During the 2021 legislative session, SHB 1037 (PDF, 84.41 KB) was passed and signed by the governor. This legislation affects licensed insurance adjusters in Washington state in the following ways:
Changes to definition of an "adjuster"
SHB 1037 changed the definition of an "adjuster" in sections 1 and 3 of the bill. This affects who is required to be licensed in order to adjust property and casualty (P&C) claims in Washington state. This change is effective as of July 25, 2021.
Who is an insurance adjuster?
Any person who negotiates an insurance settlement or any person that applies the facts of the loss to the policy provisions. If any person does either of these, they are an insurance professional that is required to be licensed through the Office of the Insurance Commissioner.
What does negotiating an insurance claim mean?
Loss settlement conditions are set within the insurance policy. Only the insured, claimant, licensed adjusters, insurance company staff, and attorneys are allowed to partake in discussions on how the loss settlement conditions in the policy are to be administered.
What does applying the facts of the loss to the policy provisions mean?
There are many conditions, provisions, and clauses that specify how the insurance policy reacts to an insurance claim. Only the insured, claimant, licensed adjusters, insurance company staff, and attorneys are allowed to partake in discussions on how the facts of the loss effect the conditions, provisions, and clauses within the insurance policy the claim was opened under.
If a repair contractor or repair shop simply provides an estimate of damage, do they need an adjuster’s license?
No, they do not need an adjuster’s license. However, if the repair contractor or repair shop ventures away from estimating the damage and into discussions of how the insurance policy settles the claim, or how certain coverages and policy provisions should be applied, then they will be conducting the business of insurance and will need to be licensed.
If an engineer, certified hygienist, or similar type of professional simply provides repair protocols, do they need an adjuster’s license?
No, they do not need an adjuster’s license. However, if the engineer, certified hygienist, or similar type of professional ventures away from providing repair protocols and into discussions of how the insurance policy settles the claim, or how certain coverages and policy provisions should be applied, then they will be conducting the business of insurance and will need to be licensed.
May repair contractors, repair shops, engineers, certified hygienist, and other similar types of professionals update and resubmit their estimates of damage or repair protocols and not need to have an adjuster license?
Repair contractors, repair shops, engineers, certified hygienist, and other similar types of professionals may update and resubmit their estimates of damage or repair protocols and NOT need to be a licensed adjuster. However if any person attempts to partake in discussions on how the loss settlement conditions in the policy are to be administered or in discussions on how the facts of the loss effect the conditions, provisions, and clauses within the insurance policy, then they are conducting the business of insurance and will need to be licensed.
If the appraisal clause is invoked in the insurance policy, do the appraisers and umpire need to have an adjuster’s license?
No, as long as they are functioning within the parameters of the appraisal clause as set in the policy. However, if the appraisers or umpire ventures outside of the parameters of the appraisal clause to determine the amount of loss, then they may be conducting the business of insurance and may need to be licensed.
If an insured authorizes a direct payment of insurance proceeds to a repair contractor or repair shop, does the repair contractor or repair shop need an adjuster license?
No, the repair contractor or repair shop is not negotiating an insurance claim when an insured authorizes a direct payment to them.
Emergency adjuster registration
This new legislation affecting adjusters (in section 4 of the bill) created a no-cost emergency adjuster registration for non-resident independent adjusters who will be handling P&C claims in Washington after the governor has declared an emergency or disaster. All independent adjusters who are not licensed in Washington state will be required to register using a form if they will be working claims in the state following the governor's emergency or disaster declaration.
The form may only be completed once the disaster has been declared and the declaration made public. Please note, this is not a one-time registration. The emergency adjuster registration form must be completed for each declared disaster.
It's important to note that all resident adjusters must be licensed, regardless of whether a disaster has been declared by the governor. This goes into effect July 25, 2021.
Continuing education (CE) requirements for all resident adjusters
A continuing education requirement for all resident adjusters was added as part of SHB 1037 (see section 2 of the bill). All adjusters (independent, public and crop) who are licensed as a resident of this state or who have declared Washington as their designated home state will be required to complete 24 hours of CE, including 3 hours of ethics training. This must be completed during each license renewal period of two years.
Continuing education providers are encouraged to submit courses suitable for adjusters (P&C policy coverage, claims adjusting, etc.) for approval immediately.
Resident adjusters are highly encouraged to complete CE hours pertinent to their profession.
The CE requirement will go into effect July 1, 2022. Resident adjusters whose license renewal is July 31, 2022, will be the first to be required to meet this new requirement, as well as all resident adjuster licensees after July 2022.