Tennessee Public Adjuster Bond: A Comprehensive Guide
This guide provides information for insurance agents to help their customers obtain a Tennessee Public Adjuster bond
At a Glance:
- Lowest Cost: $250 per year or $25 per month
- Bond Amount: $50,000
- Who Needs It: All public adjusters operating in Tennessee
- Purpose: To protect insureds from financial harm if the public adjuster commits fraud or engages in unfair business practices
- Who Regulates Public Adjusters in Tennessee: The Tennessee Department of Commerce and Insurance
Background
Tennessee Statute 56-6-903 requires public adjusters operating in the state to obtain a license from the Department of Commerce and Insurance. The Tennessee legislature enacted the licensing requirement to ensure that public adjusters do not engage in unethical business practices. To provide financial security for the enforcement of the licensing law, public adjusters must purchase and maintain a $50,000 surety bond to be eligible for licensure.
What is the Purpose of the Tennessee Public Adjuster Bond?
Tennessee requires public adjusters to purchase a surety bond as part of the application process to obtain a license. The bond ensures that insureds will receive compensation for financial harm if the public adjuster fails to abide by the regulations outlined in Tennessee Statute 56-6-911. Specifically, the bond protects insureds if the public adjuster commits fraud or engages in unfair business practices. In short, the bond is a type of insurance that protects insureds if the public adjuster violates the terms of their license.
How Can an Insurance Agent Obtain a Tennessee Public Adjuster Surety Bond?
BondExchange makes obtaining a Tennessee Public Adjuster bond easy. Simply log in to your account and use our keyword search to find the “public adjuster” bond in our database. Don’t have a login? Gain access now and let us help you satisfy your customers’ needs. Our friendly underwriting staff is available by phone at (800) 438-1162, email, or chat from 7:30 AM to 7:00 PM EST to assist you.
At BondExchange, our 40 years of experience, leading technology, and access to markets ensures that we have the knowledge and resources to provide your clients with fast and friendly service whether obtaining quotes or issuing bonds.
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Is a Credit Check Required for the Tennessee Public Adjuster Bond?
Surety companies will run a credit check on the public adjuster to determine eligibility and pricing for the Tennessee Public Adjuster bond. Adjusters with excellent credit and work experience can expect to receive the best rates. Adjusters with poor credit may be declined by some surety companies or pay higher rates. The credit check is a “soft hit”, meaning that the credit check will not affect the adjuster’s credit.
How Much Does the Tennessee Public Adjuster Bond Cost?
The Tennessee Public Adjuster surety bond can cost anywhere between $250 to $2,000 per year or $25 to $200 per month. Insurance companies determine the rate based on a number of factors including your customer’s credit score and experience. The chart below offers a quick reference for the approximate bond cost on the $50,000 bond requirement.
$50,000 Public Adjuster Bond Cost
| Credit Score* | Bond Cost (1 Year) | Bond Cost (1 month) |
|---|---|---|
| 720+ | $250 | $25 |
| 680 – 719 | $375 | $38 |
| 600 – 679 | $500 | $50 |
| 575 – 599 | $625 | $63 |
| 550 – 574 | $750 | $75 |
| 525 – 549 | $1,250 | $125 |
| 525 – 549 | $2,000 | $200 |
Who is Required to Purchase the Tennessee Public Adjuster Bond?
Tennessee requires public adjusters to purchase a surety bond as a prerequisite to obtaining a business license. To paraphrase Tennessee Statute 56-6-902, a public adjuster is a person that acts on behalf of or aids insureds in negotiating the settlement of first-party insurance claims.
Employees of insurance carriers are exempt from this definition.
BondExchange now offers monthly pay-as-you-go subscriptions for surety bonds. Your customers are able to purchase their bonds on a monthly basis and cancel them anytime. Learn more here.
How Do Public Adjusters Become Licensed in Tennessee?
Public adjusters in Tennessee must navigate several steps to obtain a license. Below are the general guidelines, but applicants should refer to the licensing statutes and the state’s licensing guidelines for details on the process.
License Period – The Tennessee Public Adjuster License is valid for two years from the date of issuance and must be renewed before the expiration date
Step 1 – Pass the Exam
Tennessee requires resident public adjusters to pass a state exam before applying for licensure. Public adjusters should contact Pearson Vue to schedule their exams.
Step 2 – Get Fingerprinted
All resident public adjuster applicants must have their fingerprints taken and submitted to the Department of Commerce and Insurance. Instructions on how to get fingerprinted can be found on page 3 of licensing guidelines.
Step 3 – Purchase a Surety Bond
Public adjusters must purchase and maintain a $50,000 surety bond.
Step 4 – Purchase Insurance
Public adjusters are required to purchase errors and omissions (E&O) insurance with a minimum limit of $500,000.
Step 5 – Complete the Application
All public adjuster license applications should be submitted online through the NIPR or mailed to the following address:
STATE OF TENNESSEE
DEPARTMENT OF COMMERCE AND INSURANCE
Insurance Division – Agent Licensing
500 James Robertson Parkway
Nashville, TN 37243-1134
Public adjusters must complete the application in its entirety and pay a $100 filing fee.
How do Tennessee Public Adjusters Renew Their Licenses?
Public adjusters can renew their licenses (and pay the $100 renewal fee) online through the NIPR. Public adjusters must complete 24 hours of continuing education each renewal period. The Tennessee Public Adjuster License is valid for two years from the date of issuance and must be renewed before the expiration date.
What are the Insurance Requirements for Public Adjusters in Tennessee?
Tennessee requires public adjusters to purchase E&O insurance with a minimum limit of $500,000. Public adjusters must purchase and maintain a $50,000 surety bond.
How do Tennessee Public Adjusters File Their Bonds?
Public adjusters in Tennessee should submit their completed bond forms, including the power of attorney, online through the NIPR. The surety bond requires signatures from the surety company and the public adjuster. The surety company should include the following information on the bond form:
- Legal name and address of the individual buying the bond
- Surety company’s name
- Date the bond is signed
- Date the bond goes into effect
What Can Tennessee Public Adjusters Do to Avoid Claims Made Against Their Bonds?
To avoid claims against their bonds, public adjusters in Tennessee must follow all license regulations in the state, including some of the most important issues below that tend to cause claims:
- Do not commit fraud
- Do not engage in unfair business practices
For example, if a public adjuster does not provide a client with all claims funds owed to them, the client could file a claim against the adjuster’s bond to recoup their losses.
What Other Insurance Products Can Agents Offer Public Adjusters in Tennessee?
Public adjusters in Tennessee must purchase E&O insurance. Bonds are our only business at BondExchange, so we do not issue any other types of insurance, but our agents often utilize brokers for this specific line of business. A list of brokers in this space can be found here.
How Can Insurance Agents Prospect for Tennessee Public Adjusters?
The NAIC provides a database of active public adjusters in the state. However, agents must pay a fee to obtain a full list. Contact BondExchange for additional marketing resources. Agents can also leverage our print-mail relationships for discounted mailing services.