Massachusetts has just made an important statement about fairness in the property insurance claims process. An insurance company cannot condition payment of a property claim on the policyholder agreeing not to hire a public insurance adjuster. The legislation becomes effective November 5, 2026.
For public adjusters, policyholders, insurance companies, agents, brokers, and lawyers handling Massachusetts property claims, this is a significant law. It deserves careful reading because it does considerably more than simply express support for the public adjusting profession. It makes it unlawful for an insurer covered by the statute, including non-admitted and surplus lines insurers, to place language in a property and casualty policy prohibiting an insured from hiring, retaining, engaging, utilizing, consulting, or contracting with a public insurance adjuster as a condition of recovery.
The offending policy language is declared unenforceable and is to be excised from the insurance policy while the remainder of the policy stays intact. In Massachusetts, an insurer cannot take away the policyholder’s right to hire a public adjuster and then threaten the policyholder’s coverage for doing so. This applies to homeowners and commercial property claims. The definition specifically refers to representation involving losses under fire insurance policies, homeowners policies, commercial multi-peril policies, business interruption policies, fidelity bonds or crime policies, inland or ocean marine policies, and “other property damage insurance coverage of any sort.”
The Legislature expressly included non-admitted and surplus lines insurers. The growth of the excess and surplus lines marketplace has created an environment in which policy forms may contain provisions rarely found in standard admitted-market forms. Anti-public-adjuster endorsements have been one example. Massachusetts has now told the surplus lines market that flexibility in policy drafting does not extend to conditioning recovery on the insured’s surrender of the right to hire a public adjuster.
The Legislature did something else that should get the attention of claims executives. The new law amends Chapter 176D, Massachusetts’ unfair insurance practices statute. A policy provision prohibiting an insured from hiring a public adjuster is added to the statutory list of unfair claim settlement practices. The Legislature could have stopped after declaring the endorsement unenforceable. Instead, it placed this practice into the statutory framework governing unfair insurance claims conduct. The message seems fairly clear. Massachusetts does not regard these provisions merely as unfortunate contract drafting. It regards them as inconsistent with proper insurance claims practices.
The Pending Velocity Lawsuit Just Became More Interesting
Readers of this blog know that I have been following lawsuits involving anti-public-adjuster endorsements. In May, I wrote The Insurance Industry’s New Playbook: “Hire a Public Adjuster, and You May Lose Coverage,” discussing Swerling Milton Winnick Public Insurance Adjusters, Inc. v. Velocity Risk Underwriters, LLC, 1 pending in federal court in Massachusetts. That lawsuit arose from a fire at the Aquidneck Country Club in Rhode Island. The policy contained an endorsement stating that the insured could not hire, engage, retain, contract with, or otherwise utilize the services of a public adjuster.
Velocity has moved to dismiss the Massachusetts lawsuit. Among other things, it argues that the Massachusetts court lacks personal jurisdiction and that Massachusetts consumer protection law should not govern a dispute involving a Rhode Island insured, Rhode Island property, and a Rhode Island fire.
Chapter 187 does not magically resolve those issues. The Aquidneck loss did not occur in Massachusetts. The insured is not a Massachusetts policyholder simply because the public adjusting firm seeking the work is based in Massachusetts. Nor do I believe that obtaining a Massachusetts public adjuster license gives the license holder a nationwide statutory right to invoke Massachusetts law on every loss outside the Commonwealth.
Chapter 187 regulates insurance policy provisions within Massachusetts’ legitimate regulatory reach. It does not turn a Massachusetts public adjuster license into a national passport overriding the insurance and licensing laws of Rhode Island, New York, Florida, or any other state. Chapter 176D itself reinforces this caution because its prohibition concerns unfair insurance trade practices engaged in “this commonwealth.”
Still, the new law could become very important to the Velocity case. Before Chapter 187, one of insurers’ arguments was essentially that no Massachusetts statute expressly prohibited an anti-public-adjuster endorsement. That proposition has now been legislatively eliminated going forward.
The harder issues are whether the new law can directly govern a policy issued before its November 5 effective date, whether it can affect an ongoing claim arising before that date, and whether Massachusetts law can govern this particular Rhode Island insurance transaction at all. Those are very different questions from whether Massachusetts presently has a public policy concerning anti-public-adjuster endorsements.
Texas Got There First
Massachusetts is also not the first significant state to prohibit this practice. Texas Insurance Code Section 4102.007 protects an insured’s right to contract with a licensed public insurance adjuster and prohibits applicable insurance policies from containing provisions barring that relationship.
Texas expressly applies its statute to both commercial and residential property policies. It expressly reaches capital stock insurers, mutual insurers, county mutual insurers, Lloyd’s plans, reciprocal and interinsurance exchanges, farm mutual insurers, and eligible surplus lines insurers where Texas is the insured’s home state.
Texas also did something Massachusetts did not do. Texas expressly provided that its law applies only to policies delivered, issued for delivery, or renewed on or after January 1, 2024. Massachusetts did not include comparable language saying Chapter 187 applies only to policies “issued or renewed on or after November 5, 2026.” Instead, Massachusetts says the prohibited language “shall be unenforceable” and “shall be excised” from the policy.
Whether that difference means Massachusetts intended the prohibition to affect existing policies after November 5 is a question I expect lawyers will debate. Massachusetts law generally disfavors retroactive application of substantive legislation without sufficiently clear legislative direction. There is nevertheless a meaningful distinction between changing what happened before the effective date and prohibiting an insurer from enforcing an offending provision after the effective date.
Policyholders and public adjusters with older policies should obtain legal advice rather than assuming the answer.
The Practical Bottom Line
For Massachusetts property claims governed by Massachusetts law, the direction is now clear. Insurers should not be issuing policies containing anti-public-adjuster endorsements after the law becomes effective. Public adjusters should review policies carefully and identify any prohibited language. Policyholders should not assume that an endorsement saying they cannot hire a public adjuster is enforceable merely because it appears in the policy.
The larger public policy judgment could hardly be clearer. Insurance companies employ professional adjusters. They retain engineers, accountants, consultants, contractors, coverage counsel, and armies of other professionals to protect their interests during significant claims.
Why should the policyholder be contractually required to stand alone? Massachusetts has now answered that question. The policyholder gets to hire help too.
Thought For The Day
“Its principles have guided our footsteps in times of crisis as well as in times of calm.”
—John F. Kennedy, speaking about Massachusetts in his “City Upon a Hill” address
1 Swerling Milton Winnick Public Insurance Adjusters, Inc. v. Velocity Risk Underwriters, LLC, No. 1:26-cv-12095 (D. Mass. 2026).
