Merlin Law Group attorney Jason Cieri received a call from a public adjuster inquiring whether Alabama licenses public adjusting and if it is illegal to represent policyholders in Alabama. The answer is that public adjusting is not licensed in Alabama and doing what most public adjusters do could be considered the unauthorized practice of law.
Merlin Law Group Alabama licensed attorney Ashley Harris noted in Public Adjusters Licensed in Alabama: Not This Year, that a prior attempt for licensing in 2016 failed:
In April I advised that Representative Jimmy Martin introduced Alabama House Bill 181 on February 11, 2016, for the regulation of public adjusters in Alabama.
The Bill was later ‘indefinitely postponed’ and the legislative session concluded May 16, 2016.
Thus, Alabama will not be licensing public adjusters this year.
In an article following the 2012 tornadoes that swept through Alabama, it was obviously warned by the Alabama Bar that public adjusting was illegal and those conspiring to help public adjusters could also be held in criminal jeopardy:
The Alabama bar association on May 9 issued a statement that said any third party who negotiated with an insurance company on behalf of a policyholder was committing a misdemeanor.
‘Alabama does not license claims adjusters so any claims settled by such third-party recovery firms are considered to be the unauthorized practice of law, which is subject to criminal prosecution,’ the statement said. ‘Anyone assisting third-party adjusters attempting to settle claims on behalf of claimants could also be charged with aiding and abetting in this illegal activity.’
Tony McLain, the bar’s general counsel, said that even giving advice on how to negotiate with an insurance company could be a crime. ‘If they’re giving you legal advice, that’s practice of law,’ he said.
Does this stop all public adjusters from advertising and doing adjusting work in Alabama? No. I found a number of public adjusting firms advertising to illegally perform work in Alabama. I suggest those doing so stop or you may find you will lose your license in all states. All the Alabama Insurance Commissioner, Alabama Bar or unfriendly insurance company adjuster has to do is report you conducting illegal activity in Alabama to any state you are licensed, and your license could be in jeopardy everywhere.
Here is an example of such an advertisement:
The most experienced and professional expert Alabama Public Adjusters / Private Adjusters in the State of Alabama. As your Alabama Public Adjuster you may rest assured that National Adjusters, Inc. are the top experts at getting homeowners & commercial business owners the largest possible property claim settlements. Also as your Alabama Public Adjuster / Private Adjuster you will have the most experienced and well versed public adjusters in the entire State. When it comes to maximizing your insurance claim settlements, having the best Alabama Public Adjuster will get you the largest insurance settlement. We will not take a penny up front and will guarantee that if you don’t get paid we will not charge for my services and we will not charge you for any out of pocket fees for our Alabama Public Adjusting Service either.
So, please do not illegally practice law in Alabama. Being and calling yourself a “consultant” is not going to get you out of jail either if what you are doing is illegal public adjusting. As I told a public adjuster yesterday, ‘I am sorry that some state laws are horrible for you and not allowing you to do what you normally do in most states. But when you ask me, I have to report what I find and warn you—-even if you do not like to hear it.’
Thought For The Day
Commitment to the rule of law provides a basic assurance that people can know what to expect whether what they do is popular or unpopular at the time.
—Sandra Day O’Connor