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Saturday, March 15, 2025

Roofer Agrees to Stop and Desist Consent Order Stopping Promoting and Appearing As a Licensed Public Adjuster


As a follow-up to my put up, All people Should Comply with the Regulation—Insurance coverage Restoration Contractors Have to Cease Appearing as Public Adjusters or Face Fines and Class Motion Lawsuits, a Consent Order 1 was not too long ago issued by the Iowa Insurance coverage Commissioner during which Darren Reeves and his corporations, Darren Reeves Roofing LLC and Darren Reeves Development LLC, have been discovered to have engaged in unlicensed public adjusting actions. This case supplies essential classes for contractors and insurance coverage professionals in regards to the strict separation between contracting and public adjusting companies.

The investigation revealed that Reeves and his corporations marketed and carried out public adjusting companies with out correct licensing. By way of their web site, Fb web page, and direct communications with potential shoppers, they promoted their capability to “work with insurance coverage corporations” and deal with insurance coverage claims on behalf of property house owners. In a single notably telling occasion, Reeves instructed an undercover investigator that he would “deal with all the pieces” with the insurance coverage firm, clearly moving into the position of a public adjuster.

A key incident concerned Reeves’s work with a business farm enterprise, M&M LLC, the place he negotiated straight with Farm Bureau Insurance coverage relating to declare settlements and Xactimate estimates. When Farm Bureau refused to switch their estimate as requested, Reeves despatched a confrontational e mail threatening to contain a licensed public adjusting agency. The sort of direct negotiation with insurers is exactly what Iowa legislation reserves for licensed public adjusters.

The case highlights a number of essential compliance points. First, Iowa Code § 522C.4, like most public adjuster licensing codes and laws all through america, explicitly prohibits anybody from working as or representing themselves as a public adjuster with out correct licensing. Second, beneath Iowa Code § 103A.71(3), residential contractors are particularly barred from representing or negotiating on behalf of property house owners relating to insurance coverage claims. These laws create a transparent boundary between building companies and claims adjusting that contractors should respect.

For these representing policyholders, this case reinforces the significance of sustaining correct licensing and understanding the strict limitations on contractor involvement within the claims course of. Whereas contractors might have worthwhile experience in figuring out injury and offering restore estimates, they have to be cautious to not cross the road into public adjusting actions.

In All people Should Comply with the Regulation—Insurance coverage Restoration Contractors Have to Cease Appearing as Public Adjusters or Face Fines and Class Motion Lawsuits, I famous the next lesson for all restoration contractors:

[I]t is clear that these legal guidelines and actions violating them are on the minds of insurance coverage regulators. Restoration contractors can count on enforcement of those legal guidelines and may chorus from appearing or contracting to be public adjusters if the relevant state legislation prohibits the identical.

To make sure compliance, I urge all insurance coverage restoration contractors to get a reliable authorized opinion from an legal professional who is aware of about these points, will evaluate the promoting, and approve the contracts which can be to be signed by policyholders needing restoration or disaster work. If the contracts usually are not authorized and violate the legislation, the quantities charged might find yourself being forfeited. Worse, if the contract as written is illegitimate, it may present a foundation for a category motion lawsuit the place all monies obtained by such unlawful contracts are voided.

The consent order serves as a reminder that state insurance coverage regulators take these violations severely. Roofers and restoration contractors play a vital and essential position in restoration after a loss. Nonetheless, all contractors who take part in or promote that they provide claims adjustment companies are topic to disciplinary and different civil lawsuits accusing them of appearing as public adjusters and breaking the legislation. This case and Consent Order spotlight the significance of guaranteeing that every one events concerned within the claims course of are working inside their correct roles.

I predict that extra state insurance coverage commissioners will comply with with related actions. Texas began all these enforcement actions, as famous in Stonewater Case Determined for Texas Division of Insurance coverage and In opposition to the Free Speech Arguments Which Would Have Gutted Public Adjusting Licensing Legal guidelines. Iowa’s profitable prosecution of comparable instances begins a pattern.

Thought For The Day

“Have the braveness to say no. Have the braveness to face the reality. Do the suitable factor as a result of it’s proper.”
—W. Clement Stone


1 Within the Matter of Darren Reeves Roofing, Div. Case No. 122515 [Order and Consent to Order] (Iowa Ins. Comm. Dec. 11, 2024).



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