Unauthorized Practice of Public Adjusting (UPPA) in Texas

Why Clear Role Separation Protects Contractors, Policyholders, and Insurance Claims

Insurance claims in Texas are far more than paperwork. They are regulated financial negotiations, governed by state law, licensing requirements, and consumer-protection rules. Every conversation, estimate, and negotiation related to an insurance claim exists within a legal framework designed to protect policyholders and ensure fair, ethical claim handling.

Yet every year, many well-intentioned contractors, roofers, mitigation professionals — and many unaware homeowners and business owners — unknowingly step into situations that create serious legal, financial, and claim-handling risk.

That risk is known as UPPA: Unauthorized Practice of Public Adjusting.

This article explains what UPPA truly means under Texas law, why it matters to contractors and policyholders alike, how the Texas Department of Insurance (TDI) views these issues, and why clear role separation consistently leads to stronger claims, faster resolutions, fewer disputes, and better outcomes for everyone involved.

Understanding UPPA Under Texas Law

Texas law strictly regulates who may represent, advise, or negotiate on behalf of an insured during an insurance claim.

Under the Texas Insurance Code, only a licensed Texas public insurance adjuster may legally perform activities that include:

• Interpreting insurance policy language¹

• Advising an insured regarding coverage applicability¹

• Advocating for claim payment or settlement¹

• Negotiating scope, pricing, depreciation, or exclusions¹

• Communicating settlement demands or claim positions to an insurance carrier¹

When an individual who is not licensed as a public adjuster performs these activities — even with good intentions — that individual may be engaging in the Unauthorized Practice of Public Adjusting (UPPA)².

A critical point that applies to everyone involved:

Intent does not matter under Texas law. Helping a homeowner, trying to speed up a claim, or “doing the right thing” does not exempt anyone from licensing requirements.

Why UPPA Violations Are Common — and Usually Unintentional

Most UPPA violations do not happen because someone is trying to break the law. They typically arise from routine claim-related conversations such as:

• “Your policy should cover full replacement.”

• “The carrier is underpaying — I’ll handle it.”

• “We’ll fight depreciation for you.”

• Submitting estimates framed as demands, not construction scopes

• Discussing what the insurer “owes” rather than what repairs require

The moment a contractor moves from describing physical repairs to advocating claim outcomes, the role shifts from construction into insurance representation.

That shift — often subtle — is the legal boundary Texas enforces.

Why Texas Takes UPPA So Seriously

Texas enforces UPPA aggressively because insurance claims involve:

• Fiduciary responsibility

• Significant financial consequences for policyholders

• Consumers who are often vulnerable after a loss

• Negotiations that directly affect settlement values

For these reasons, Texas regulators are clear: insurance claim negotiation is a licensed profession³.

There are no exceptions simply because:

• A contractor is experienced

• A contractor is paid from insurance proceeds

• A contractor is “just helping”

Licensing exists to protect consumers and preserve the integrity of the claims process.

The Carrier Reality: How UPPA Can Hurt Claims

Insurance carriers are trained to identify UPPA issues. When a claim file reflects contractor-led negotiation or policy interpretation, carriers may:

• Discount or reject submitted estimates

• Halt productive negotiations

• Delay claim resolution

• Escalate the claim to compliance review or SIU

Ironically, actions meant to “help” often slow claims down or weaken their credibility.

Clear role separation keeps the focus where it belongs: on damage, coverage, and valuation — not regulatory violations.

Educating Texas Policyholders: What Homeowners and Business Owners Must Know

Many policyholders unintentionally contribute to UPPA issues simply because they do not understand how claims are regulated.

A Common Misunderstanding

Policyholders often believe:

• “My contractor handles insurance all the time.”

• “The contractor knows what my policy should pay.”

• “If the contractor talks to the adjuster, it helps my claim.”

In reality, this can harm the claim, delay payments, or give the insurance carrier grounds to challenge submissions.

What Policyholders Are Entitled To — and Where Risk Begins

Policyholders ARE entitled to:

• Hire contractors to inspect damage and prepare repair estimates

• Ask contractors factual questions about construction and repairs

• Retain licensed professionals to represent their interests

Policyholders ARE exposed to risk when:

• Unlicensed parties negotiate on their behalf

• Contractors argue coverage, depreciation, or settlement values

• Claim strategy is driven by individuals without legal authority

When an unlicensed person negotiates your claim, the policyholder bears the risk, not the contractor.

The Texas Department of Insurance (TDI) Perspective

The Texas Department of Insurance (TDI) is the state agency responsible for licensing, regulating, and enforcing compliance for public insurance adjusters⁷.

TDI regulates public adjusters under Texas Insurance Code Chapter 4102, including:

• Licensing requirements

• Scope of authorized activities

• Ethical standards

• Enforcement actions for violations

TDI has authority to investigate complaints, issue penalties, suspend licenses, and take enforcement action where appropriate⁴.

From TDI’s perspective, UPPA enforcement exists to protect consumers, not to punish professionals acting in good faith.

Policyholders may:

• Verify public adjuster licenses through TDI⁸

• Review the Consumer Bill of Rights for property insurance⁹

• File complaints when improper claim representation occurs

The Proper Role Separation: The Texas-Safe Model

The strongest, most defensible claims follow a clear division of responsibilities.

Contractors SHOULD:

• Inspect and document physical damage

• Prepare detailed repair scopes and estimates

• Describe construction methods and materials

• Price work according to code and industry standards

• Answer factual questions about repairs

Public Adjusters SHOULD:

• Interpret policy language

• Determine coverage applicability

• Negotiate scope, pricing, and depreciation

• Address exclusions and disputes

• Represent the insured’s financial interests

Scope of repair is not claim negotiation. That distinction protects contractors, policyholders, and claims.

Why Smart Texas Contractors and Policyholders Prefer This Model

When roles are clearly separated:

• Claims move faster

• Disputes decrease

• Payments are more predictable

• Legal and licensing risk is reduced

• Everyone operates within their expertise

Public adjusters do not replace contractors. They ensure the claim process stays lawful, focused, and effective.

The Bottom Line for Texas Property Owners and Professionals

UPPA violations are real. They are enforceable. And they are avoidable.

The strongest claim outcomes occur when:

• Contractors focus on building

• Public adjusters focus on negotiating

• Policyholders understand who represents them — and why

That is not just compliance. It is smart, ethical, and professional claim management.

About White Rock Public Adjusting LLC

White Rock Public Adjusting LLC helps Texas homeowners, business owners, and contractors navigate insurance claims professionally, lawfully, and efficiently — without exposing any party to unnecessary risk.

Our approach is policy-driven, detail-oriented, and grounded in Texas insurance law.

📍 Dallas–Fort Worth | Texas📞 (214) 770-6302🌐 www.whiterockclaims.com

Footnotes & References

¹ Texas Insurance Code § 4102.001(3)² Texas Insurance Code § 4102.051³ Texas Insurance Code § 4102.154⁴ Texas Insurance Code § 4102.163⁵ Texas Administrative Code, Title 28, §§ 19.701–19.708⁶ Texas Insurance Code §§ 541.003, 541.060⁷ Texas Department of Insurance (TDI) – www.tdi.texas.gov⁸ TDI Public Adjuster Licensing – www.tdi.texas.gov/licensing⁹ TDI Consumer Bill of Rights – www.tdi.texas.gov/pubs/consumer/cb025.html

Disclaimer

This article is provided for general educational purposes only and does not constitute legal advice. Insurance laws and claim circumstances vary. For legal advice, consult a licensed attorney or the Texas Department of Insurance.