Proposed rules would limit contractors' role in homeowners' claims

The text would bar residential contractors from negotiating or representing homeowners on insurance claims and from accepting most transfers of claim rights after damage. These rules cover residential contractors and people acting as public adjusters in connection with homeowners' property insurance claims. A licensed public adjuster could accept a transfer only up to the amount of the adjuster's fee.

A homeowner could cancel a written contract with a residential contractor for goods or services paid from insurance proceeds. This applies to written contracts with residential contractors for goods or services paid from a property insurance claim. The deadline wording is unclear: it refers to both the fifth and third business day. Written notice must show the homeowner's intent to cancel. If the insurer said some or all of the claim is not covered, the homeowner must include that notice. The deadline runs from signing or from receiving the insurer's notice that some or all of the claim is not covered, but the text gives conflicting day counts.

Public adjusters would have to give insureds a written claim-process explanation before signing a contract, and contracts would have to list key terms, including the adjuster's pay. These rules apply to contracts between insureds and public adjusters. The explanation must say the insured does not have to hire a public adjuster, may contact people involved in settling the claim, and is responsible for the adjuster's fee. The explanation must come before the contract is signed.

The text would treat certain conduct involving public adjuster licensing, deductible rebates, and false repair-cost documents as insurance fraud. The rules cover people and businesses involved in insurance transactions and property insurance claims. The listed conduct includes knowingly acting as a public adjuster without a required license, willfully offering a prohibited rebate, and knowingly presenting a document that misstates repair costs or damage.