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Kentucky Revised Statute (KRS 304.9-020)
(9) "Independent adjuster" means a person who: (a) Is an independent contractor, an employee of an independent contractor, or for tax purposes is treated as an independent contractor under Subtitle C of the Internal Revenue Code, 26 U.S.C. secs. 3101 et seq.; (b) Is compensated by an insurer or self-insurer; and (c) Investigates, negotiates, or settles property, casualty, or workers' compensation claims for insurers or self-insurers;
(20) "Public adjuster" means any person who, for compensation or anything of value: (a) Acts on behalf of an insured or aids an insured, solely in relation to first-party claims arising under insurance contracts that insure the real or personal property of the insured, in negotiating for, or effecting the settlement of, a claim for loss or damage covered by an insurance contract; (b) Advertises for employment as a public adjuster of insurance claims, solicits business or represents himself, herself, or itself to the public as a public adjuster of first-party insurance claims for losses or damages arising out of policies of insurance that insure real or personal property; or (c) Directly or indirectly solicits business, investigates or adjusts losses, advises an insured about first-party claims for losses or damages arising out of policies of insurance that insure real or personal property for another person, or engages in the business of adjusting losses or damages covered by an insurance policy for the insured;
(26) "Staff adjuster" means an individual who is an employee of an insurer who investigates, negotiates, or settles property, casualty, or workers' compensation claims on behalf of his or her employer;
Kentucky Revised Statute (KRS 304.9-080)
(2) Except as provided in KRS 304.9-430, no individual or business entity shall in this state be, act as, or hold himself, herself, or itself out as an adjuster unless then licensed as an adjuster.
Kentucky Revised Statute (KRS 304.9-430)
(1) Except as provided in this section, no person shall in this state act as or hold himself, herself, or itself out to be an independent, staff, or public adjuster unless then licensed by the department as an independent, staff, or public adjuster.
(11) Notwithstanding any other provision of this subtitle, a license as a public adjuster shall not be required of the following:
(a) An attorney licensed to practice law in Kentucky, when acting in his or her professional capacity as an attorney;
(b) A person who negotiates or settles claims arising under a life or health insurance policy or an annuity contract;
(c) A person employed only for the purpose of obtaining facts surrounding a loss or furnishing technical assistance to a licensed public adjuster, including photographers, estimators, private investigators, engineers, and handwriting experts;
(d) A licensed health care provider or its employee who prepares or files a health claim form on behalf of a patient; or
(e) An employee or agent of an insurer adjusting claims relating to food spoilage with respect to residential property insurance in which the amount of coverage for the applicable type of loss is contractually limited to one thousand dollars ($1,000) or less.
Kentucky Revised Statute (KRS 304.9-433 (5))
Property insurance policies obligate the insured to present a claim to his or her insurance company for consideration. Three (3) types of adjusters may be involved in the claim process as follows:
1. “Staff adjuster” means an insurance adjuster who is an employee of an insurance company who represents the interest of the insurance company and who is paid by the insurance company. A staff adjuster shall not charge a fee to the insured;
2. “Independent adjuster” means an insurance adjuster who is hired on a contract basis by an insurance company to represent the insurance company’s interest in the settlement of the claims and who is paid by the insurance company. An independent adjuster shall not charge a fee to the insured; and
3. “Public adjuster” means an insurance adjuster who does not work for any insurance company. A public adjuster works for the insured to assist in the preparation, presentation, and settlement of the claim, and the insured hires a public adjuster by signing a contract agreeing to pay him or her a fee or commission based on a percentage of the settlement or other method of payment.
The insured is not required to hire a public adjuster to help the insured meet his or her obligations under the policy, but has the right to hire a public adjuster. The insured has the right to initiate direct communications with the insured’s attorney, the insurer, the insurer’s adjuster, the insurer’s attorney, and any other person regarding the settlement of the insured’s claim. The public adjuster shall not be a representative or employee of the insurer. The salary, fee, or other consideration paid to the public adjuster is the obligation of the insured, not the insurer.
Kentucky Revised Statute (KRS 304.9-436)
(1) An authorized insurer shall not do business in Kentucky with an adjuster who is unlicensed in violation of KRS 304.9-080 and 304.9-430. This section shall not apply to transactions between an authorized insurer and persons providing adjusting services pursuant to KRS 304.9-430(10), (11), (12), and (14).
(Note: KRS 304.9-430(10), (11), (12), and (14) list the exceptions to the licensing requirement. (11) List the exceptions for the Public Adjuster license requirement, while (10), (12) and (14) list exceptions for an independent and staff adjuster license.)
KRS 304.9-4333 Fees and commissions for public adjuster
(1) Except as provided in subsection (2) of this section:
(a) Any fee charged to an insured by a public adjuster shall be:
1. Based only on the amount of the insurance settlement proceeds actually received by the insured; and
2. Collected by the public adjuster after the insured has received the insurance settlement proceeds from the insurer;
(b) A public adjuster may receive a commission for services provided under this subtitle consisting of:
1. An hourly fee;
2. A flat rate;
3. A percentage of the total amount paid by the insurer to resolve a claim; or
4. Another method of compensation; and
(c) A public adjuster:
1. Shall not charge an unreasonable fee; and
2. May charge a reasonable fee that does not exceed:
a. For non-catastrophic claims, fifteen percent (15%) of the total insurance recovery of the insured; and
b. For catastrophic claims, ten percent (10%) of the total insurance recovery of the insured.
Pursuant to the Kentucky Department of Insurance’s Advisory Opinion 2023-7:
Except in emergency circumstances, public adjusters may only charge for work that occurs after the execution of the public adjuster contract, pursuant to KRS 304.9-433(1)(b) and KRS 304.9 4333(1)(a). Accordingly, the Department interprets the phrase “total insurance recovery” as used in KRS 304.9-4333(1)(c) to mean all claims money received by an insured after the execution of a contract with a public adjuster. All contracts which charge a percentage of claim funds received by the insured prior to the execution of the contract are disallowed, unless approved by the Commissioner in an emergency circumstance.
Additionally, KRS 304.9-4333(1)(c)(2) allows a public adjuster to charge a reasonable fee that does not exceed fifteen percent (15%) of the total insurance recovery of the insured for non catastrophic claims, and ten percent (10%) of the total insurance recovery of the insured for catastrophic claims. This provision does not distinguish between contingency fees, hourly fees, and flat fees, and it is therefore applicable to all fee types, including but not limited to those referenced above.
Also, pursuant to KRS 304.9-020 Definitions for subtitle.
(6) "Catastrophe" means an event that results in a declaration of emergency by the Governor pursuant to KRS 39A.100 and:
(a) A large number of deaths or injuries;
(b) Extensive damage or destruction of facilities that provide and sustain human needs;
(c) An overwhelming demand on state and local response resources and mechanisms;
(d) A severe long-term effect on general economic activity; or
(e) A severe effect on state, local, and private sector capabilities to begin and sustain response activities;