Everything Companies and Independent Adjusters Should Know About Designated
Home States
Natural disasters can occur anywhere. When catastrophe strikes, the need for
claims adjusters rises dramatically in the disaster area – in many cases, far
exceeding the number of adjusters living in that state. For this reason, most
property insurers maintain networks of company or independent adjusters that
can be mobilized into so-called CAT teams, or catastrophe teams, and
sent to any state where they’re needed. These adjusters often live in different
states across the country, letting the insurer quickly assemble CAT teams based
on geographical need. To accommodate this, CAT team members must hold
non-resident adjuster licenses in all states where their service may be
needed.
Normally, when a licensed adjuster from one state wants to conduct business
in another, it’s necessary to obtain a non-resident license in the other state.
This is not a problem if the two states have a reciprocal licensing agreement
permitting licensed resident adjusters in one state to apply for a non-resident
license in the other.
But what happens when the adjuster seeking a non-resident license lives in a
state that doesn’t license adjusters? There are about 15 such states. How does
an adjuster in one of those states obtain a non-resident license when he or she
doesn’t hold a resident license? This is a real concern in states that rely on
out-of-state CAT teams to assist when disaster blows ashore – states like
Florida and Texas. To solve this problem, Florida and Texas (and several
others) allow themselves to be used as a designated home state. Put
simply, these states let out-of-state adjusters apply for a resident license as
if they live in that state.
One of the nice things about obtaining a resident adjuster license in a
designated home state is that the out-of-state adjuster is then free to apply
to other states for a non-resident license. This makes designated home state
licensing a popular strategy for adjusters living in non-licensing states. For
example, a company or independent adjuster living in Illinois (which does not
license adjusters) can apply to Florida as his or her designated home state and
then apply for non-resident licenses in all states that have a reciprocal
agreement with Florida.
It must be noted that out-of-state adjusters are required to complete all
the prelicensing and continuing education requirements of the designated home
state. This should not be seen as a problem, since every state that licenses
its adjusters has continuing education and, in most cases, prelicense education
requirements for its resident licensees and applicants.
Designated home states also require out-of-state resident license applicants
to pass the state’s license examination. Here is where Texas and Florida stand
apart from all other designated home states. In both cases, all adjuster
license applicants (resident applicants as well as out-of-staters seeking a
designated home state resident license) are exempt from the state’s licensing
examination if they successfully complete a specially approved exam prep
course. These courses include a final exam comparable to the state’s license
exam. WebCE® is one of several exam prep course providers that
offers courses approved in this manner in both Florida and Texas. (For
details, click here.) Property insurers that build and maintain CAT teams
rely on programs such as WebCE’s to help meet the never-ending need for new
adjusters.
To learn more about adjuster licensing courses available from
WebCE®, visit our adjuster exam prep page or call 877-488-9310 to speak to a member of our support services team.
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Dan Tromblay, CLU, ChFC, has been an insurance educator for over 40
years. Since 2009, he has served as senior product manager for PreLicense.com,
the exam prep service of WebCE, Inc.