Florida insurance regulations make the following applicable to all adjusters, public insurance adjusters, and public adjuster apprentices:

Code of Ethics. The work of adjusting insurance claims engages the public trust. An adjuster shall put the duty for fair and honest treatment of the claimant above the adjuster’s own interests in every instance.1

I have read these two sentences hundreds of times without carefully studying and contemplating what they mean. When preparing for a virtual class on adjuster ethics, as noted in “Tired of Boring Ethical Education Classes? Do the Ethical Rules For Public Adjusters State That a Public Adjuster Is an Advocate For the Insured? Can Public Adjusters Advertise That They Are Advocates?” I finally made a more careful study of the words and phrases that seem so simple, and yet, mean so much more than I thought at first glance.

The phrase, “The work of adjusting insurance claims engages the public trust,” underscores the significant responsibility that insurance adjusters and the broader insurance industry hold in society. It highlights the crucial role of trust in the relationship between insurance professionals and the insuring public.

Here’s a detailed breakdown of the phrase:

Public Trust: At its core, public trust refers to the confidence that the community places in institutions and professionals to act in a manner that is ethical, fair, and in the public’s best interest. In the context of insurance, it implies that policyholders and the wider public expect insurance companies and their representatives, including public adjusters, to handle claims with integrity, transparency, and fairness.

Alexander Hamilton referred to “public trust” in the Federalist Papers:

The aim of every political constitution is, or ought to be, first to obtain for rulers men who possess most wisdom to discern, and most virtue to pursue, the common good of the society; and in the next place, to take the most effectual precautions for keeping them virtuous whilst they continue to hold their ‘public trust.’

Public trust is a virtuous concept reflecting that actions are not for private gain. Thomas Jefferson wrote, “when a man assumes a public trust, he should consider himself as public property.”2

Adjusting Insurance Claims: This process involves evaluating insurance claims to determine the extent of the insuring company’s liability. Adjusters investigate the claim, assess the damage, determine claim validity, and negotiate settlements. Given that this process directly affects the financial and emotional well-being of policyholders, it is inherently sensitive and requires a high degree of professionalism and ethical conduct.

Engages: The use of the word “engages” in this context suggests active participation and involvement. It indicates that the act of adjusting insurance claims is not just a transaction or a business process but a duty that involves active stewardship of the trust placed by the public in the insurance profession.

Understanding the phrase in its entirety emphasizes the ethical dimensions of insurance claim adjustment. Insurance adjusters are entrusted with a significant amount of power and responsibility. Their decisions have profound impacts on the lives of individuals and businesses making claims. The public expects that adjusters will handle this responsibility with the utmost care, fairness, and transparency, making decisions based on the merits of each case rather than personal gain, corporate profit, or other inappropriate considerations.

Insurance is a unique product because it is based on spreading the risk of loss throughout the public. The phrase serves as a reminder that the insurance industry operates on a foundation of trust for the public. Maintaining this trust requires adherence to ethical standards, transparency in decision-making, and a commitment to treating all parties involved in a claim with fairness and respect. When insurance professionals uphold these values, they reinforce public confidence in the insurance product and the overall insurance industry, of which all adjusters are a part.

What does the sentence, “an adjuster shall put the duty for fair and honest treatment of the claimant above the adjuster’s own interests in every instance,” mean?

Breaking down this sentence into its component parts shows the following:

Fair Treatment: This concept ensures that cases and people are treated impartially, with similar cases treated alike, and that different cases are treated according to their differences, without bias or favoritism towards any party. The concept of fairness includes making a prompt and diligent effort to settle claims, providing timely and clear communication, and avoiding practices that would unfairly delay or deny claims to the detriment of the claimant. It certainly encompasses non-discrimination by treating all groups equally, without systematic disadvantage or preferential treatment.

A fair claims decision cannot be made without a thorough investigation. The adjuster is expected to conduct a comprehensive and fair investigation of the claim, considering all relevant evidence and information to make an informed decision.

Evaluations of facts must be on an objective basis. The adjuster should evaluate the claim based on its merits without allowing external pressures or desired outcomes to influence their judgment.

Honest Treatment: The concept refers to the practice of being truthful, transparent, and sincere in an adjuster’s interactions with the claimant. This concept is not limited to merely stating facts but encompasses a broader commitment to authenticity, fairness, and respect in dealings with the claimant and others during the adjustment process. Honest treatment by an adjuster means that the adjuster must conduct their work with integrity, providing truthful and transparent services to the claimant.

Truthfulness is essential to honesty. It means communicating information accurately and without deception. This includes avoiding lies of omission or any attempts to mislead or manipulate others. It means that adjusters must engage with others in a way that is reflective of their true thoughts and intentions.

Honesty requires transparency. It means that adjusters should openly share relevant information and be clear about their actions, decisions, and motivations. Transparency helps build trust and facilitates informed decision-making by all parties involved with an insurance claim.

Above The Adjuster’s Own Interests: This concept underscores the ethical obligation of insurance adjusters to prioritize the needs and fair treatment of the claimant over any personal or professional self-interests they might have. Adjusters must be vigilant in identifying and managing any conflicts of interest that could compromise their ability to act in the best interest of the claimant. This includes situations where an adjuster might have a financial or personal interest in the outcome of a claim. The adjuster must take steps to mitigate such conflicts or, if necessary, remove themselves from handling the claim.

In Every Instance: The ethical obligation of the insurance adjuster to prioritize the claimant’s interests over their own is not situational or discretionary. Instead, it is an absolute and consistent requirement that must always be upheld, without exception. The phrase “in every instance” underscores the non-negotiable nature of the adjuster’s ethical duty and serves as a reminder that the integrity of the claims process relies on unwavering adherence to these standards. It is a clear directive that the adjuster’s professional responsibilities to the claimant are paramount and must guide all actions and decisions taken during the adjustment of a claim.

The adjuster must apply the same level of ethical conduct in every case they handle, regardless of the circumstances or the parties involved. This standard is not limited to certain types of claims or claimants; it applies to all claimants and all types of insurance claims. The adjuster cannot justify compromising their ethical obligations, even in challenging or complex cases or in the face of company objectives that are not fairly in the claimant’s interests.

The commitment to fair and honest treatment is ongoing and does not lapse at any point during the claims process, from the initial filing to the final resolution. The concept means that these principles apply to every aspect and issue of the claims handling process, including but not limited to investigating, evaluating, negotiating, and settling the claim.

All types of insurance adjusters have serious ethical obligations to claimants and the public. The Institutes has published numerous referenced materials teaching these ethical concepts. It is a significant and important calling to be an insurance adjuster and not one that should be lightly taken for granted.

I often say, “It is hard to be a great and ethical insurance adjuster.” There is so much to learn, and the field is constantly changing, requiring constant education. Professional and personal motivations placed on adjusters by others make it a very difficult job to ethically conduct oneself. I have a great deal of respect for those dedicating themselves to being the best at this profession.

Thought For The Day

Insurance is, by definition, a business of the utmost good faith. This means that both parties to the contract of insurance must act fairly and in good faith to each other and do nothing that will deprive the other of the benefits the contract of insurance promised.

Without the covenant of good faith and fair dealing and ethical people who work in the insurance industry applying and fulfilling the covenant, insurance is impossible. One cannot act fairly and in good faith without being a person with a well-formed ethical compass.

—Barry Zalma

1 Rule 69B-220.201, Fla. Admin. Code. Ethical Requirements for All Adjusters and Public Adjuster Apprentices.

2 “Thomas Jefferson 1743–1826 American Democratic Republican statesman, 3rd President 1801–9”. Oxford Essential Quotations.