Reciprocity: The Truth about Adjuster Licensing Agreements between States

Those in the insurance claims adjusting business and those who may be interested in becoming an insurance adjuster will inevitably encounter the concept of reciprocity in their licensing procedures. However, the concept is largely misunderstood or misrepresented and knowing the real ins and outs of state licensing reciprocity can save adjusters significant time, money, and aggravation. So what is reciprocity and what should an insurance adjuster know about it?

First, its important to understand what adjuster reciprocity doesn’t mean. There is a common misconception that once you have obtained a license in a state – say Texas – you can waltz into any other state at any time and begin working claims. This simply isn’t the case. Occasionally, a state’s insurance commissioner will declare a state of emergency and granted open doors to licensed adjusters from other states, but this has less to do with reciprocity and more to do with the demands of a catastrophe. Under normal conditions, even if you hold an adjuster license in one state you will still need to go through the application procedure in other states where you enjoy reciprocity.

Thus, adjuster license reciprocity refers to a mutual agreement between states whereby an adjuster holding a license in one state can successfully apply for a license in another state and vice-versa. This is important to adjusters because it means that in many cases you can apply for a license in another state without having to first pass that state’s exam or pre-licensing course – requirements that can mean significant investments of time and money.

It is also commonly held that every state has specific states with which they have a reciprocal agreement. Texas, for instance, is purported to have the greatest adjuster license reciprocity in the country. This is a little misleading. The fact of the matter is most states have an arrangement such that if you have a license in your own state of residence you can obtain a license in their state. For example, lets say you live in and have an adjuster license in Oklahoma. You are applying for a North Carolina license. North Carolina doesn’t specify that Oklahoma must recognize North Carolina’s license before granting you the license. So this isn’t exactly reciprocity, just a recognition of an adjuster’s due diligence in his/her home state. The crux of the matter is this: if you are licensed in your home state you will be able to obtain adjuster licenses in most other states. The Texas adjuster license really should be prized for the relative ease by which it is obtained rather than its high reciprocity.

Some states do not grant any kind of reciprocal agreement or observance. Arizona, California, Hawaii, Massachusetts, and New York require that all adjusters take their own particular adjuster exam or pre-licensing course. Nevada does not grant an adjuster license to anyone except residents of Nevada.

The primary pitfall adjusters encounter with adjuster reciprocity is when they attempt to bypass their own state’s licensing requirements by obtaining another state’s license. This happens rather frequently. For instance, many residents of Florida who wish to become adjusters get the impression that they can avoid taking Florida’s exam by obtaining a Texas adjuster license. This is just not true. Holding a Texas adjuster license will be valuable to non-residents of Florida in obtaining a Florida 5-20 license, but will do absolutely no good for residents of Florida. Again, the lesson here is to first obtain your home state’s adjuster license and work from there.

In the event that your home state does not require an adjuster license, you should strongly consider obtaining another state’s license where adjuster pre-licensing courses are readily available. Texas has the greatest availability of pre-licensing programs which can be found virtually across the country or even taken online.

If you are beginning your insurance adjuster career, be sure to check your state’s licensing rules and procedures When properly understood, reciprocity can work greatly in an adjusters favor when he or she is looking to diversify the geographic range of operating.

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Daniel Kerr

Daniel Kerr owns and operates and writes on subjects related to the independent adjusting industry.

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