(Chip’s Note: From time to time, someone makes a career decision that says more about values than ambition, and those are the choices worth honoring. Today’s guest blog author, Mark Dillman, is one of those people.
Mark was a talented and rising attorney in our San Francisco office. There is no doubt he was on a path toward a very successful and lucrative legal career. He was smart, disciplined, and deeply committed to policyholder advocacy. We valued his work, his judgment, and his integrity. Quite frankly, we hated to see him go.
But Mark made a decision that deserves admiration rather than regret. He chose to return home by rejoining his family’s public adjusting practice, Dillman & Dillman, LLC, alongside his brother and father. It was not a step away from representing policyholders. Instead, it was a step closer to the front lines. Public adjusting is where many claims are first fought, where trust is built face-to-face, and where families and businesses often need their strongest advocate the most.
That choice took courage. Mark walked away from a clearly defined and promising legal career to continue a family legacy rooted in service, expertise, and independence. He did so not because the law was unfulfilling, but because the calling to help policyholders in a more immediate and personal way was stronger.
We remain proud to call Mark a colleague, a friend, and a fellow policyholder advocate. His legal training, combined with the practical wisdom of a family practice built over years of experience, puts him in a unique position to elevate the profession of public adjusting and serve clients with uncommon depth and care.
It is fitting that Mark’s contribution here focuses on Connecticut public adjuster contract law. This is a topic where precision, ethics, and consumer protection matter greatly).
Back in early September, Chip published a blog post titled, “Public Adjuster Fees Require Contract Compliance.” The blog stemmed from a concerning court ruling in my home state, Connecticut. 1 It was published on the heels of a fantastic trip out to Northern California for United Policyholders’ annual UP to Good fundraiser, which I recommend all industry professionals attend and/or support.
To take full advantage of the short trip to the West Coast, I had the pleasure of spending a day wine tasting with my team. Admittedly, I do not have a sophisticated wine palate and was in over my head, but something the vintner said really stood out to me – what you taste in the wine is largely based on your perception, your previous experiences, and your expectations of what the smell and texture should taste like. In short, two people drinking wine from the same barrel at the same time could have two different, valid perceptions.
Regarding the takeaways from reading Chip’s September blog, I felt like the lesson at the vineyard held true. The same case, viewed from different vantage points, yielded two distinct key lessons, both with merit. I wholeheartedly agree with Chip’s takeaway – be vigilant in confirming contracts are in compliance with regulations, legislation, and common law alike, but I will posit that this was not the primary issue in this case. The court had a seemingly “clear reading” of the law regarding fees in direct conflict with the industry’s “clear reading” and expectations. This begs the question: How do public adjusters stay compliant when the legal scheme setting the rules conflicts?
To reiterate a brief overview, in November 2024, a Connecticut Superior Court decided what began as a simple fee dispute between a public adjusting firm and an insured property owner, Marc Gottesdiener. A breach of contract action was filed following non-payment of fees. As Chip correctly notes, what looked like a straightforward fee-collection case quickly turned into a far more significant ruling for the entire public adjusting profession in Connecticut.
The Industry Issue – A Perverse Outcome
The court itself raised the issue of “whether the fee provision of the [public adjuster] Contract is valid in the first place.” The issue was seemingly not fully briefed by the parties to the action, which may have left blind spots in the court’s analysis. The court found that “the ostensibly controlling regulations have long been outdated by statutory amendment” and that the statute “has been entirely ignored by both the Insurance Commissioner and the public adjuster industry for twelve years and counting.” The Statutory language interpreted by the court read as follows:
Any fee charged to an insured by a public adjuster shall be based only on the amount of the insurance settlement proceeds actually received by the insured and shall be collected by such public adjuster after the insured has received such proceeds from the insurer. 2
Specifically, the court opined that while old regulations allowed adjusters to charge up to 10% of the insured’s “loss” (measured at the gross settlement amount, confirmed by a 2003 ruling), the legislature amended Connecticut law in 2012 to say that fees must be based “only on the proceeds actually received by the insured” and may be collected “only after the insured has received those proceeds.” The court provided an example to illustrate the outcome of its literal reading and application of the controlling statutory language in “conflict” with the regulations, summarized as follows:
If an insured suffers a $100,000 loss on a dwelling with a $50,000 mortgage and signs a contract with a public adjuster for 10%, the public adjuster is entitled to a fee of only $5,000, as the insured’s actual receipts are only $50,000 since the other half went to the mortgage company. Further, the Public Adjuster cannot take its fee directly from the proceeds, but only after the insured has received such proceeds from the insurer themselves.
In a short oversimplification, the court held that public adjusters were only entitled to funds actually deposited into the insured’s bank account, and only after they were deposited, regardless of whether the funds were paid to the benefit of the insured (i.e., to a mortgagee).
Select Connecticut carriers took note of this holding and immediately relied on it to justify their position that public adjusters will not be named on claim checks, regardless of whether a state-approved contract was on file, since fees may only be collected after the insured receives the payment.
This interpretation is clearly contrary to industry and historical practice in Connecticut, the legislative intent of the 2012 statute, and would impair the ability of over 60% of dwelling owners who have a mortgage to immediately access professional representation for a property claim, should they need it. An outcome like this requires remedial action. While it was the court’s ruling that brought out this contrary outcome, an ambiguous reading of allegedly conflicting regulatory and legislative schemes is less likely to happen with clear statutory and regulatory language. Clear statutory language can only be expected if the public adjuster industry works with our lawmakers and regulators to inform the drafters of the rules that shape our industry. This emphasizes the need to get involved with and support local public adjuster trade associations.
CAPIA’s Response and The Statutory Update: Public Act 25-106 (2025)
I am extremely fortunate to have the privilege of serving and learning from a knowledgeable and caring executive board, counsel, and membership at our local professional association. Following the court’s holding, the Connecticut Association of Public Insurance Adjusters (“CAPIA”) worked directly with the Connecticut Insurance Department and Connecticut Legislature, specifically the Insurance and Real Estate Committee Chairs, to clarify the language of Conn. Gen. Stat. § 38a-726 (b) to conform the statute to current practice and intent. CAPIA provided written and oral testimony to highlight the importance of redrafting just a few key words in the codified language that the court interpreted. The bill language was drafted, proposed, and signed into law in the same 2025 session. The language was updated to read:
Any fee charged to an insured by a public adjuster shall be based only on the amount of the insurance settlement proceeds actually paid by the insurer on the account of a loss and shall be collected by such public adjuster after the insurer has paid such settlement proceeds.3
The clarification to the wording of the law reinforces that:
- Fees are calculated on the actual settlement proceeds paid by the insurer on the loss, not only on the funds the insured received directly (i.e., inclusive of those funds a mortgagee is named on).
- The legislative intent of the 2012 statute was to prohibit adjusters from taking fees not “actually received” by insureds, meaning, funds not actually paid out to the benefit of an insured by a carrier (such as taking a fee on a hurricane deductible or recoverable depreciation not issued). 4
- The update to the statute has no impact on public adjusters being named on proceeds checks.
- The intent of the 1992 Regulation and 2012 Statute were complimentary, not conflicting; and
- The consumer protection in Section (A) of the statute remains unchanged: that public adjusters cannot charge or collect a fee if the insurer offers full policy limits within 30 days of the loss.
To again echo Chip, in The Public’s Adjuster case, neither side nor the industry at large seemed to have noticed that the statutory change in 2012 could leave the door open to an ultra-literal and peculiar interpretation, one which had the potential to leave a gaping hole for any insured with a mortgage encumbered property to hire a public adjuster, as compensation for services would, at best, be unknown.
We have seen feedback that the statute still does not go far enough to clarify the commission rule. To shed some light on why the proposed language was changing a mere handful of words, I’ll offer that less than 10% of bills raised during this last legislative session passed. It was CAPIA’s position that timely closure of this gap, with limited clarifying language, increased our chances of unanimous support from committees and houses alike. There is always more that can be done by way of consumer protections, and CAPIA would like to thank the CID and the Insurance and Real Estate Committee for their work on this issue.
Lessons for Public Adjusters
As we sipped our last wine during the tasting in Napa Valley, some folks tasted blackberry, others cherry, but in the end, we all agreed it was delicious. Revisiting the same case, I agree with all of Chip’s lessons re-pasted below, and hope he will agree with my addition:
- Review your contracts annually. Laws evolve, and contracts must evolve with them.
- Align with statutes, not just regulations. When statutes and regulations conflict, the statute controls. Be aware of ambiguities that can be interpreted as conflicting language.
- Understand collection methods and limits. Some states restrict not just how much you can charge, but also when and from whom you may collect.
- Seek legal review. Have a knowledgeable attorney review your engagement agreements to ensure compliance in the state where you operate. I will second the recommendation for Holly Soffer. She specializes in this type of legal practice nationwide and regularly engages with insurance commissioners and regulators on public adjuster licensing and contracts.
- Bring Industry Issues to Your Local Trade Association. Trade associations allow adjusters to band together and pool resources to address issues protecting policyholders and the adjusting industry alike. Get involved and contribute to your association to help prevent bad law from slipping through the cracks.
Thank you to MLG for the opportunity to write about this issue. And to all industry professionals, please consider getting involved with and contributing to your local associations. When ambiguities arise with regulations or statutes impacting consumer rights or our industry, industry professionals are ultimately responsible for advocacy and education.
1 The Public’s Adjuster, LLC v. Marc Gottesdiener & Co., No. NNH CV19-6126992 S, 2024 WL 4750613 (Conn. Superior Ct. Nov. 6, 2024).
2 Conn. Gen. Stat. § 38a-726 (b) (prior to the 2025 amendment) (emphasis added).
3 Conn. Gen. Stat. § 38a-726 (b) (emphasis added).
4 Based on the April 18, 2012, transcript of Rep. Megna.