A contractor obtained a post-loss assignment of benefits following damage to a home. In the ensuing lawsuit, the carrier argued that the assignment was unenforceable because the contractor was acting as an unlicensed public adjuster when it was obtained.

Iowa’s public adjuster law defines a public adjuster as anyone acting for or aiding an insured in negotiating or effecting settlement of a first party claim for damage to real or personal property of an insured. Here, the contractor aided the policyholder in negotiations. The court also looked to the contractor’s website which portrayed them as an advocate for the insured working directly with insurers to ensure all damaged areas were included in the claim.

These facts led the court to determine that the contractor was acting as an unlicensed public adjuster and the assignment of benefits was unenforceable. This case is significant since the court explicitly rejected an assignment where a contractor usurped the role of a public adjuster.  It will be interesting to see whether other jurisdictions will follow Iowa’s lead on this issue.

The case is 33 Carpenters Construction, Inc. v. The Cincinnati Insurance Company.  Please contact us for a copy of the opinion. (February, 2019)