, or other similar occurrence and related

laws prevail over the information provided in this Guide. The information contained in this Guide

does not create rights or obligations on the part of the insured, the insurer, the agent, the broker,

the licensed adjuster, the employee and the adjuster not licensed in California, or the California

Department of Insurance. This Guide is not intended to be a substitute for the actual training of

the insurance adjuster, employee, or adjuster not licensed in California (California Insurance Code

[Cal. Ins. Code] sections 14022[a][2], 14022.5[a][3], 14046[a]2], and 14046[c]).

Guide for Adjusting Property Claims

in California After a Major Disaster – January 9, 2025

Page 4

Introduction

Since at least 2007, the California Department of Insurance (Department) has distributed

notices to insurers, agents/brokers, and adjusters regarding the significant California laws

that pertain to residential property insurance policies. These notices can be found on the

Department’s Wildfire Resources web page.

On October 3, 2019, Governor Gavin Newsom signed Senate Bill (SB) 240, authored by

Senator Bill Dodd (Chapter 502, Statutes of 2019), the Insurance Adjuster Act. This bill

took effect immediately and added Section14046 to the California Insurance Code, which

requires the Department to annually prepare a Notice that describes the most significant

California laws pertaining to property insurance policies, including those related to a

declared state of emergency.

In addition, California Insurance Code section 14046(a)(2) requires the Department to

prepare and deliver to all licensed insurance adjusters a guide that includes information

relevant to evaluating damage caused by an emergency, catastrophe, disaster, or other

similar occurrence, including wildfires. To meet this requirement, the Department

developed this Guide for Adjusting Property Claims in California After a Major Disaster

(Guide).

14046(a)(2) requires the Department to

prepare and deliver to all licensed insurance adjusters a guide that includes information

relevant to evaluating damage caused by an emergency, catastrophe, disaster, or other

similar occurrence, including wildfires. To meet this requirement, the Department

developed this Guide for Adjusting Property Claims in California After a Major Disaster

(Guide).

Guide for Adjusting Property Claims

in California After a Major Disaster – January 9, 2025

Page 5

What is an Independent Insurance Adjuster?

Who is Required to Hold this License, and Who Needs to be Registered?

An independent insurance adjuster is a person other than a private investigator who, for

any consideration whatsoever, engages in the business of making an investigation for the

purpose of obtaining information in the course of adjusting or participating in the disposal

of any claim in connection with a policy of insurance or engages in soliciting insurance

adjustment business (Cal. Ins. Code section 14021).

Independent Insurance Adjuster Licensing Requirements–A person adjusting or

settling property and casualty claims who is:

• not employed exclusively and regularly by one employer in connection with the affairs

of the employer only, and

• not in an employee-employer relationship with an insurance company, but works on

behalf of an insurance company is performing the duties of an insurance adjuster.

This person is required to be individually licensed as an insurance adjuster (Cal. Ins. Code

section 14022[a][1]).

Unless meeting the definition of a person exempted from the licensing requirements as

stated in California Insurance Code section 14022, all persons must obtain an

independent insurance adjuster license prior to adjusting or participating in the disposal

of any claim in connection with a policy of insurance or engaging in soliciting insurance

adjustment business. To become a licensed adjuster, review the Department’s Adjuster

Licensing Requirements webpage

sing requirements as

stated in California Insurance Code section 14022, all persons must obtain an

independent insurance adjuster license prior to adjusting or participating in the disposal

of any claim in connection with a policy of insurance or engaging in soliciting insurance

adjustment business. To become a licensed adjuster, review the Department’s Adjuster

Licensing Requirements webpage.

Registration of Independent Insurance Adjuster Employees –

The most common exemption to the individual independent insurance adjuster licensing

requirements are those individuals who are employed by a qualified licensed insurance

adjuster or qualified manager (Cal. Ins. Code sections 14037 and 14041). The qualified

licensed independent insurance adjusters and qualified managers are required to report

all employees who are authorized to negotiate claims settlements under the independent

insurance adjuster license to the Department when applying for an adjuster license and

when the license is renewed using one of the following registration services:

• the Department’s Independent Insurance Adjuster Registration and Certification

Online Services (Adjuster Online Services);

• Independent Insurance Adjuster List of Employees and Adjusters Not Licensed in

California, CDI-183; or,

• Written letter delivered to the California Department of Insurance, Attention Adjuster

Unit, 300 Capitol Mall, Room 16090, Sacramento, CA 95814

The Department is to be informed within 30 days of any employee hired or terminated

subsequent to the filing of the initial employee list – this is an on-going process (California

Code of Regulations, Title 10, [Cal. Code of Regs., Title 10] section 2691.12).

letter delivered to the California Department of Insurance, Attention Adjuster

Unit, 300 Capitol Mall, Room 16090, Sacramento, CA 95814

The Department is to be informed within 30 days of any employee hired or terminated

subsequent to the filing of the initial employee list – this is an on-going process (California

Code of Regulations, Title 10, [Cal. Code of Regs., Title 10] section 2691.12).

Guide for Adjusting Property Claims

in California After a Major Disaster – January 9, 2025

Page 6

In the Event of an Emergency Situation Declared by the Insurance Commissioner

– Registration – When the Commissioner declares an emergency situation, insurers,

qualified licensed adjusters, and qualified managers must register with the Department

all insurance adjuster employees and adjusters not licensed in California who are

authorized to negotiate claims settlements on their behalf during the declared emergency

(Cal. Ins. Code section 14022.5).

“Registration” or “registered” means

submitting the names of insurance adjuster

employees and adjusters not licensed in

California to the Commissioner using one

of the registration services listed below no

later than 15 calendar days from the date

they began claims adjusting activity in

California

(Cal.

Ins.

Code,

section

14022.5[a][2]):

• The

Department’s

Independent

Insurance Adjuster Registration and Certification Online Services (Adjuster Online

Services);

Note: The Adjuster Online Service “Emergency Declaration” link will be available

at the time the Insurance Commissioner declares an emergency situation in

California

they began claims adjusting activity in

California

(Cal.

Ins.

Code,

section

14022.5[a][2]):

• The

Department’s

Independent

Insurance Adjuster Registration and Certification Online Services (Adjuster Online

Services);

Note: The Adjuster Online Service “Emergency Declaration” link will be available

at the time the Insurance Commissioner declares an emergency situation in

California.

• Independent Insurance Adjuster List of Employees and Adjusters Not Licensed in

California, CDI-183; or,

• Written letter delivered to the California Department of Insurance, Attention

Adjuster Unit, 300 Capitol Mall, Room 16090, Sacramento, CA 95814

Registration for claims adjusting activities arising out of an emergency is valid for a

period of 180 days from the date of the registration of the employee or adjuster not

licensed in California. Before the lapse of that period, the Department may deem a

180-day extension is appropriate if a request by a supervising licensed adjuster or

admitted insurer is received (Cal. Ins. Code section 14022.5[c]).

Important Note: For the registration to be valid for insurance adjuster employees and

adjusters not licensed in California who are authorized to negotiate claims settlements

when the Commissioner declares an emergency situation, the adjuster employee and

adjuster not licensed in California must complete the required certification as stated

below (Cal. Ins. Code section 14022.5[d]).

Required Certification – Independent insurance adjuster employees and adjusters

not licensed in California must submit to the Department a certification, under penalty

of perjury, that they have read and understand the Department’s most recent Notice

and this Guide for adjusting property claims in California or their registrations are

invalid. The following are two methods for employees and adjusters not licensed in

California to submit their completed certifications:

ot licensed in California must submit to the Department a certification, under penalty

of perjury, that they have read and understand the Department’s most recent Notice

and this Guide for adjusting property claims in California or their registrations are

invalid. The following are two methods for employees and adjusters not licensed in

California to submit their completed certifications:

Guide for Adjusting Property Claims

in California After a Major Disaster – January 9, 2025

Page 7

• Adjuster Online Services – Using the “Emergency Declaration” link, at the time the

names of the insurance adjuster employees and adjusters not licensed in California

are submitted to CDI, the Adjuster Online Services will create an email providing

instructions on how the employee or adjuster not licensed in California can

electronically certify, under penalty of perjury, that they have read and understand

CDI’s Notice and this Guide. The insurer, qualified licensed adjuster, or qualified

manager will need to insert the employee’s or adjuster not licensed in California’s

email address to send the instructions.

Note: This Adjuster Online Service “Emergency Declaration” link will be available

at the time the Insurance Commissioner declares an emergency situation in

California.

Situation by the Commissioner, CDI-184 –

• Certification – Adjusters Not Licensed in California, Declared Emergency

Qualified insurance adjusters, qualified

managers, and insurers who submit a completed Independent Insurance Adjuster List

of Employees and Adjusters Not Licensed in California, CDI-183, or submit a written

letter, are required to provide their employees and adjusters not licensed in California

with copies or links to the Department’s Notice, this Guide, and a copy of the

Certification – Adjusters Not Licensed in California, Declared Emergency Situation by

the Commissioner, CDI-184. CDI-184 can be submitted to the Department by email,

fax, or U.S. mail using the delivery information provided on the form (Cal. Ins

red to provide their employees and adjusters not licensed in California

with copies or links to the Department’s Notice, this Guide, and a copy of the

Certification – Adjusters Not Licensed in California, Declared Emergency Situation by

the Commissioner, CDI-184. CDI-184 can be submitted to the Department by email,

fax, or U.S. mail using the delivery information provided on the form (Cal. Ins. Code,

section 14022.5[a][3]).

Note: The Certification – Adjusters Not Licensed in California, Declared

Emergency Situation by the Commissioner, CDI-184, form will be available at the

time the Insurance Commissioner declares an emergency situation in California.

The work performed by insurance adjuster employees and adjusters not licensed in

California must be under the active direction, control, charge, or management of a

licensed adjuster, qualified manager, or insurer authorized to conduct business in

California (Cal. Code of Regs., Title 10, section 14022.5[a][1] and 14029[a]).

Guide for Adjusting Property Claims

in California After a Major Disaster – January 9, 2025

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Required Independent Insurance Adjuster Training

Continuing Education Requirements – Licensed insurance adjusters are required to

complete a minimum of 24 hours of continuing education every two-year license term, of

which three hours are to be in ethics and the California Insurance Code. The continuing

education courses include topics such as homeowners, dwelling, commercial insurance

coverages, the Adjuster Act, adjusting losses, Fair Claims Settlement Practices, and the

duties and responsibilities of an insurance adjuster licensee. Licensed insurance

adjusters can use the Department’s Education Provider and Course Search to locate the

required courses to complete their continuing education requirements (Cal. Ins. Code

section 14090.1)

ners, dwelling, commercial insurance

coverages, the Adjuster Act, adjusting losses, Fair Claims Settlement Practices, and the

duties and responsibilities of an insurance adjuster licensee. Licensed insurance

adjusters can use the Department’s Education Provider and Course Search to locate the

required courses to complete their continuing education requirements (Cal. Ins. Code

section 14090.1).

The Department’s Annual Notice and Guide for Adjusting Property Claims in

California After a Major Disaster – In January each year, the Department’s Notice and

this Guide will be distributed to licensed insurance adjusters, qualified managers, and

insurers admitted in the state of California. This is in addition to the required California

Insurance Code sections 790 through 790.15, Fair Claims Settlement Practices

Regulations, and California Code Regulations, Title 10, sections 2695.1 through 2696.14

training for all claims adjusters. The training and certification are to be completed by all

claims adjusters on or before September 1 of each calendar year (Cal. Code of Regs.,

Title 10, section 2695.6).

Important Note: After a public official declares a state of emergency, as defined in

California Government Code section 8558, licensed adjusters and qualified managers are

to require the employees and non-licensed adjusters under their supervision to read and

understand the Department’s most recent Notice and this Guide no later than 15 calendar

days from the date on which the employee began claims adjusting activity in California

(Cal. Ins. Code section 14022[a][2]).

California Government Code section 8558, licensed adjusters and qualified managers are

to require the employees and non-licensed adjusters under their supervision to read and

understand the Department’s most recent Notice and this Guide no later than 15 calendar

days from the date on which the employee began claims adjusting activity in California

(Cal. Ins. Code section 14022[a][2]).

Guide for Adjusting Property Claims

in California After a Major Disaster – January 9, 2025

Page 9

Information Relevant to Evaluating Damage

Caused by an Emergency,

Catastrophe, Disaster, or Other Similar Occurrence

The Department’s Notice emphasizes that all claims adjusters, whether licensed in

California or not, who are assigned to adjust claims in California must be properly trained

on all laws relating to property and casualty insurance claims handling and the California

Unfair Practices Act, Fair Claims Settlement Practices Regulations. Some insurance laws

are specifically triggered by a declared disaster and impact how claims are paid and the

various timeframes for payment of claims that supersede policy provisions to the contrary.

The following are California Insurance Code Sections and Fair Claims Settlement

Practices Regulations pertaining to property and casualty insurance claims handling:

Provide Claimant a Copy of the Department’s Notice: For a claim under a policy of

residential property insurance arising as a result of a declared state of emergency, as

defined in Government Code section 8558, or other emergency declared by a public

official, insurers are required to provide the insured with a copy of the most recent

Department Notice no later than 15 calendar days from the date on which the insurer

received notice of the claim (Cal. Ins. Code section 14046[b])

ential property insurance arising as a result of a declared state of emergency, as

defined in Government Code section 8558, or other emergency declared by a public

official, insurers are required to provide the insured with a copy of the most recent

Department Notice no later than 15 calendar days from the date on which the insurer

received notice of the claim (Cal. Ins. Code section 14046[b]).

Copy of Complete Policy After a Loss: After a covered loss under a policy covered by

California Insurance Code section 2071, an insurer shall provide to the insured, free of

charge, a complete, current copy of their policy within 30 calendar days of receipt of a

request from the insured. The policy must include the full insurance policy, any

endorsements, and the declarations page (Cal. Ins. Code section 2084).

Additional Living Expenses

• List of Items Covered: If requested by the insured, insurance companies are required

to provide the insured with a list of items that an insurer believes would be covered

under the policy (Cal. Ins. Code section 2060[a]).

• Time Limit to Collect Additional Living Expenses: In the event of a covered loss

relating to a state of emergency, as defined in Government Code section 8558, on

and after July 1, 2021, coverage for additional living expenses (or loss of use) shall

be for at least 24 months from the inception of the loss, but shall be subject to other

policy provisions. An insurer shall grant an extension of up to 12 additional months,

for a total of 36 months, if an insured acting in good faith and with reasonable diligence

encounters a delay or delays in the reconstruction process that are the result of

circumstances beyond the control of the insured. Circumstances beyond the control

of the insured include, but are not limited to, unavoidable construction permit delays,

lack of necessary construction materials, and lack of available contractors to perform

the necessary work

d faith and with reasonable diligence

encounters a delay or delays in the reconstruction process that are the result of

circumstances beyond the control of the insured. Circumstances beyond the control

of the insured include, but are not limited to, unavoidable construction permit delays,

lack of necessary construction materials, and lack of available contractors to perform

the necessary work. Additional extensions of six months shall be provided to

policyholders for good cause (Cal. Ins. Code section 2060[b][1]).

Guide for Adjusting Property Claims

in California After a Major Disaster – January 9, 2025

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• Uninhabitable/Reasonable Habitation: If the insured home is rendered

uninhabitable by a covered peril, on and after July 1, 2021, a policy that provides

coverage for additional living expenses shall not limit the policyholder’s right to

recovery. However, an insurer may, in lieu of making living expense payments

required by this subdivision, provide a reasonable alternative remedy that addresses

the property condition that precludes reasonable habitation of the insured premises.

The additional living expense coverage subject to this section does not include a utility

public safety power shut off event, which is the deenergization of a portion of the

electrical distribution or transmission system to reduce the risk of wildfire ignition (Cal.

Ins. Code section 2060[b][2]).

• Restricted Access by Civil Authority: In the event of a state of emergency, as

defined in California Government Code section 8558, for a loss that is otherwise not

subject to California Insurance Code sections 2060(b)(1) and (2) above, that is

accompanied by an order of civil authority restricting access to the home related to a

covered peril on and after July 1, 2021, additional living expense coverage shall be

provided for at least two weeks. Additional extensions of two weeks shall be provided

to a policyholder for good cause, but shall be subject to other policy provisions (Cal.

Ins

de sections 2060(b)(1) and (2) above, that is

accompanied by an order of civil authority restricting access to the home related to a

covered peril on and after July 1, 2021, additional living expense coverage shall be

provided for at least two weeks. Additional extensions of two weeks shall be provided

to a policyholder for good cause, but shall be subject to other policy provisions (Cal.

Ins. Code section 2060[c]).

• Advance Payment: In the event of a covered loss relating to a state of emergency as

defined in California Government Code section 8558, the following special provision

shall apply under a residential property insurance policy:

If an insured has made a claim for additional living expenses related to a total

loss, an insurer shall, upon request by an insured, render an advance payment

of no less than four months of living expenses. Additional payment for

additional living expenses shall be payable upon proper proof following the

advance period (Cal. Ins. Code section 2061[a]).

• Itemization of Contents: In the event of a covered loss relating to a state of

emergency, as defined in California Government Code section 8558, the following

special provisions shall apply under a residential property insurance policy:

(1) If an insured has made a claim for contents related to a total loss of a

primary residence, an insurer shall not require that the insured use a companyspecific inventory form if the insured can provide an inventory using a form that

contains substantially the same information. This subdivision does not limit the

authority of an insurer to seek additional reasonable information from an

insured upon receipt of an inventory form submitted by an insured.

tal loss of a

primary residence, an insurer shall not require that the insured use a companyspecific inventory form if the insured can provide an inventory using a form that

contains substantially the same information. This subdivision does not limit the

authority of an insurer to seek additional reasonable information from an

insured upon receipt of an inventory form submitted by an insured.

(2) If an insured has made a claim for contents related to a total loss of a

primary residence, an insurer shall accept an inventory that includes groupings

of categories of personal property, including clothing, shoes, books, food items,

CDs, DVDs, or other categories of items for which it would be impractical to

separately list each individual item claimed (Cal. Ins. Code section 2061[a]).

Guide for Adjusting Property Claims

in California After a Major Disaster – January 9, 2025

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Grace Period: In the event of a state of emergency, as defined in California Government

Code section 8558, an insurer shall offer a 60-day grace period for payment of premiums

for residential property insurance policies covering a property located within the affected

area defined in the state of emergency for a period of 60 days after the emergency. This

section does not require any change to insurer billing practices regarding billing,

automatic payment, or cancellation for nonpayment if the insurer reinstates, without a

lapse in coverage or late fees, any policy subject to this section that was canceled for

nonpayment of premiums, if requested by the insured and upon reasonably timely

payment of all premiums due (Cal. Ins. Code section 2062)

section does not require any change to insurer billing practices regarding billing,

automatic payment, or cancellation for nonpayment if the insurer reinstates, without a

lapse in coverage or late fees, any policy subject to this section that was canceled for

nonpayment of premiums, if requested by the insured and upon reasonably timely

payment of all premiums due (Cal. Ins. Code section 2062).

Policy Coverage – Peril of Fire: If an insurer issues a new residential property insurance

policy on or after July 1, 2021, that does not provide coverage for the peril of fire, the

insurer shall, on or before the date of issuance of the policy, obtain a signed

acknowledgment from the applicant or insured stating that the newly issued policy does

not provide coverage for the peril of fire. If the applicant or insured does not sign the

required acknowledgment on or before the issuance of the policy, the insurer shall obtain

the signed acknowledgment from the applicant or insured within 60 days of the date of

issuance of the policy. For purposes of this subdivision, a new or newly issued policy

does not include renewal of an existing policy, including a renewal that contains different

terms than the preceding policy periods.

If an insurer issues or renews a residential property insurance policy on or after July 1,

2021, that does not provide coverage for the peril of fire, the insurer shall prominently

disclose both of the following on the declarations page of the policy:

(1) The following statement in bold, uppercase letters in no less than 12-point type:

THIS POLICY DOES NOT COVER THE PERIL OF FIRE. THERE ARE OTHER

RESOURCES FOR FINDING FIRE COVERAGE, INCLUDING USING THE

CALIFORNIA DEPARTMENT OF INSURANCE’S HOME INSURANCE FINDER OR

PURCHASING COVERAGE FROM THE CALIFORNIA FAIR PLAN ASSOCIATION.

se both of the following on the declarations page of the policy:

(1) The following statement in bold, uppercase letters in no less than 12-point type:

THIS POLICY DOES NOT COVER THE PERIL OF FIRE. THERE ARE OTHER

RESOURCES FOR FINDING FIRE COVERAGE, INCLUDING USING THE

CALIFORNIA DEPARTMENT OF INSURANCE’S HOME INSURANCE FINDER OR

PURCHASING COVERAGE FROM THE CALIFORNIA FAIR PLAN ASSOCIATION.

(2) Information on the California FAIR Plan, as required by subdivision (h) of California

Insurance Code section 10095, and information on the California Home Insurance Finder,

as required by subdivision (b) of California Insurance Code section 10095.7 (Cal. Ins.

Code section 10103.6).

Policy Provisions and Benefits: Insurers are required to provide complete disclosure

of all benefits, coverage, time limits, or other provisions of the insurance policy issued to

the insured or beneficiary. Adjusters must immediately communicate with and assist the

insured in determining the extent of the insurer's additional liability when additional

benefits might reasonably be payable under an insured's policy upon receipt of additional

proofs of claim.

The insurer cannot:

• deny a claim based on the claimant's failure to exhibit property, unless there is

documentation in the file of: (1) reasonable demand by the insurer, and unfounded

refusal by the claimant, to exhibit property, or (2) the breach of any policy provision

providing for the exhibition of property (Cal. Code Regs., Title 10, section 2695.4[c])

of additional

proofs of claim.

The insurer cannot:

• deny a claim based on the claimant's failure to exhibit property, unless there is

documentation in the file of: (1) reasonable demand by the insurer, and unfounded

refusal by the claimant, to exhibit property, or (2) the breach of any policy provision

providing for the exhibition of property (Cal. Code Regs., Title 10, section 2695.4[c])

Guide for Adjusting Property Claims

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• require the claimant to sign a release that extends beyond the subject matter that gave

rise to the claim payment, as defined in California Code of Regulations, Title 10,

section 2695.4(e)(1)

• issue compensation or a partial settlement of a loss claim unless a compromise

settlement has been agreed to by the insurer and insured in writing as defined in

California Code of Regulations, Title 10, section 2695.4(f)

• require a duplicate proof of claim submission from the claimant as defined in California

Code of Regulations, Title 10, section 2695.4(g)

Duties Upon Receipt of Communications:

• Initial Contact – Upon receiving notice of claim, every licensee or claims agent shall

immediately transmit notice of claim to the insurer. Within 15 calendar days of

receiving notice of a claim, the insurer must acknowledge receipt of the notice to the

claimant unless payment is made within that time. If the acknowledgement is not in

writing, a notation of acknowledgement shall be made in the insurer’s claim file and

dated. The insurer must also provide the necessary forms, instructions, and

reasonable assistance, including but not limited to, specifying the information the

claimant must provide for proof of claim and must begin any necessary investigation

of the claim (Cal. Code Regs., Title 10, sections 2695.5[d] and [e])

riting, a notation of acknowledgement shall be made in the insurer’s claim file and

dated. The insurer must also provide the necessary forms, instructions, and

reasonable assistance, including but not limited to, specifying the information the

claimant must provide for proof of claim and must begin any necessary investigation

of the claim (Cal. Code Regs., Title 10, sections 2695.5[d] and [e]).

• Response to Claimant Communications – Within 15 calendar days of receiving

communication from a claimant that reasonably suggests a response is expected, the

licensee must respond to the claimant with a complete response of the facts as then

known by the licensee (Cal. Code Regs., Title 10, section 2695.5[b]).

Response Timelines and Written Communication

Acceptance or Denial of Claim – California Code of Regulations, Title 10, section

2695.7(b) states the following:

Upon receiving proof of claim, every insurer, except as specified in California Code

of Regulations, Title 10, section 2695.7(b)(4) below, shall immediately, but in no

event more than forty (40) calendar days later, accept or deny the claim, in whole or

in part. The amounts accepted or denied shall be clearly documented in the claim file

unless the claim has been denied in its entirety. Specifically, as follows:

(1) Where an insurer denies or rejects a first party claim, in whole or in part, it

shall do so in writing and shall provide to the claimant a statement listing all bases

for such rejection or denial and the factual and legal bases for each reason given

for such rejection or denial which is then within the insurer's knowledge. Where

an insurer's denial of a first party claim, in whole or in part, is based on a specific

statute, applicable law or policy provision, condition or exclusion, the written

denial shall include reference thereto and provide an explanation of the

application of the statute, applicable law or provision, condition or exclusion to the

claim

r denial which is then within the insurer's knowledge. Where

an insurer's denial of a first party claim, in whole or in part, is based on a specific

statute, applicable law or policy provision, condition or exclusion, the written

denial shall include reference thereto and provide an explanation of the

application of the statute, applicable law or provision, condition or exclusion to the

claim. Every insurer that denies or rejects a third-party claim, in whole or in part,

or disputes liability or damages shall do so in writing.

Guide for Adjusting Property Claims

in California After a Major Disaster – January 9, 2025

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(2) Subject to the provisions of California Code of Regulations, Title 10, section

2695.7(k), nothing contained in California Code of Regulations, Title 10, section

2695.7(b)(1) shall require an insurer to disclose any information that could

reasonably be expected to alert a claimant to the fact that the subject claim is

being investigated as a suspected fraudulent claim.

(3) Written notification pursuant to this subsection shall include a statement that,

if the claimant believes all or part of the claim has been wrongfully denied or

rejected, he or she may have the matter reviewed by the California Department

of Insurance, and shall include the address and telephone number of the unit of

the Department which reviews claims practices.

(4) The time frame in California Code of Regulations, Title 10, section 2695.7(b)

shall not apply to claims arising from policies of disability insurance subject to

California Insurance Code section 10123.13, disability income insurance subject

to California Insurance Code section 10111.2, or mortgage guaranty insurance

subject to California Insurance Code section 12640.09(a) and shall not apply to

automobile repair bills arising from policies of automobile collision and

comprehensive insurance subject to California Insurance Code section 560

subject to

California Insurance Code section 10123.13, disability income insurance subject

to California Insurance Code section 10111.2, or mortgage guaranty insurance

subject to California Insurance Code section 12640.09(a) and shall not apply to

automobile repair bills arising from policies of automobile collision and

comprehensive insurance subject to California Insurance Code section 560. All

other provisions of California Code of Regulations, Title 10, sections

2695.7(b)(1), (2), and (3) are applicable.

Within 40 days of receiving proof of claim, the insurer is required to accept or deny

the claim in writing, in whole or in part. If the insurer needs additional time, the insurer

must provide the insured a written notice that specifies any additional information

the adjuster requires in order to make a determination. Every 30 days, an updated

extension notice must be provided to the insured until a final determination is made

or notice of legal action is served (Cal. Code Regs., Title 10, section 2695.7[c]).

Actual Cash Value Calculation: Under an open policy, the measure of indemnity in

fire insurance is the expense to the insured of replacing the thing lost or injured in

its condition at the time of the injury, the expense being computed as of the time

of the commencement of the fire.

Under an open policy that requires payment of actual cash value, the measure of the

actual cash value recovery, in whole or partial settlement of the claim, for either a total or

partial loss to the structure or its contents, shall be the amount it would cost the insured

to repair, rebuild, or replace the thing lost or injured less a fair and reasonable deduction

for physical depreciation based upon its condition at the time of the injury or the policy

limit, whichever is less. A deduction for physical depreciation shall apply only to

components of a structure that are normally subject to repair and replacement during the

useful life of that structure (Cal. Ins. Code section 2051).

place the thing lost or injured less a fair and reasonable deduction

for physical depreciation based upon its condition at the time of the injury or the policy

limit, whichever is less. A deduction for physical depreciation shall apply only to

components of a structure that are normally subject to repair and replacement during the

useful life of that structure (Cal. Ins. Code section 2051).

Guide for Adjusting Property Claims

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Replacement Cost Value Calculation

Under an open policy that requires payment of the replacement cost for a loss, the

measure of indemnity is the amount that it would cost the insured to repair, rebuild, or

replace the thing lost or injured, without a deduction for physical depreciation, or the policy

limit, whichever is less (Cal. Ins. Code section 2051.5[a]).

Rebuilding in Current Location or Rebuilding or Replacing in a New Location: In

the event of a total loss of the insured structure, a policy issued or delivered in this state

shall not contain a provision that limits or denies on the basis that the insured has decided

to rebuild at a new location or to purchase an already built home at a new location,

payment of the building code upgrade cost or the replacement cost, including any

extended replacement cost coverage to the extent those costs are otherwise covered by

the terms of the policy or any policy endorsement. However, the measure of indemnity

shall not exceed the replacement cost, including the building code upgrade cost and any

extended replacement cost coverage, if applicable, to repair, rebuild, or replace the

insured structure at its original location (Cal. Ins. Code section 2051.5[c][1])

erage to the extent those costs are otherwise covered by

the terms of the policy or any policy endorsement. However, the measure of indemnity

shall not exceed the replacement cost, including the building code upgrade cost and any

extended replacement cost coverage, if applicable, to repair, rebuild, or replace the

insured structure at its original location (Cal. Ins. Code section 2051.5[c][1]).

Land Value Deduction: For a residential property insurance policy, the measure of

damages available to a policyholder to use to rebuild or replace the insured home at

another location shall be the amount that would have been recoverable had the insured

dwelling been rebuilt at its original location, and a deduction for the value of land at the

new location shall not be permitted from that measure of damages. However, the

measure of indemnity shall not exceed the cost, including the building code upgrade cost

and any extended replacement cost coverage, if applicable, to rebuild the insured

structure at its original location (Cal. Ins. Code section 2051.5[c][2]).

Replacement Cost: Fire and extended coverage type policies with replacement cost

coverage cover the repair and replacement of damaged property, as well as the repair of

any damage incurred in making such repairs or replacements. When items or parts are

replaced, such items or parts should be of the same quality as those they are replacing.

Specifically, California Code of Regulations, Title 10, section 2695.9(a) states the

following:

e type policies with replacement cost

coverage cover the repair and replacement of damaged property, as well as the repair of

any damage incurred in making such repairs or replacements. When items or parts are

replaced, such items or parts should be of the same quality as those they are replacing.

Specifically, California Code of Regulations, Title 10, section 2695.9(a) states the

following:

(a) When a residential or commercial property insurance policy provides for the

adjustment and settlement of first party losses based on replacement cost, the

following standards apply:

(1) When a loss requires repair or replacement of an item or part, any

consequential physical damage incurred in making the repair or replacement

not otherwise excluded by the policy shall be included in the loss. The insured

shall not have to pay for depreciation nor any other cost except for the

applicable deductible.

(2) When a loss requires replacement of items and the replaced items do not

match in quality, color, or size, the insurer shall replace all items in the damaged

area so as to conform to a reasonably uniform appearance.

Guide for Adjusting Property Claims

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Building Code Upgrade Coverage: An open policy of residential property insurance that

provides replacement cost coverage shall not be issued or renewed unless it provides

additional building code upgrade coverage of no less than 10 percent of the dwelling

coverage policy limits. The building code upgrade coverage required by this subdivision

shall be additional coverage, and use of this coverage shall not reduce or deplete the

dwelling coverage policy limits for the insured property. Insurers may offer building code

upgrade coverage of greater than 10 percent of the dwelling coverage policy limits in

addition to providing the minimum coverage of 10 percent of the dwelling coverage policy

limits (Cal. Ins. Code section 10103[c])

shall be additional coverage, and use of this coverage shall not reduce or deplete the

dwelling coverage policy limits for the insured property. Insurers may offer building code

upgrade coverage of greater than 10 percent of the dwelling coverage policy limits in

addition to providing the minimum coverage of 10 percent of the dwelling coverage policy

limits (Cal. Ins. Code section 10103[c]).

Ability to Combine Coverages: In the event of a claim relating to a state of emergency,

an insured under a residential property insurance policy shall be permitted to combine

payments for claims for losses up to the policy limits for the primary dwelling and other

structures, for any of the covered expenses reasonably necessary to rebuild or replace

the damaged or destroyed dwelling, if the policy limits for coverage to rebuild or replace

the primary dwelling are insufficient (Cal. Ins. Code section 10103.7[a]).

Payment of Contents Without Inventory: In the event of a covered total loss of a

primary dwelling under a residential property insurance policy resulting from a state of

emergency, if the residence was furnished at the time of the loss, (1) the insurer shall

offer a payment under the contents (personal property) coverage in an amount no less

than 30 percent of the policy limit applicable to the covered dwelling structure, up to a

maximum of two hundred fifty thousand dollars ($250,000), without requiring the insured

to file an itemized claim.

(2) After receiving the payment described in paragraph (1), the insured may recover

additional amounts up to the policy limit for contents coverage by filing a claim

pursuant to the terms of the policy for the loss of contents that exceeds the value of

the payment provided pursuant to paragraph (1).

fifty thousand dollars ($250,000), without requiring the insured

to file an itemized claim.

(2) After receiving the payment described in paragraph (1), the insured may recover

additional amounts up to the policy limit for contents coverage by filing a claim

pursuant to the terms of the policy for the loss of contents that exceeds the value of

the payment provided pursuant to paragraph (1).

(3) When an insured files a claim relating to a state of emergency, as defined in California

Government Code section 8558, the insurer shall notify the insured of the option to

receive payment for loss of contents pursuant to paragraph (1) and of the insured’s

option to subsequently file a full itemized claim pursuant to paragraph (2).

(4) This subdivision does not affect payment under the policy for scheduled personal

property.

(5) This section does not prohibit an insurer from restricting payment in cases of

suspected fraud (Cal. Ins. Code section 10103.7[b]).

Estimate Reconciliation: If losses are settled on the basis of a written scope and/or

estimate provided by or for the insurer, the insurer must provide the claimant with a copy

of the written scope and/or prepared estimate of the settlement. The prepared estimate

shall provide the claimant with an amount that will restore the damaged property to no

less than its prior condition before the loss that meets trade standards of good and

workmanlike construction.

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Reasonable steps must be taken to verify the repair and rebuilding costs utilized by the

insurer are accurate and representative of costs in the local market area. If the claimant

is able to provide a written estimate that necessary repairs will exceed the written estimate

prepared by the insurer, the insurer must:

(1) pay the difference between its written estimate and a higher estimate obtained by

the claimant,

e taken to verify the repair and rebuilding costs utilized by the

insurer are accurate and representative of costs in the local market area. If the claimant

is able to provide a written estimate that necessary repairs will exceed the written estimate

prepared by the insurer, the insurer must:

(1) pay the difference between its written estimate and a higher estimate obtained by

the claimant,

(2) promptly provide the claimant with the name of at least one repair individual or

entity that will make the repairs for the amount of the written estimate, or

(3) adjust any written estimates prepared by the repair individual or entity of the

insured's choice and provide a copy of the adjusted estimate to the claimant.

Specifically, California Code of Regulations, Title 10, section 2695.9(d) states the

following:

(d) If losses are settled on the basis of a written scope and/or estimate prepared by or

for the insurer, the insurer shall supply the claimant with a copy of each document

upon which the settlement is based. The estimate prepared by or for the insurer shall

be in accordance with applicable policy provisions, of an amount which will restore the

damaged property to no less than its condition prior to the loss and which will allow

for repairs to be made in a manner which meets accepted trade standards for good

and workmanlike construction. The insurer shall take reasonable steps to verify that

the repair or rebuilding costs utilized by the insurer or its claims agents are accurate

and representative of costs in the local market area. If the claimant subsequently

contends, based upon a written estimate which he or she obtains, that necessary

repairs will exceed the written estimate prepared by or for the insurer, the insurer shall:

(1) pay the difference between its written estimate and a higher estimate obtained

by the claimant; or,

r or its claims agents are accurate

and representative of costs in the local market area. If the claimant subsequently

contends, based upon a written estimate which he or she obtains, that necessary

repairs will exceed the written estimate prepared by or for the insurer, the insurer shall:

(1) pay the difference between its written estimate and a higher estimate obtained

by the claimant; or,

(2) if requested by the claimant, promptly provide the claimant with the name of at

least one repair individual or entity that will make the repairs for the amount of the

written estimate. The insurer shall cause the damaged property to be restored to

no less than its condition prior to the loss and which will allow for repairs in a

manner which meets accepted trade standards for good and workmanlike

construction at no additional cost to the claimant other than as stated in the policy

or as otherwise allowed by these regulations; or,

(3) reasonably adjust any written estimates prepared by the repair individual or

entity of the insured's choice and provide a copy of the adjusted estimate to the

claimant.

Time Limit to Collect Full Replacement Costs: An insured will have no less than 12

months (from the date that the first payment toward the actual cash value is made) to

collect the full replacement cost of the loss, subject to the policy limit. In the event of a

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loss relating to a “state of emergency,” as defined in California Government Code section

8558, an insured will have no less than 36 months (from the date that the first payment

toward the actual cash value is made) in order to collect the full replacement cost of the

loss, subject to the policy limit. Additional extensions of six months shall be provided to

policyholders for good cause. Specifically, California Insurance Code sections 2051.5(a),

(b), and (c) state the following:

8558, an insured will have no less than 36 months (from the date that the first payment

toward the actual cash value is made) in order to collect the full replacement cost of the

loss, subject to the policy limit. Additional extensions of six months shall be provided to

policyholders for good cause. Specifically, California Insurance Code sections 2051.5(a),

(b), and (c) state the following:

(a)(1) Under an open policy that requires payment of the replacement cost for a loss,

the measure of indemnity is the amount that it would cost the insured to repair, rebuild,

or replace the thing lost or injured without a deduction for physical depreciation, or the

policy limit, whichever is less.

(a)(2) If the policy requires the insured to repair, rebuild, or replace the damaged

property in order to collect the full replacement cost, the insurer shall pay the actual

cash value of the damaged property, as defined in California Insurance Code section

2051, until the damaged property is repaired, rebuilt, or replaced. Once the property

is repaired, rebuilt, or replaced, the insurer shall pay the difference between the actual

cash value payment made and the full replacement cost reasonably paid to replace

the damaged property up to the limits stated in the policy.

(b)(1)(A) A time limit of less than 12 months from the date that the first payment toward

the actual cash value is made shall not be placed upon an insured in order to collect

the full replacement cost of the loss, subject to the policy limit.

(b)(1)(B) In the event of a loss relating to a “state of emergency,” as defined in

California Government Code section 8558, a time limit of less than 36 months from

the date that the first payment toward the actual cash value is made shall not be placed

upon the insured in order to collect the full replacement cost of the loss, subject to the

policy limit.

(b)(1)(C) This section does not prohibit an insurer from allowing the insured additional

time to collect the full replacement cost.

vernment Code section 8558, a time limit of less than 36 months from

the date that the first payment toward the actual cash value is made shall not be placed

upon the insured in order to collect the full replacement cost of the loss, subject to the

policy limit.

(b)(1)(C) This section does not prohibit an insurer from allowing the insured additional

time to collect the full replacement cost.

(b)(2) An insurer shall provide to a policyholder one or more additional extensions of

six months for good cause pursuant to subparagraph (A) or (B) of paragraph (1) if the

insured, acting in good faith and with reasonable diligence, encounters a delay or

delays in approval for, or reconstruction of, the home or residence that are beyond the

control of the insured. Circumstances beyond the control of the insured include, but

are not limited to, unavoidable construction permit delays, the lack of necessary

construction materials, or the unavailability of contractors to perform the necessary

work.

(c)(1) In the event of a total loss of the insured structure, a policy issued or delivered

in this state shall not contain a provision that limits or denies, on the basis that the

insured has decided to rebuild at a new location or to purchase an already built home

at a new location, payment of the building code upgrade cost or the replacement cost,

including any extended replacement cost coverage, to the extent those costs are

otherwise covered by the terms of the policy or any policy endorsement. However, the

Guide for Adjusting Property Claims

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Page 18

measure endorsement. However, the measure of indemnity shall not exceed the

replacement cost, including the building code upgrade cost and any extended

replacement cost coverage, if applicable, to repair, rebuild, or replace the insured

structure at its original location.

ment. However, the

Guide for Adjusting Property Claims

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Page 18

measure endorsement. However, the measure of indemnity shall not exceed the

replacement cost, including the building code upgrade cost and any extended

replacement cost coverage, if applicable, to repair, rebuild, or replace the insured

structure at its original location.

(c)(2) Notwithstanding any other law, for a residential property insurance policy, the

measure of damages available to a policyholder to use to rebuild or replace the

insured home at another location shall be the amount that would have been

recoverable had the insured dwelling been rebuilt at its original location, and a

deduction for the value of land at the new location shall not be permitted from that

measure of damages. However, the measure of indemnity shall not exceed the cost,

including the building code upgrade cost and any extended replacement cost

coverage, if applicable, to rebuild the insured structure at its original location.

Investigation: The insurer shall conduct and diligently pursue a thorough, fair, and

objective investigation and cannot persist in seeking information not reasonably required

for or material irrelevant to the resolution of a claim dispute (Cal. Code Regs., Title 10,

section 2695.7[d]).

Changing Claims Adjusters – Primary Point of Contact: If, within a six-month period,

the company assigns a third or subsequent adjuster to be primarily responsible for a

claim, the insurer shall provide the insured with a written status report. The written status

report must include a summary of any decisions or actions that are substantially related

to the disposition of a claim, including, but not limited to, the amount of losses to structures

or contents, the retention or consultation of design or construction professionals, the

amount of coverage for losses to structures or contents, and all items of dispute (Cal. Ins.

Code section 2071)

en status

report must include a summary of any decisions or actions that are substantially related

to the disposition of a claim, including, but not limited to, the amount of losses to structures

or contents, the retention or consultation of design or construction professionals, the

amount of coverage for losses to structures or contents, and all items of dispute (Cal. Ins.

Code section 2071).

Note: In addition to the above, California Insurance Code section 14047 requires for a

claim arising from a state of emergency, if, within a six-month period, an insurer assigns

a third or subsequent first-party real or personal property claims adjuster, the insurer shall

establish a primary point of contact for the insured and provide the insured one or more

direct means of communication with the primary point of contact (Cal. Ins. Code section

2071).

Specifically, the primary point of contact shall be available to respond to inquiries by the

insured related to the residential property insurance claim. Other claims personnel,

vendors, or professionals, including clerical staff members and call center staff members,

may work on portions of the insured’s claim. Once assigned, the primary point of contact

shall remain assigned to the insured’s claim until the insurer determines that the

residential property claim is closed or litigation has been filed.

The insurer is required to ensure the primary point of contact refers and transfers an

insured to the appropriate supervisor with a span of control over the primary point of

contact upon the request of the insured. This process shall be satisfied by a referral to a

first-tier or second-tier manager with authority over claim handling (Cal. Ins. Code section

14047).

litigation has been filed.

The insurer is required to ensure the primary point of contact refers and transfers an

insured to the appropriate supervisor with a span of control over the primary point of

contact upon the request of the insured. This process shall be satisfied by a referral to a

first-tier or second-tier manager with authority over claim handling (Cal. Ins. Code section

14047).

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Appraisal: In the event of a government-declared disaster, as defined in the California

Government Code, appraisal may be requested by either the insured or the insurance

company but shall not be compelled (Cal. Ins. Code section 2071).

Once the appraisal provision under an insurance policy is invoked, the appraisal process

shall not include any legal proceeding or procedure not specified under California

Insurance Code section 2071. Nothing herein is intended to preclude separate legal

proceedings on issues unrelated to the appraisal process (Cal. Code Regs, Title 10,

section 2695.9[e]).

Suits: No suit or action on this policy for the recovery of any claim shall be sustainable in

any court of law or equity unless all the requirements of this policy shall have been

complied with and unless commenced within 12 months next after inception of the loss.

If the loss is related to a state of emergency, the time limit to bring suit is extended to 24

months after inception of the loss (Cal. Ins. Code section 2071).

Betterment, Depreciation, Salvage: When the amount claimed is adjusted because of

betterment, depreciation, or salvage, all justification for the adjustment shall be contained

in the claim file. Any dollar amount adjustments shall accurately reflect the value of the

betterment, depreciation, or salvage

ng suit is extended to 24

months after inception of the loss (Cal. Ins. Code section 2071).

Betterment, Depreciation, Salvage: When the amount claimed is adjusted because of

betterment, depreciation, or salvage, all justification for the adjustment shall be contained

in the claim file. Any dollar amount adjustments shall accurately reflect the value of the

betterment, depreciation, or salvage. Any adjustments for betterment or depreciation

must reflect a measurable difference in market value attributable to the condition and age

of the property and apply only to property normally subject to repair and replacement

during the useful life of the property. The basis for any adjustment must be fully explained

to the claimant in writing.

Under a policy, subject to California Insurance Code section 2071, where the insurer is

required to pay the expense of repairing, rebuilding, or replacing the property destroyed

or damaged with other of like kind and quality, the measure of recovery is determined by

the actual cash value of the damaged or destroyed property, as set forth in California

Insurance Code section 2051. Labor expenses to repair, rebuild, or replace insured

property is not a component of physical depreciation and is not subject to depreciation or

betterment. Specifically, California. Code Regulations, Title 10, section 2695.9(f) states

the following:

(f) When the amount claimed is adjusted because of betterment, depreciation, or

salvage, all justification for the adjustment shall be contained in the claim file. Any

adjustments shall be discernable, measurable, itemized, and specified as to dollar

amount, and shall accurately reflect the value of the betterment, depreciation, or

salvage. Any adjustments for betterment or depreciation shall reflect a measurable

difference in market value attributable to the condition and age of the property and

apply only to property normally subject to repair and replacement during the useful life

of the property

e, itemized, and specified as to dollar

amount, and shall accurately reflect the value of the betterment, depreciation, or

salvage. Any adjustments for betterment or depreciation shall reflect a measurable

difference in market value attributable to the condition and age of the property and

apply only to property normally subject to repair and replacement during the useful life

of the property. The basis for any adjustment shall be fully explained to the claimant

in writing.

(1) Under a policy, subject to California Insurance Code section 2071, where the

insurer is required to pay the expense of repairing, rebuilding or replacing the

property destroyed or damaged with other of like kind and quality, the measure of

recovery is determined by the actual cash value of the damaged

Guide for Adjusting Property Claims

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Page 20

or destroyed property, as set forth in California Insurance Code California

Insurance Code section 2051. Except for the intrinsic labor costs that are included

in the cost of manufactured materials or goods, the expense of labor necessary to

repair, rebuild, or replace covered property is not a component of physical

depreciation and shall not be subject to depreciation or betterment.

Prohibited Conduct:

• No Attempts to Settle Unreasonably Low – Insurers shall not attempt to settle a

claim by making a settlement offer that is unreasonably low. The Department will

consider the evidence offered to determine whether or not the settlement offer is

unreasonably low (Cal. Code Regs., Title 10, section 2695.7[g]).

• Claims Settlement Practices – Discrimination by insurers in their claims settlement

practices are strictly prohibited. Claims must be accepted or denied, in whole or in

part, on a timely basis and denials must be made in writing (Cal. Code Regs., Title 10,

section 2695.7[a])

to determine whether or not the settlement offer is

unreasonably low (Cal. Code Regs., Title 10, section 2695.7[g]).

• Claims Settlement Practices – Discrimination by insurers in their claims settlement

practices are strictly prohibited. Claims must be accepted or denied, in whole or in

part, on a timely basis and denials must be made in writing (Cal. Code Regs., Title 10,

section 2695.7[a]).

• Referrals – Insurers cannot recommend or suggest a building contractor unless the

insured was informed in writing of the right to select a repair individual or entity and

expressly requests or agrees to use the individual or entity building contractor. The

insurer shall restore the damaged property to no less than its condition prior to the

loss and repaired in a manner that meets acceptable trade standards for good and

workmanlike construction at no additional cost to the claimant other than as stated in

the policy or allowed by regulations (Cal. Code Regs., Title 10, sections 2695.9[b] and

[c]).

• Settlements – The insurer is not to delay or deny settlement of an insured’s claim on

the basis that responsibility for payment should be assumed by other persons, except

provided by the insurance policy provisions, California statutes, or regulations,

including those pertaining to coordination of benefits (Cal. Code Regs., Title 10,

section 2695.7 [e]).

• Claimant’s Rights – An insurer shall not inform a claimant that the claimant’s rights

may be impaired if a form or release is not completed within a specified time period

unless the information is given for the purpose of notifying the claimant of any

applicable statute of limitations or policy provision or the time limitation within which

claims are required to be brought against state or local entities (Cal. Code Regs., Title

10, section 2695.7[i]).

• Polygraph Examination – Insurers cannot request or require an insured to submit to

a polygraph examination unless authorized under the applicable insurance contract

and state law (Cal. Code Regs

cable statute of limitations or policy provision or the time limitation within which

claims are required to be brought against state or local entities (Cal. Code Regs., Title

10, section 2695.7[i]).

• Polygraph Examination – Insurers cannot request or require an insured to submit to

a polygraph examination unless authorized under the applicable insurance contract

and state law (Cal. Code Regs. Title 10, section 2695.7[j]).

• Documented Telephone Conversation – Insurers shall not deny a claim based upon

information obtained in a telephone conversation or personal interview with any

source unless the telephone conversation or personal interview is documented in the

claim file pursuant to the provisions of California Code Regulations, Title 10, section

2695.3 (Cal. Code Regs. Title 10, section 2695.7[l]).

• Complaints – The insurer cannot require that an insured withdraw, rescind, or refrain

from submitting any complaint to the Department regarding the handling of a claim or

any other matter complained of as a condition to settlement of the insurance claim

(Cal. Code Regs. Title 10, section 2695.7[o]).

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Statute of Limitation: Except where a claim has been settled by payment, every insurer

shall provide written notice of any statute of limitation or other time period requirement

upon which the insurer may rely to deny a claim. Such notice shall be given to the claimant

not less than sixty (60) days prior to the expiration date; except, if notice of claim is first

received by the insurer within that sixty days, then notice of the expiration date must be

given to the claimant immediately

rovide written notice of any statute of limitation or other time period requirement

upon which the insurer may rely to deny a claim. Such notice shall be given to the claimant

not less than sixty (60) days prior to the expiration date; except, if notice of claim is first

received by the insurer within that sixty days, then notice of the expiration date must be

given to the claimant immediately. With respect to a first party claimant in a matter

involving an uninsured motorist, this notice shall be given at least thirty (30) days prior to

the expiration date; except, if notice of claim is first received by the insurer within that

thirty days, then notice of the expiration date must be given to the claimant immediately.

This subsection shall not apply to a claimant represented by counsel on the claim matter

(Cal. Code Regs. Title 10, section 2695.7[f]).

Prompt Payment: Within 30 days of accepting a claim in whole or in part and, when

necessary, upon receipt of a properly executed release, an insurer is to issue payment in

the amount that has been accepted by the insurer or otherwise take action to perform its

claim obligation (Cal. Code Regs. Title 10, section 2695.7[h]).

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California Department of Insurance Enforcement

The Department is authorized to take a range of enforcement actions against a licensee

or an adjuster not licensed in California for the misconduct of the adjusters not licensed

in California.

Specifically, California Insurance Code section 14064.5 states, in part, the Insurance

Commissioner may, at any time, deny, suspend, or revoke a nonlicensed adjuster’s

registration under California Insurance Code section 14022.5, or impose a restricted

registration, in the same manner and on the same grounds as the Commissioner may for

a license as set forth in California Insurance Code sections 14026.5 through section

14028.5, inclusive

n 14064.5 states, in part, the Insurance

Commissioner may, at any time, deny, suspend, or revoke a nonlicensed adjuster’s

registration under California Insurance Code section 14022.5, or impose a restricted

registration, in the same manner and on the same grounds as the Commissioner may for

a license as set forth in California Insurance Code sections 14026.5 through section

14028.5, inclusive.

In addition, the Commissioner may deny, suspend, revoke, or restrict an adjusting firm’s

license if a nonlicensed adjuster, registered by the firm pursuant to California Insurance

Code section 14022.5, commits an act that would give rise to suspension, revocation, or

restriction of the adjusting firm’s license under California Insurance Code sections 14038,

14039, or 14061 through 14064, inclusive.

Similarly, California Insurance Code section 14065 states, in part, that the Commissioner,

in lieu of suspending or revoking a license issued under this chapter for violations of

California Insurance Code sections 14061, 14063, 14064, and 14064.5, may impose a

civil penalty not to exceed five hundred dollars ($500) upon a licensee, if the

Commissioner determines that a penalty better serves the purposes of this law.

Guide for Adjusting Property Claims

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Page 23

Additional Adjuster Training

Training for Evaluating Earthquake Damage

California Insurance Code section 10089.3 and in California Code of Regulations, Title

10, section 2695.42 state insurers are required to provide training regarding the handling

of earthquake claims to insurance adjusters who evaluate earthquake claims for or on

behalf of the insurer. The insurer may

provide the training directly or have the

training provided by another entity. In

addition, the insurer is required to ensure

that the course of instruction meets all

requirements set forth in this section

nsurers are required to provide training regarding the handling

of earthquake claims to insurance adjusters who evaluate earthquake claims for or on

behalf of the insurer. The insurer may

provide the training directly or have the

training provided by another entity. In

addition, the insurer is required to ensure

that the course of instruction meets all

requirements set forth in this section. An

adjuster trained and accredited by one

insurer is be deemed accredited in order to

adjust claims for a different insurer unless

such

insurer

includes

additional

requirements. The content of the training

required shall include the following topics:

(a) The California Fair Claims Settlement Practices Regulations: California Code of

Regulations, Title 10, sections 2695.1 through 2696.14, inclusive. Demonstration of

compliance with the annual training and certification requirements of California Code of

Regulations, Title 10, section 2695.6 shall satisfy an insurance adjuster's training

requirements prescribed by this subsection.

(b) Determination of Scope of Loss: Adjusters shall be trained how to conduct a

thorough examination of the property to be inspected, including, but not limited to: attics,

crawlspaces, roofs, chimneys, foundations, and structural areas. The adjuster shall be

trained how to make a complete listing of all recent earthquake damage. Training shall

include building code upgrade issues and procedures to be followed if additional hidden

earthquake damage is found after repair of earthquake damage has begun.

accurate estimate of all covered earthquake damage. The adjuster shall be trained

regarding the appropriate level of detail to be contained in the estimate and the

documentation necessary to support the estimate. Adjusters shall be trained to reevaluate

the estimate if the actual costs of repair differ from the costs listed on the original estimate.

shall be trained how to create or obtain an

accurate estimate of all covered earthquake damage. The adjuster shall be trained

regarding the appropriate level of detail to be contained in the estimate and the

documentation necessary to support the estimate. Adjusters shall be trained to reevaluate

the estimate if the actual costs of repair differ from the costs listed on the original estimate.

(d) Determination of Necessity for Engineer or Expert: Adjusters shall be trained how

to evaluate visible damage and indicia of hidden damage to determine when to consult

with an engineer or other expert.

(e) California Department of Insurance Earthquake Mediation Program: Adjusters

shall receive training regarding the Earthquake Claims Mediation Program of the

Department set forth in California Insurance Code section 10089.70 and California Code

of Regulations, Title 10, sections 2696.1 through 2696.10.

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Page 24

(f) Assessment of Damage to Concrete Surfaces and Foundations: Adjusters shall

be trained on the basic techniques used to determine the difference between preexisting

cracks in the concrete of structures and new cracks caused by an earthquake. Complete

training pursuant to this subsection shall include methodology for determining when repair

or replacement of the concrete is appropriate and proper methods for concrete repair

including, but not limited to, injected epoxy methods.

(g) Subsequently Discovered Earthquake Damage: Adjusters shall be trained on the

basic requirements of current law regarding the obligation of the insurer to investigate any

earthquake damage that is discovered or reported and when it may be appropriate to

seek legal counsel to assist in making this determination.

ods for concrete repair

including, but not limited to, injected epoxy methods.

(g) Subsequently Discovered Earthquake Damage: Adjusters shall be trained on the

basic requirements of current law regarding the obligation of the insurer to investigate any

earthquake damage that is discovered or reported and when it may be appropriate to

seek legal counsel to assist in making this determination.

(h) Programs Designed to Assist Earthquake Victims: Adjusters shall be trained

regarding the existence of United States Small Business Administration and Federal

Emergency Management Agency or other similar programs intended to assist earthquake

victims. Training pursuant to this subsection shall include an overview of these programs

and deadlines, and how these programs and deadlines interact with the underlying

earthquake insurance claim.

_____________________________

For more information and additional earthquake related training, please review the

California Earthquake Authority website.

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in California After a Major Disaster – January 9, 2025

Page 25

Additional Adjuster Training

Flood Training

National Flood Insurance Program

Updated by NFIP

The Federal Emergency Management Agency (FEMA) requires all insurance adjusters

who adjust flood losses for the National Flood Insurance Program (NFIP) to have an

active NFIP flood control number (FCN). The following are FEMA’s adjustment standards

and requirements that clarify NFIP expectations of flood adjusters as outlined in the NFIP

Claims Manual, published January 27, 2025. FEMA has also published the Standard

Flood Insurance Policy Commentary that serves as a quick reference document for claims

professionals to find current NFIP guidance

relevant to key provisions and concepts

contained

within

the

Standard

Flood

Insurance Policy (SFIP)

ments that clarify NFIP expectations of flood adjusters as outlined in the NFIP

Claims Manual, published January 27, 2025. FEMA has also published the Standard

Flood Insurance Policy Commentary that serves as a quick reference document for claims

professionals to find current NFIP guidance

relevant to key provisions and concepts

contained

within

the

Standard

Flood

Insurance Policy (SFIP).

Adjuster Claims Professionals

Expectations

FEMA expects claim professionals who

handle NFIP losses to adopt FEMA’s core

values of compassion, fairness, integrity, and

respect.

FEMA Core Values

Compassion: Be empathetic to the stressful circumstances the policyholder may be

experiencing and your crucial role in helping their recovery. Every interaction with the

policyholder is an opportunity to cultivate a relationship.

Fairness: Strive to achieve principled, well-reasoned, and just outcomes in the execution

of all claims, and adjust each claim fairly and without unnecessary delay.

Integrity: Integrity is the foundation of all our actions and is central to our conduct.

Maintain the highest standards of integrity by creating a culture of honesty, consistency,

and predictability. Trust is the earned result of conducting our actions with integrity.

Failure to adhere to the highest standards reflects poorly on the NFIP.

Respect: Treat all policyholders with dignity and respect. This is not only important, but

it is also their right.

Customer Service Standards

Be Professional:

FEMA expects that claims professionals:

•

Know the unique reporting requirements of the NFIP;

•

Communicate the coverage and limitations to policyholders during the inspection;

Adjust all claims in compliance with the SFIP, the NFIP Claims Manual, and any

applicable bulletin issued by FEMA after publication of the NFIP Claims Manual;

o their right.

Customer Service Standards

Be Professional:

FEMA expects that claims professionals:

•

Know the unique reporting requirements of the NFIP;

•

Communicate the coverage and limitations to policyholders during the inspection;

Adjust all claims in compliance with the SFIP, the NFIP Claims Manual, and any

applicable bulletin issued by FEMA after publication of the NFIP Claims Manual;

Guide for Adjusting Property Claims

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Page 26

•

Help the policyholder document their loss as completely and accurately as

reasonably possible;

•

Respond promptly to all inquiries, be available to answer questions, update the

policyholder about the status of their claim, and present clear and correct

information about their claim;

•

Include all allowances payable in the policy in the estimate. NFIP coverage differs

from other insurance policies; therefore, claims professionals may need to spend

additional time addressing differences with the policyholder;

•

Explain coverage early in the claim process in a clear manner. For example, post-

FIRM elevated building and basement coverage can confuse the policyholder and

require additional explanation;

•

Set reasonable expectations with the policyholder and ensure that they understand

what is required to complete the adjustment of their claim; and

•

Be considerate of the policyholder’s time, keep appointments, and honor their

commitments.

Be Prepared

FEMA expects claims professionals to:

•

Have their resources on hand and understand all three SFIP forms (Dwelling,

General Property, and Residential Condominium Building Association Policy

(RCBAP). Policies written under a Group Flood Insurance Policy (GFIP), a policy

coverage for all individuals named by a state as recipients under section 408 of

the Robert T. Stafford Disaster Relief and Emergency Assistance Act (P.L. 93-288

§ 408, 42 U.S.C. § 5174), will only be assigned to adjusters by NFIP Direct

ng,

General Property, and Residential Condominium Building Association Policy

(RCBAP). Policies written under a Group Flood Insurance Policy (GFIP), a policy

coverage for all individuals named by a state as recipients under section 408 of

the Robert T. Stafford Disaster Relief and Emergency Assistance Act (P.L. 93-288

§ 408, 42 U.S.C. § 5174), will only be assigned to adjusters by NFIP Direct. All

claims professionals must have a good command of the SFIP and its application

of coverages so they can successfully support the policyholder;

•

Ensure adjusting software is calibrated correctly for the geographic area where the

loss occurred and that it accounts for post-disaster and property- specific issues;

•

Offer an advance payment to the policyholder with an eligible claim and always

check for new guidance on advance payments; and,

•

Know when to engage outside professional services on adjustments and, when

necessary, seek the appropriate authorization in a timely manner.

Be Compassionate

FEMA expects:

• Claims professionals must remember that the flood loss may create a traumatic

experience and response by the policyholder. Claims professionals often work with

people under stress and should recognize this and create a positive policyholder

claims experience.

• Claims professionals should be flexible based on the circumstances affecting the

policyholder. This may mean making reasonable changes to accommodate the

needs of the policyholder when it comes to inspecting the loss, discussing the

claim, and returning phone calls and emails.

k with

people under stress and should recognize this and create a positive policyholder

claims experience.

• Claims professionals should be flexible based on the circumstances affecting the

policyholder. This may mean making reasonable changes to accommodate the

needs of the policyholder when it comes to inspecting the loss, discussing the

claim, and returning phone calls and emails.

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NFIP Adjuster Participation

In addition to the expectations set out in the prior section, FEMA knows that adjusters are

the face of the NFIP to our policyholders. Adjusters will likely be the first, and perhaps the

only, NFIP representative a policyholder meets after a flood. The NFIP depends on the

adjusters’ expertise and compassion to help our policyholders recover from what may be

a devastating experience for them.

The adjuster collaborates with the claims examiner to guide a policyholder through the

NFIP claims process.

Role of the Adjuster

FEMA expects every adjuster handling NFIP flood losses:

•

Adjusters do not have the authority to accept or deny coverage on behalf of the

NFIP. This remains the responsibility of the Write Your Own (WYO) company or

NFIP Direct. Adjusters are authorized to explain the policy to the policyholder and

make recommendations to the insurer;

•

To communicate to the policyholder that the adjuster does not have the authority

to approve or deny a claim;

•

To understand that all adjustments are only recommendations subject to review by

the NFIP insurer;

•

To adjust all claims in compliance with the SFIP, the NFIP Claims Manual, and any

applicable bulletin issued by FEMA after publication of the NFIP Claims Manual;

•

To review and explain the building estimates and proactively assist policyholders

with the contents claim and proof of loss; and

•

To help the policyholder to document their loss as completely and accurately as

reasonably possible

adjust all claims in compliance with the SFIP, the NFIP Claims Manual, and any

applicable bulletin issued by FEMA after publication of the NFIP Claims Manual;

•

To review and explain the building estimates and proactively assist policyholders

with the contents claim and proof of loss; and

•

To help the policyholder to document their loss as completely and accurately as

reasonably possible.

Adjusters must adhere to the WYO company’s reporting procedures and guidelines for

whom they received loss assignments and forward any questions requiring clarification

through the WYO company’s internal chain of command.

NFIP Knowledge

FEMA expects every adjuster handling NFIP flood losses to follow the guidance provided

in the NFIP Claims Manual and be knowledgeable of the provisions, exclusions and

restrictions of the SFIPs. If additional guidance is needed the adjuster should ask whether

an NFIP bulletin was published providing policy and claim clarifications issued after the

NFIP

Claims

Manual

publication.

NFIP

Bulletins

are

located

https://nfipservices.floodsmart.gov, under the Industry Resources link.

Note: FEMA recommends that adjusters and claims examiner subscribe to the WYO

Clearinghouse

Bulletin

Subscription

distribution

list

located

NFIPWYOMailbox@fema.dhs.gov. “Subscribe” is down at this time while the agency

complies with the dictates of the Presidential administration.

Required NFIP Adjuster Registration for Independent Adjusters

In order to adjust flood losses for the NFIP, independent adjusters must (1) register with

the NFIP and (2) possess an active Flood Control Number (FCN). To receive an FCN, an

independent adjuster must possess the requisite qualifications and attend and

successfully complete an annual NFIP claims presentation. This webinar provides six

ired NFIP Adjuster Registration for Independent Adjusters

In order to adjust flood losses for the NFIP, independent adjusters must (1) register with

the NFIP and (2) possess an active Flood Control Number (FCN). To receive an FCN, an

independent adjuster must possess the requisite qualifications and attend and

successfully complete an annual NFIP claims presentation. This webinar provides six

Guide for Adjusting Property Claims

in California After a Major Disaster – January 9, 2025

Page 28

hours continuing education credit hours in the state of California, 2025 NFIP Claims

Adjuster Presentation. These claims presentations keep the adjusting community current

on NFIP claims procedures and guidance.

Adjuster Qualifications

The NFIP requires independent adjusters to possess certain qualifications to adjust

different property types. FEMA will verify these credentials prior to issuing an FCN to an

adjuster. Adjusters may only perform flood claim inspections in the categories displayed

on their FCN cards. The following table details what types of properties an adjuster can

adjust for a given level of expertise.

Adjuster Qualifications:

Property Type

Residential and Manufactured (Mobile) Home Losses

Registration Requirements:

•

Have at least four years of full-time property loss adjusting experience.

•

Be capable of preparing an accurate scope of damage and dollar estimate to

$50,000 for manufactured homes and travel trailers and $250,000 for residential

losses.

•

Attend the annual NFIP claims presentation.

•

Demonstrate knowledge of the SFIP and NFIP adjustment criteria for all policy

forms.

•

Have knowledge of manufactured home and travel trailer construction and

valuation.

Property Type

Large Commercial and RCBAP Losses

Registration Requirements:

•

Have at least five years of full-time large-loss property adjusting experience.

•

For large commercial losses, be capable of preparing an accurate scope of

damage and dollar estimate of $500,000 or more

a for all policy

forms.

•

Have knowledge of manufactured home and travel trailer construction and

valuation.

Property Type

Large Commercial and RCBAP Losses

Registration Requirements:

•

Have at least five years of full-time large-loss property adjusting experience.

•

For large commercial losses, be capable of preparing an accurate scope of

damage and dollar estimate of $500,000 or more.

•

For RCBAP, be capable of preparing an accurate scope of damage and dollar

estimate of $1,000,000 or more.

•

Provide written recommendations from three insurance company supervisors or

claims management personnel. The recommendations must reflect the adjusting

experience only.

Adjuster Registration Process

The Adjuster Registration Application contains four registration categories. Adjusters may

categories are:

•

Residential

•

Manufactured (Mobile) Home/Travel Trailer

•

Condominium (RCBAP)

Guide for Adjusting Property Claims

in California After a Major Disaster – January 9, 2025

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New applicants and adjusters seeking to add categories to their existing registration must

submit a completed Adjuster Registration Application by email to the NFIP:

Email: NFIPAdjusterMailbox@fema.dhs.gov

Adjusters in active status do not need to submit an application unless required by FEMA,

or if registering to handle claims for a different property type. The NFIP will automatically

renew active adjusters when they attend and successfully complete the annual NFIP

claims adjuster presentation.

FEMA will notify new adjusters and adjusters seeking to add a category to their

classification whether FEMA approves or denies their application. This notification will

occur by email. Adjusters approved or renewed by FEMA will additionally receive their

FCN card via email.

Important: Adjusters who do not attend or successfully complete an annual NFIP claims

presentation become inactive

on.

FEMA will notify new adjusters and adjusters seeking to add a category to their

classification whether FEMA approves or denies their application. This notification will

occur by email. Adjusters approved or renewed by FEMA will additionally receive their

FCN card via email.

Important: Adjusters who do not attend or successfully complete an annual NFIP claims

presentation become inactive. Inactive adjusters cannot adjust flood claims until they

attend an approved NFIP claims presentation and are reactivated by FEMA and will

maintain their original FCN.

Flood Adjuster Capacity in Program (FACP):

FEMA expects that all of its partners will handle NFIP claims consistently with the NFIP

standards and expectations, a consumer-focused quality claim handling experience. The

FACP sets minimum training standards for use by WYO Companies and independent

adjusting firms for the development and training of individuals who wish to handle NFIP

flood claims. To this end, FACP requires there be (1) training, (2) documented adjuster

performance, (3) active supervision, and (4) operational oversight.

Adjusters registered under the FACP must have an active FACP FCN to work flood claims

for FEMA. FACP adjusters may only perform flood claim inspections under the Dwelling

Form.

Through the FACP, the NFIP establishes a pool of registered adjusters for its

stakeholders. The FACP classifies adjusters into levels based on a set of criteria.

The intent of the FACP is to attach a measure of competence at each level, establish

levels of required supervision, and to accommodate the NFIP’s ability to surge based on

the needs of its partners at the time of a disaster. The FACP, by design, encourages the

NFIP Direct, WYO companies, and independent adjusting firms to jointly enhance the

recruitment, training, and professional development of NFIP claims adjusters

to attach a measure of competence at each level, establish

levels of required supervision, and to accommodate the NFIP’s ability to surge based on

the needs of its partners at the time of a disaster. The FACP, by design, encourages the

NFIP Direct, WYO companies, and independent adjusting firms to jointly enhance the

recruitment, training, and professional development of NFIP claims adjusters.

While FACP allows for customization, FEMA expects that all of its partners will handle

NFIP claims consistently with the NFIP standards and expectations, a customer-focused

quality claim handling experience. To this end, FACP requires there be (1) training, (2)

documented adjuster performance, (3) active supervision, and (4) operational oversight.

Guide for Adjusting Property Claims

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Code of Conduct

Individuals handling NFIP claims will maintain the highest standards of honesty,

impartiality, character, and conduct to ensure the proper performance of NFIP business

and the continued trust and confidence of the NFIP policyholders. Adjusters must conduct

themselves with courtesy and integrity, a deep sense of responsibility for policyholder

trust, and promptness in dealing with and serving the policyholder.

Adjusters will display a standard of professional behavior that reflects positively upon and

will be a credit to both themselves and the NFIP.

FEMA does not accept any professional conflict of interest. Any independent adjuster or

adjusting firm who performs work on behalf of the NFIP, or who is registered in the FACP,

may not perform any services, including support, inspections, consulting, or estimating,

for or as a public adjuster (licensed or not) or give representation adverse to the NFIP.

Adjusters also may not adjuster claims for property in which the adjuster or immediate

family member owns an interest, nor can an adjuster accept any money from a third party

to steer business to a specific firm or individual

perform any services, including support, inspections, consulting, or estimating,

for or as a public adjuster (licensed or not) or give representation adverse to the NFIP.

Adjusters also may not adjuster claims for property in which the adjuster or immediate

family member owns an interest, nor can an adjuster accept any money from a third party

to steer business to a specific firm or individual. Adjusters and adjusting firms may not

accept monetary or non-monetary incentives from policyholders. If a conflict is identified,

an adjuster’s registration will be deferred for one year to ensure interests have ended and

will not reoccur. In addition, the use of the FCN for any purpose other than adjusting a

flood insurance claim on behalf of an NFIP insurer is improper and may result in

immediate suspension or revocation of the FCN. FEMA may refer to improper usage of

the FCN to investigators as necessary to protect the integrity of the NFIP.

Complaint Handling

FEMA will investigate all complaints asserting a violation of the Code of Conduct to

confirm the validity of the complaint. WYO companies, NFIP Direct, and adjusting firms

also have an obligation to protect the integrity of the NFIP. When a WYO company, NFIP

Direct, or adjusting firm becomes aware of a violation, they must conduct an internal

investigation. If a violation is confirmed, they will immediately notify FEMA and provide all

supporting documentation, including their findings and recommendations. If FEMA

determines that there was a violation of the NFIP’s Code of Conduct, FEMA will act to

revoke the FCN for a period necessary to remedy the underlying violation, which in no

case will be less than one year from the date the violation ceased.

Documentation can be sent by email to the NFIP:

Email: NFIPAdjusterMailbox@fema.dhs.gov

The Department does not regulate the NFIP. Flood insurance is a federal program

at there was a violation of the NFIP’s Code of Conduct, FEMA will act to

revoke the FCN for a period necessary to remedy the underlying violation, which in no

case will be less than one year from the date the violation ceased.

Documentation can be sent by email to the NFIP:

Email: NFIPAdjusterMailbox@fema.dhs.gov

The Department does not regulate the NFIP. Flood insurance is a federal program.

For information on adjuster participation in the National Flood Insurance Program, please

review the following link: https://nfipservices.floodsmart.gov/

This is a copy of a public record, reproduced as it was published. It is not legal advice, and it may not be the version a court would rely on. Check the official source before you cite it.