Public adjusters across the country should take note of a Connecticut decision that teaches old lessons noted in Public Adjuster Warning—Do Not Make Illegal Contracts, and Public Adjusters Should Routinely Double-Check Contracts for Compliance and Avoid Fines or Class Action Lawsuits. Public adjuster contracts must strictly comply with the law of the state where you practice. A misstep can cost you your fee, even when you have delivered real value to a client.
Last November, a Connecticut Superior Court decided a fee dispute between The Public’s Adjuster, LLC and an insured property owner, Marc Gottesdiener. 1 The facts were typical of many adjuster engagements. After a devastating fire loss, the public adjuster prepared extensive estimates, negotiated with the carrier, and ultimately secured more than $600,000 in insurance proceeds for the insured.
The insured initially paid some fees but later stopped, prompting the public adjuster to sue for breach of contract and unpaid compensation. 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The court found that the adjuster’s contract was void and unenforceable because it relied on outdated regulatory language that conflicted with later statutory amendments. Specifically, while old regulations allowed adjusters to charge up to 10% of the insured’s “loss” (measured at the gross settlement amount), the legislature in 2012 amended Connecticut law 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.”
Because the adjuster’s contract used the outdated regulatory language, the court ruled it invalid. The adjuster salvaged a small award under an unjust enrichment theory, but only a fraction of the fee originally sought.
The Statutory Update: Public Act 25-106 (2025)
In 2025, Connecticut lawmakers doubled down on this issue by enacting Public Act 25-106 (formerly Senate Bill 1270). This law clarifies and reinforces the requirements:
- Public adjusters cannot charge or collect a fee if the insurer offers full policy limits within 30 days of the loss.
- Fees must be calculated only on the actual settlement proceeds the insured receives.
- Fees may be collected only after those proceeds are in the insured’s hands.
This statutory update leaves no room for ambiguity. Any contract language or collection practice that deviates from these requirements risks being struck down.
This case illustrates what I have warned about repeatedly: Public adjusters must draft contracts and enforce them in strict conformity with state law. It is not enough to copy regulatory forms, rely on industry practice, or assume that “everyone does it this way.” Laws change, cases explain those laws, and if your contract lags behind, you may find yourself unable to collect your rightful public adjuster fee.
In The Public’s Adjuster case, neither side nor the industry at large seemed to have noticed the statutory change for more than a decade. It took a single fee dispute to bring the issue into the courtroom, and the outcome should serve as a wake-up call for public adjusters nationwide.
Certainly, the passage of this new law in Connecticut invites other states to re-examine laws and regulations regarding public adjuster contracts, fees, and the manner of collection. I expect this to be a trend to which public adjuster trade associations must be vigilant.
Lessons for Public Adjusters
- 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.
- 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 suggest Holly Soffer, noted in the posts above, because she specializes in this type of legal practice nationally and has dialogue with insurance commissioners and regulators about public adjuster licensing and contracts on a routine basis.
Public adjusting is a profession built on advocating for policyholders in their time of need. It is more important and relevant than ever, given the loss of experienced and motivated adjusters for the insurance companies. But to remain effective and to get paid, public adjusters must safeguard their own position by following the letter and spirit of the law. Connecticut’s recent case is a reminder that an illegal or outdated contract is no contract at all.
Are you certain your contracts are up to date and in compliance?
Thought For The Day
“The difference between something good and something great is attention to detail.”
—Charles R. Swindoll
1 The Public’s Adjuster, LLC v. Marc Gottesdiener & Co., No. NNH CV19-6126992 S, 2024 WL 4750613 (Conn. Superior Ct. Nov. 6, 2024).