What Is a Public Adjuster Bond?
If you are running a public insurance adjuster business, many states will require you to get licensed and obtain a public adjuster bond. There is no nationwide bond requirement, so the bond amount is set individually for each state.
The purpose of the public adjuster bond is to protect the state you operate in, and its citizens, from any unlawful actions your company might engage in. Having obtained a bond is a powerful sign to your customers that you are safe to do business with.
Similarly to all other surety bonds, your public adjuster bond works as a three-party contractual agreement. Your public adjuster company is the principal that needs to post the bond. The obligee is the state authority that requires you to get bonded, and the surety is the bond provider.
What happens if you fail to comply with state regulations governing your trade? Your public adjuster business can face a claim. If the bond claim is proven, there can be serious consequences. You can read more about them in the Questions section below.
Questions about Public Adjuster Bond
Who needs to obtain a public adjuster bond?
Public insurance adjusters often need to post a public adjuster bond, so that they can get their public adjuster license. As they need to faithfully represent the interests of their clients, it is of utmost importance that adjusters act in line with the law. Getting bonded is a guarantee of their high professional standards.
In essence, a public adjuster is hired by a policyholder for negotiating an insurance claim. Besides an attorney, and the original insurance broker, a public adjuster is the only other party that can legally represent a claimant in such cases.
Not all states across the U.S. require public adjusters to obtain a bond. Before you start your licensing process, make sure to check with your local authorities for the exact requirements in your location.
How much does a public adjuster bond cost?
As there is no unified bond amount required from public adjusters in the country, your public adjuster bond cost will depend on the specific requirements in your state. Your bond price is a percentage of the total bond amount, and is set based on your credit score and finances.
The required bond amount varies from state to state. In New York, it’s $1,000, while in California, it’s $20,000. In Florida, you need to post a $50,000 public adjuster bond. Your local licensing authority will provide you with the exact bond amount that you have to obtain.
The bond amount that you are asked to post is different from your bond premium. Thus, you don’t need to pay the whole amount, but only a percentage of it. For example, in cases where the applicant has good credit, they’ll typically need to pay between 1% and 3% of the bond amount. So for a $20,000 bond, this means your premium is likely to be in the range of $200-$600.
How is your bond premium decided? When you apply with your surety, it needs to take a close look at your financial situation. Your personal credit score is of utmost importance, but your business finances, assets and liquidity, as well as your experience in the industry are also factors. Your bond premium will be lower if your overall finances are strong. This means you pose a lower risk as a bond applicant.
Our surety bond cost guide can give you a thorough overview of how your public adjuster bond price is determined.
|Surety Bond Cost Based on Credit Score|
|Surety Bond Name||Surety bond amount||Above 700||Between 650-699||Between 600-649||Below 599|
|New York and Ohio Public Adjuster Bond||$1,000||$100-$150||$100-$150||$100-$175||$150-$200|
|Georgia Public Adjuster Bond||$5,000||$100-$150||$100-$150||$150-$250||$250-$375|
|Hawaii, New Jersey, New Mexico, Texas and Minnesota Public Adjuster Bond||$10,000||$100-$150||$100-$300||$250-$500||$500-$750|
|California, Colorado, D.C., Idaho, Iowa, Pennsylvania and North Carolina Public Adjuster Bond||$20,000||$150-$300||$200-$600||$500-$1,000||$1,000-$2,000|
|Oklahoma Public Adjuster Bond||$25,000||$188-$375||$250-$750||$625-$1,250||$1,250-$2,500|
|Florida, Mississippi, Tennessee and Louisiana Public Adjuster Bond||$50,000||$375-$750||$500-$1,500||$1,250-$2,500||$2,500-$5,000|
Can I get a public adjuster bond with bad credit?
Struggling with problematic finances is tough. Here at Lance Surety Bonds, we know how difficult it can be to get bonded with bad credit. That’s why we operate our Bad Credit Surety Bonds program. It’s here to help public adjusters with low credit scores, tax liens, bankruptcies, or civil judgements to get the public adjuster bond they need for their insurance adjuster license.
Bad credit bonding premiums are typically in the range of 4%-7.5%. The higher price compensates for the increased risk to the surety provider. Still, we guarantee you top bonding rates, whatever your credit score is. Because of our excellent relationships with numerous A-rated, T-listed surety companies, we can shop around for a bond to match your exact circumstances.
How do I get my public adjuster bond?
You can start the process of obtaining your public adjuster bond with Lance Surety Bonds today. Apply online by using the application form and attach all needed documents. Your free, no-obligations bond quote will be sent to you in no time.
Need more information about how bonding works? Make sure to check out our How to Get Bonded page.
Call us at (877) 514-5146 for any additional questions or issues you have. Our bonding experts can also help you with your application process.
How are bond claims handled for public adjusters?
Unlike insurance, public adjuster bonds are not a protection for your business. Instead, they are required to guarantee that your clients’ interests will be safeguarded. Bonds act as a safety net in case adjusters’ services are not provided honestly, or in compliance with the law.
In case you transgress your legal obligations, an affected party can file a claim against your bond. If the claim is proven, your public adjuster company can suffer serious damages. Your surety will reimburse the claimant at first– up to the penal sum of your bond. Afterwards, however, you need to repay all costs.
Claims don’t just harm your finances. It can be difficult to get bonded after a proven claim, and it will certainly cause problems with your business’s reputation. That’s why the wisest course of action is to avoid claims.