The battle between Shamrock Hills, a Kansas-based roofing contractor doing business in Iowa, and the Iowa Insurance Division has highlighted one of the most contentious issues in the property insurance world today: When does a contractor cross the line into the business of public adjusting? Shamrock argued that Iowa’s statutes improperly restrict their speech, while the state insisted that it was simply regulating professional conduct. A federal judge recently sided with Iowa, dismissing Shamrock’s constitutional claims. 1 The decision is more than a technical legal ruling. It sends a message with significant implications for restoration contractors, roofers, public adjusters, and insurance regulators across the country.
Shamrock’s Case: Free Speech and Not Conduct
Shamrock Hills contended that Iowa’s laws went too far in criminalizing what are essentially conversations between contractors and homeowners about insurance claims. They argued that Iowa Code sections 103A.71(3) and 522C.2(7), which forbid residential contractors from representing or negotiating insurance claims, inherently target speech. After all, the statutes expressly prohibit “aiding,” “advising,” and “advertising” in connection with insurance claims, all of which require communication. Shamrock asserted that this made the laws content-based restrictions on speech, meaning they should be subject to strict scrutiny under the First Amendment.
To make their case, Shamrock pointed to customer reviews that regulators used against them. Statements like “Shamrock helped me with my insurance claim” or “they dealt with our insurance company” were not, in Shamrock’s view, illegal acts but examples of protected expression. They argued that the statutes were vague, leaving contractors to guess what words or advice might be construed as unlawful. In short, Shamrock said the state was punishing them for what they said, not what they did.
Iowa’s Response: Conduct Versus Speech
The State of Iowa took the opposite view, framing the case not as one about free expression but about regulating professional conduct. The state reminded the court that insurance has long been an area of heavy regulation and that most states, including Iowa, require public adjusters to be licensed. By barring residential contractors from doubling as adjusters, Iowa argued that it was protecting homeowners from fraud, high-pressure sales tactics, price gouging, and collusion. Iowa insisted that the laws regulate conduct, acting as a public adjuster without a license, even if that conduct sometimes manifests through words.
On the advertising point, Iowa drew a sharp line: commercial speech promoting an unlawful activity receives no First Amendment protection. Just as unlicensed doctors cannot advertise themselves as physicians, contractors cannot market themselves as insurance claim representatives when the law prohibits them from acting in that capacity.
The Court: Regulation of Conduct Is Not Suppression of Speech
The court agreed with Iowa, holding that the statutes target conduct rather than speech and therefore do not violate the First Amendment. The judge emphasized that a state does not lose its regulatory power simply because the conduct it bans involves words. Iowa was not trying to suppress unpopular ideas or speech, but to enforce professional licensing requirements in a market prone to abuse.
On the vagueness claim, the court leaned heavily on precedent. The Iowa Supreme Court had already interpreted these statutes in a case against 33 Carpenters Construction, where promises to “advocate on your behalf” and to “work directly with the insurance company” were found to violate the law. I discussed this case in No Love for the Contractor’s Assignment of Benefits in Iowa.
With this precedent in hand, the federal court concluded that Shamrock had fair notice of what was prohibited. Customer testimonials about Shamrock “dealing with the insurance company” fell squarely within the statutory prohibitions. Because Shamrock’s own conduct was clearly proscribed, the court dismissed both the as-applied and facial vagueness challenges.
The Implications
This ruling has practical consequences that stretch well beyond how it impacts Shamrock. For roofers and restoration contractors, the decision reinforces a hard boundary. They may repair homes and roofs, but they cannot negotiate, advise, or represent homeowners in insurance claims unless they obtain a public adjuster’s license. Even casual advertising or customer testimonials that suggest otherwise can be used as evidence of unlicensed public adjusting. My suggestion for restoration contractors and roofers is to review their marketing materials, social media posts, and customer communications with far greater caution.
For licensed public adjusters, the ruling is a victory that reinforces the fact that, except for licensed attorneys, public adjusters have exclusive authority to represent policyholders. The decision validates the public adjuster’s role as separate from that of contractors and shields their market from competition by roofers and restoration who might otherwise blur the line. This bolsters public adjuster licensing rules in other states.
For departments of insurance, the ruling strengthens their regulatory hand. It affirms that enforcement letters, investigations, and penalties directed at contractors offering claim services are constitutional exercises of state power. Regulators in Iowa and elsewhere now have clearer authority to pursue contractors who stray into claim negotiation under the guise of repair work. It also signals to other jurisdictions that similar statutes are on firm constitutional ground, especially where consumer protection against fraud and abuse is the stated goal.
This does not mean that roofers and restoration contractors cannot speak with and send information to insurance adjusters and the insurance company regarding the scope, methods, and construction costs. Insurance adjusters, as part of their good faith investigation, must seek out this information. Contractors, roofers, and insurance adjusters should routinely have these discussions to ensure a proper evaluation of the loss amount can be made. Some public adjusters get upset with me when I say this, but merely exchanging information regarding the costs and methods of repair by the contractor selected by the policyholder to do the work is not public adjusting.
This post follows the first discussion of this case in Roofing Contractor Challenges Iowa’s Public Adjusting Laws on Constitutional Grounds. I would suggest that those interested in this topic also carefully read the Texas Stonewater case discussed in Stonewater Case Decided for Texas Department of Insurance and Against the Free Speech Arguments Which Would Have Gutted Public Adjusting Licensing Laws. The Stonewater decision and this most recent decision certainly provide precedent on the issue of free speech overriding public adjuster licensing laws. Insurance regulators with appropriate licensing laws can be expected to regulate these laws more forcefully in the future.
Thought of the Day
“The life of the law has not been logic; it has been experience.”
—Oliver Wendell Holmes, Jr.
1 Shamrock Hills v. State of Iowa, No. 4:24-cv-00340 (S.D. Iowa Sept 18, 2025). (See also, Iowa Motion to Dismiss and Brief in Support, and Shamrock Hills’ Response).