Pennsylvania bill caps public adjuster fees, doubles bonds

What happened: A Pennsylvania bill would cap public adjuster fees and ban them from collecting contractor referral payments 

Who’s involved: Pennsylvania General Assembly, public adjusters, property insurers 

What’s at stake: Fee caps of 20% for standard claims and 10% for catastrophic claims, plus a doubled $40,000 bond minimum 

Why it matters: Carriers and adjusting firms in Pennsylvania would face new compliance rules on fees, conflicts of interest and disclosures 

Where it stands: Passed the Senate Banking and Insurance Committee on June 9, 2026; not yet enacted 

A Pennsylvania bill would cap public adjuster fees at 20% and bar adjusters from collecting referral payments from contractors. 

House Bill 1972, introduced by Representative Robert Merski and nine co-sponsors in October 2025, was amended by the Senate Banking and Insurance Committee on June 9, 2026. The bill would rewrite the Commonwealth’s Public Adjuster Licensing Law, on the books since 1983. 

The money rules 

Pennsylvania currently sets no percentage ceiling on what public adjusters can charge. HB 1972 would cap fees at 20% of an insurance claim settlement and 10% of a catastrophic claim settlement – defined broadly to include presidential disaster declarations, governor-declared emergencies and incidents causing widespread infrastructure damage or severe economic disruption. 

Public adjusters would also be blocked from collecting fees before a claim settles, skimming from the portion of a settlement received before they were retained, or taking a cut of additional living expenses. 

Conflicts and referrals 

The bill draws a hard line on financial entanglements. Public adjusters, their employees, relatives and affiliates would be prohibited from holding any financial interest in a claim they are adjusting. They would also be barred from referring policyholders to any contractor from whom they or their associates stand to receive compensation. 

That provision tightens existing law, which previously allowed such arrangements if disclosed and written into the contract. 

Bonds, rescission and disclosure 

The minimum surety bond would double from $20,000 to $40,000. Bond issuers would need to give the Insurance Commissioner and the licensee 30 days’ written notice before terminating or replacing a bond. 

Policyholders would get longer to walk away. Rescission windows would stretch to 10 business days for catastrophic claims, five business days where a public adjuster solicited the policyholder within 48 hours of a loss and three business days for everything else. Current law provides a flat three calendar days. 

A new pre-contract disclosure would require public adjusters to explain the differences between company, independent and public adjusters – and confirm they do not work for the insurer. 

The enforcement edge 

Operating without a license would become a third-degree felony under Pennsylvania’s insurance fraud statute. Insurers receiving a notification letter from an unlicensed person would be required to report them to the Insurance Department, which could refer the matter to the Attorney General. 

HB 1972 would take effect 180 days after enactment. As of the amended text reviewed, it had passed the Senate Banking and Insurance Committee but had not been enacted.