Arizona Adjuster Insurance Exam 2026

One License, Both Sides of the Claim

The Arizona adjuster license is issued by the Department of Insurance and Financial Institutions (DIFI) under Title 20, Chapter 2, Article 3.2 of the Arizona Revised Statutes.

That article is three sections long. § 20-321 defines the terms, § 20-321.01 sets the licensing requirement and qualifications, and § 20-321.02 imports a list of other provisions. A fourth section, § 20-321.03, is added effective 12 September 2026. Almost everything distinctive about Arizona adjuster regulation follows from how short that article is.

§ 20-321(1)(a) defines an adjuster as any person who for compensation, fee or commission adjusts, investigates or negotiates settlement of claims arising under property and casualty insurance contracts "on behalf of either the insurer or the insured" — or holds themselves out to do so.

Read the last clause carefully, because it decides the structure of the whole regime. The same license covers the adjuster who works for the carrier and the adjuster who works for the policyholder. Arizona does not issue a separate public adjuster license.

The Department says so in its own words. Its licensing page describes "public adjuster" as "a term often used to describe a person hired to adjust, investigate or negotiate insurance claim settlements on behalf of the insured," and "independent adjuster" as "a term often used to describe a person who is an independent contractor for an insurance company or managing general agent." Both are descriptions of work, not names of licenses.

The definition is also limited to property and casualty contracts. Combined with the exclusion of registered third-party administrators handling accident, health and life claims, that puts life and health claim adjusting outside the Arizona adjuster license altogether.

Nine Categories That Are Not Adjusters At All

Arizona does not write its exemptions as exceptions to a licensing requirement. It writes them into the definition — § 20-321(1)(b) lists nine categories that the word "adjuster" does not include. The distinction matters, because a person outside the definition is not an unlicensed adjuster; they are not an adjuster.

(i) a licensed attorney qualified to practice law in Arizona; (ii) a salaried employee of an insurer or of a managing general agent; (iii) a licensed insurance producer who adjusts losses arising under policies procured through that producer; (iv) an employee of a political subdivision adjusting losses under policies covering it or persons it indemnifies.

(v) an independent contractor retained for technical assistance only — the statute names photographers, estimators, engineers, private detectives and handwriting experts; (vi) an individual who collects claim information and performs data entry, including into an automated claims adjudication system, where not more than twenty-five such persons are supervised by a single licensed adjuster or producer.

(vii) a licensed producer who supervises or adjusts under (vi); (viii) registered third-party administrators and their employees administering accident and health or life claims; (ix) an individual who adjusts, investigates or negotiates settlement of only workers' compensation claims.

Two of these deserve their own sections and get them below — the salaried employee test, and the workers' compensation exclusion.

The twenty-five-person figure at (vi) is a span-of-control cap and it is per supervisor. A claims operation running sixty intake staff on automated adjudication needs at least three supervising licensed adjusters or producers to keep everyone inside the exclusion. Exceed the ratio and the surplus staff are adjusting without a license.

The Staff Exclusion Turns on How You Are Paid

Most states write the staff adjuster exemption around employment form — a regular salaried employee and not an independent contractor. Arizona writes it around compensation.

§ 20-321(1)(b)(ii) excludes "a salaried employee of an insurer or of a managing general agent," and then supplies its own definition: "For the purposes of this item, 'salaried employee' means an employee whose compensation is not contingent on the outcome of a claim determination."

So the question Arizona asks is not how you are engaged. It is whether your pay moves with claim outcomes.

A genuinely salaried carrier employee is outside the definition of adjuster and needs no license. A salaried carrier employee whose bonus is tied to claim outcomes is not within the exclusion, because their compensation is contingent on exactly the thing the statute names.

That is a narrower and more searching test than the usual one, and it is aimed at a real problem: an incentive structure that pays more for paying less. Note that the claims rule attacks the same problem from the other direction — Arizona's administrative code requires that where a claim amount is reduced for betterment or depreciation, the basis be itemized in the file.

The exclusion covers employees of a managing general agent as well as of an insurer, which is broader than many states.

A Pure Workers' Compensation Adjuster Needs No License

§ 20-321(1)(b)(ix) excludes from the definition of adjuster "an individual who adjusts, investigates or negotiates settlement of only workers' compensation claims."

The word "only" carries the whole provision. A person handling workers' compensation exclusively is not an adjuster in Arizona and needs no license. The moment that person touches a property or casualty claim, the exclusion is gone and the general requirement applies.

This is one of three instruments that carve workers' compensation out, and reading them together is what makes the point.

First, the licensing exclusion above. Second, the claims rule: A.A.C. R20-6-801(A) applies to all insurance policies and contracts "except policies of Worker's Compensation and title insurance" — so the acknowledgment, investigation and settlement clocks in Arizona's unfair claims regulation do not reach a comp claim at all. Third, the tort: A.R.S. § 23-930 gives the Industrial Commission of Arizona "exclusive jurisdiction… over complaints involving alleged unfair claim processing practices or bad faith."

An Arizona workers' compensation adjuster therefore sits outside the licensing statute, outside the claims regulation, and outside the bad-faith tort. The remedy for mishandling is administrative: a civil penalty of up to $1,000 per violation, plus a claimant benefit penalty of twenty-five percent of the benefit amount ordered, or $500, whichever is more.

None of that means comp claims are unregulated — Title 23 and the Industrial Commission's own rules govern them closely, and the twenty-one-day decision deadline covered later in this guide is one of the strictest clocks in Arizona insurance law. It means the insurance regulatory apparatus is not where comp is handled.

There Is No Emergency License Because There Is a Blanket Exemption

Many states create a temporary emergency or catastrophe adjuster license, with an application, a fee and a time limit. Arizona creates an exemption instead.

§ 20-321.01(D): "An adjuster who is licensed or allowed to act as an adjuster in the state of the adjuster's domicile is not required to be licensed pursuant to this section or meet the qualifications prescribed in this section if the adjuster is sent to this state on behalf of an insurer for the purpose of investigating or making adjustment of a particular loss under an insurance policy or a series of losses resulting from a catastrophe common to all those losses."

There is no application, no fee, no registration and no time limit. A domicile-licensed adjuster flown in by a carrier after a hailstorm is simply outside the licensing requirement for that event.

Two conditions have to hold, and both are easy to miss. The adjuster must be licensed or allowed to act in their domicile state — so an adjuster domiciled in a state that does not license adjusters cannot use this route. And the adjuster must be sent on behalf of an insurer.

That second condition excludes insured-side catastrophe work entirely. An out-of-state adjuster who comes to Arizona to solicit and represent policyholders after a storm is not being sent by an insurer, is outside § 20-321.01(D), and needs an Arizona license. From 12 September 2026 that person also faces the new solicitation and repair-participation prohibitions covered later in this guide.

The exemption also covers a particular loss, not a general license to work Arizona claims. It is scoped to the event.

There Is No Prelicensing Education

Arizona imposes no prelicensing education requirement for the adjuster license. There is no course, no hour count and no approved provider list, because there is nothing to provide.

The qualifications are set out in full at § 20-321.01(C) and there are three of them: be at least eighteen; satisfy the residency or reciprocity requirement; and pass an examination given by or under the supervision of the director.

That is the complete list. The section then adds the fingerprint provision at (E) and the contracting authority at (F), and it is done.

The absence is worth stating positively rather than as an omission, because Arizona has a statute that makes it structural. § 41-1030(B) provides that an agency "shall not base a licensing decision in whole or in part on a licensing requirement or condition that is not specifically authorized by statute, rule or state tribal gaming compact," and that a general grant of rulemaking authority does not suffice.

So DIFI could not impose a prelicensing requirement administratively even if it wished to. It would need a statute or a properly made rule — and the licensing article of Arizona's administrative code is, as covered below, almost entirely repealed or expired.

The Examination, and Two Numbers Nobody Publishes

PSI Services LLC administers Arizona's insurance examinations. DIFI states it directly: "PSI Services LLC (PSI) is the official vendor for administering pre-licensing examinations and Continuing Education (CE) for insurance professionals in Arizona."

The examination is the AZ Property & Casualty Adjuster examination. It is 150 questions with a 2.5 hour limit, per PSI's published content outline.

The content outline is weighted as follows: Property and Casualty Insurance Basics 20%; Homeowners Policy Concepts 12%; General Insurance Concepts 11%; Personal Automobile Policy 11%; Adjustment Process 11%; Dwelling Policy Concepts 7%; Insurance Regulation 6%; Commercial Property Policies 6%; Commercial Automobile Policy 5%; Commercial General Liability 5%; Federal Laws and Regulations 4%; Other Types of Insurance Policies 2%.

Study the weighting, not the reputation of the exam. The single largest area is general property and casualty coverage knowledge, and the commercial lines together — commercial property, commercial auto and commercial general liability — carry 16%, more than the adjustment process itself. An adjuster who prepares only for claims mechanics will be underprepared for two thirds of the paper.

Neither the passing score nor the examination fee is published. PSI's Arizona program pages state neither; the Department states neither; and there is no candidate bulletin in PSI's Arizona document directory. PSI's own guidance is that the fee is shown during scheduling.

That is the finding rather than a gap in this guide. A 70% figure circulates widely, and it traces to a bulletin published in 2018 by the vendor that no longer administers this examination. Because Arizona publishes no threshold at all, the only safe preparation strategy is to build a wide margin.

Four Attempts, One Year, and Five Ways Not to Sit It

The attempt limit is statutory, not vendor policy, and that matters because vendors change. § 20-284(H) — imported into the adjuster article by § 20-321.02 — permits a maximum of four attempts at an examination in a twelve-month period. Fail the fourth and you wait one year before you may sit that examination again.

PSI restates it on its Arizona landing page and adds a detail worth knowing: "An individual who fails an examination that covers more than one line of license authority is considered to have failed the examination for each individual line of license authority."

A passing score is good for one year. § 20-284(A) requires the application materials and fees to be received within one year after passing.

There are also routes past the examination entirely.

The designation waiver at § 20-321.01(C)(3) is the significant one and it is covered in its own section below — it waives the examination and the residency requirement.

§ 20-288, Exemption from examination, is imported into the adjuster article by § 20-321.02, as is § 20-287, Nonresident licensing. And from 12 September 2026, new § 20-321.03 opens a further route for certain salaried employees, covered at the end of this guide.

A Claims Designation Waives the Exam and the Residency Rule

This is the most useful provision in Arizona adjuster licensing for an experienced adjuster, and it is a single sentence buried inside the examination requirement.

§ 20-321.01(C)(3) requires an applicant to pass an examination — and then provides: "Notwithstanding subsection D of this section, the requirements under this paragraph and paragraph 2 of this subsection are waived if the applicant holds a current claims certificate issued by a national or state-based claims association with a certification program that is approved by the director and that consists of at least forty hours of preexamination course work, a proctored examination of sufficient length to adequately determine the competency of the applicant and at least twenty-four hours of continuing education required for certification renewals on a biennial basis."

Paragraph 2 is the residency requirement. So a qualifying designation waives both the examination and the requirement to be an Arizona resident or a resident of a reciprocating state.

That is unusual. Many states waive an examination for a professional designation. Waiving residency as well means an adjuster living in a state that neither licenses adjusters nor reciprocates with Arizona can still hold an Arizona license on the strength of the designation alone.

Three conditions attach to the certifying program, and they are cumulative: at least forty hours of pre-examination coursework, a proctored examination, and at least twenty-four hours of continuing education for biennial renewal. The program must be approved by the director, so confirm approval before relying on a particular designation.

And note the sting in the tail. The certificate must be current. Because the approved program must itself require twenty-four hours of continuing education biennially, an adjuster who enters Arizona by this door carries an ongoing education obligation — imposed by the certifying association as the price of keeping the designation, not by Arizona as a condition of renewal. It is the only continuing education burden in Arizona adjuster licensing.

Residency, Reciprocity and Fingerprinting

§ 20-321.01(C)(2) requires an applicant to be "a resident of this state or a resident of another state that allows residents of this state to act as adjusters in the other state."

That is a reciprocity-conditioned residency rule, and it is Arizona's own. The producer reciprocity section, § 20-300, is not among the sections § 20-321.02 imports into the adjuster article — Arizona wrote this rule instead of borrowing that one.

As covered above, the designation waiver at (C)(3) waives this requirement as well as the examination.

Two narrow routes exist for residents of states that do not license adjusters, and both are limited to portable electronics. § 20-321.01(H) lets an applicant residing in a non-licensing state, who is otherwise allowed to adjust portable electronics claims at home, apply for an Arizona license limited to portable electronics insurance claims. § 20-321.01(G) gives the same limited license to a resident of Canada holding an adjuster license in another state that permits that work.

Outside portable electronics, Arizona offers no general designated home state credential. The answer to "does Arizona issue a designated home state license" is: not as such — you satisfy residency or reciprocity, or you use the designation waiver.

Fingerprinting is discretionary in law and required in practice. § 20-321.01(E) provides that "to determine license eligibility, the director may require fingerprints of applicants and the submission of the fee and the fingerprints as required by section 20-285, subsection E, paragraph 2." The discretion has been exercised — DIFI operates an electronic fingerprinting process and publishes a fingerprint verification form. No current fingerprint amount is published on a Department or vendor page, so confirm the cost when you schedule.

One Published Fee, and Two That Are Not

DIFI publishes a single figure: a base fee of $120.00 for each class of license. It is the same for an individual and for a business entity, and the same for an initial application and for a renewal. Add $500 if you are also renewing life settlement broker authority, or $1,000 for surplus lines broker authority.

That $120 buys a four-year term, which makes Arizona one of the least expensive states to maintain an adjuster license in — there is no continuing education cost and no annual renewal.

The fee statute is worth understanding because it is a third shape. § 20-167(A) provides that the director "shall collect in advance the following fees, determined by the director" — and then sets out two columns, "Not Less Than" and "Not More Than." It is neither a fixed amount nor a simple ceiling. It is a band, with the actual figure set inside it by the director.

There is no adjuster-specific fee line. The adjuster license falls under "All other licenses, quadrennially," with a statutory band of $60.00 to $180.00. The $120 DIFI charges sits squarely inside it — which is the check that confirms the published figure is lawful.

The practical consequence of a band is that the fee can move without legislation. A published figure is the director's current determination, not a statutory constant.

Neither the examination fee nor the fingerprint fee is published. PSI's Arizona pages state no fee and its guidance is that the amount appears during scheduling; no Department page states a fingerprint amount. Figures in circulation for both trace to the prior examination vendor's bulletins and no longer have a live source. § 20-167(D) explains why the examination fee is not in the statute at all: the director may contract out the examination, the fee is "payable directly to the contractor by the applicant," and "the fee may exceed the amounts prescribed in this section."

A Four-Year Term, and a First Term That Is Not Four Years

Arizona adjuster licenses run four years. That is unusual — most states run two — and it comes from § 20-289, which § 20-321.02 imports into the adjuster article.

§ 20-289(B)(1), for an individual, expires the license "on the last day of the month of the licensee's birthday, but not less than three years and not more than four years after the last day of the month in which the license is issued or is required to be renewed."

So the first term is variable. Because the expiry has to land on a birth month inside a three-to-four-year window, a new licensee's first term can be as short as three years. "Four years" describes the steady state after the first renewal, not the initial license. Business entities expire "on the last day of the same month four years after" issuance or the renewal due date.

Renewal requires an application on an approved form and the fee. § 20-289(D) also lets the director require documents verifying the application including prior criminal records, and a full set of fingerprints for a state and federal criminal records check.

DIFI permits renewal up to ninety days before expiration, and warns that if a complete renewal application and fee are not received on or before the expiration date, the license expires, you must stop conducting business, and a $100 late renewal fee applies.

§ 20-289(E) sets the lapse mechanics: the license "expires at midnight on the renewal date." For one year afterwards a person who otherwise qualifies may renew with the fee plus $100. An application received within that year is treated as a renewal; one received after it is treated as a new application — which means the examination and the full qualification process again.

Surrender, Discipline and the Reporting Duties

Voluntary surrender is worse than letting a license lapse, and the asymmetry is easy to miss. § 20-289(F) lets the director accept the surrender of one or more lines or of the entire license — and then provides that a person who surrenders "may obtain the same authority or license only if the person complies with the requirements that apply to a person who has not previously held the authority or license."

That means requalification from the beginning, including the examination. The Department's clearance letter guidance states the practical effect plainly: surrender insurance license authority and Arizona law prevents you from obtaining that authority for a year.

Compare the lapse route. A license that simply expires can be renewed for a full year afterwards with the fee plus $100, with no requalification. If you are stepping away from adjusting temporarily, understand which door you are walking through.

Discipline runs through the imported producer provisions. § 20-295 governs license denial, suspension and revocation and the civil penalty; § 20-296 sets out the effect of suspension or revocation; § 20-301 requires the report of actions; and § 20-292 provides for injunctive relief.

§ 20-297 governs assumed business names, and § 20-290(A) the records an individual licensee must keep. § 20-299 provides for the sharing of information between regulators.

Individual licensing is personal. DIFI states that individuals who act as adjusters or hold themselves out as adjusters must be individually licensed, even if they work for a business-entity adjuster. The business entity holds its own license at the same $120 per class.

Arizona Requires No Continuing Education, and the Reason Is Structural

DIFI states it without qualification: "CONTINUING EDUCATION NOT REQUIRED. Arizona law does not require you to complete insurance continuing education."

That is worth proving from the statute rather than accepting on an agency page, because one provision appears to say the opposite.

§ 20-321.02 imports § 20-289 into the adjuster article, and § 20-289(C)(3) conditions renewal on the applicant providing "evidence that the licensee has complied with the continuing education requirements prescribed in chapter 18 of this title." Read alone, that plainly imposes continuing education on adjusters.

It does not, and the reason is a definition two chapters away. § 20-2901(9) defines chapter 18's "licensee" as "an individual insurance producer licensed for major line insurance as defined in section 20-281." And § 20-281(5) defines an insurance producer as "a person required to be licensed under this article to sell, solicit or negotiate insurance" — the producer article, not the adjuster article.

An adjuster is not an insurance producer. An adjuster is licensed under Article 3.2 and does not sell, solicit or negotiate insurance. So chapter 18 does not reach adjusters, and § 20-289(C)(3)'s condition is empty as to them.

The negative holds at the rule level as well, and that is the half most people never check. Arizona's licensing rules are A.A.C. Title 20, Chapter 6, Article 7 — and Article 7 is almost entirely gone. R20-6-701 is repealed. R20-6-702 through R20-6-707 have expired. R20-6-709 is repealed. The one live rule is R20-6-708, Licensing Time-frames, which binds the Department's processing clock and imposes nothing on licensees. No article anywhere in Chapter 6 addresses continuing education.

And § 41-1030(B) closes the door, because DIFI cannot base a licensing decision on a condition "not specifically authorized by statute, rule or state tribal gaming compact," and a general grant of rulemaking authority expressly does not suffice.

The Statute Needs a Pattern; the Rule Does Not

Arizona regulates claim settlement in two places, and they answer the most important question in opposite ways.

The statute is § 20-461, in Title 20, Chapter 2, Article 6. Its chapeau reads: "A person shall not commit or perform with such a frequency to indicate as a general business practice any of the following:" — followed by nineteen enumerated practices.

So the statute requires a pattern. A single act, however egregious, is not a violation of § 20-461.

The rule is A.A.C. R20-6-801, made under § 20-461(4)'s rulemaking authority. It carries no frequency element anywhere. Its commands are flat imperatives — "Every insurer shall complete investigation of a claim within 30 days," "No insurer shall…", "No agent shall…". There is no chapeau conditioning any of it on a general business practice.

A single act violates the rule even though the statute requires a pattern. The two instruments do not line up, and the question "does Arizona require a general business practice?" has opposite correct answers depending on which one you are asked about. The complete answer names the instrument.

The nineteen statutory practices track the familiar model — misrepresenting facts or policy provisions, failing to acknowledge communications promptly, failing to adopt reasonable investigation standards, refusing to pay without a reasonable investigation, failing to affirm or deny within a reasonable time, not attempting in good faith to effectuate prompt and equitable settlements, compelling insureds to litigate, appealing arbitration awards as a matter of policy, and so on — with Arizona-specific additions including nonmechanical sheet glass and a catch-all for failing to comply with chapter 15.

Enforcement is by cease and desist and civil penalty under § 20-456, and § 20-461(E) deposits penalties collected in the state general fund.

There Is No Private Right of Action, and the Bar Reaches the Rule

§ 20-461(D) is two sentences and it decides a great deal:

"Nothing contained in this section is intended to provide any private right or cause of action to or on behalf of any insured or uninsured resident or nonresident of this state. It is, however, the specific intent of this section to provide solely an administrative remedy to the director for any violation of this section or rule related to this section."

Read the second sentence's last clause, because it is the part that matters and the part most summaries drop. The administrative-only remedy covers a violation of the section or of a rule related to it — and R20-6-801 is exactly such a rule, made under § 20-461 and naming it in its own applicability clause.

So neither the statute nor the regulation is privately enforceable. An insured cannot sue on § 20-461, and cannot sue on R20-6-801 either. Enforcement belongs to the Director.

But the common-law tort is untouched, and that is the whole of the private remedy in Arizona. Arizona bad faith is not a § 20-461 action; it was created by the courts and exists independently. § 20-461(D) does not reach it.

The practical position for an adjuster is therefore layered. R20-6-801 sets the operational standards and the Director enforces them. The bad-faith tort is what the insured sues on. And the rule's standards are not irrelevant to the tort — practitioner treatment is that an expert may testify that an insurer's standard of care rests on the same principles, while at least one court has declined to give the statute to a jury as an instruction.

The Clocks — and the Mixed Day Types Inside One Rule

Every operational deadline is in R20-6-801, and the day conventions are not uniform. This is the single most dangerous feature of Arizona claims practice for an adjuster who assumes consistency.

In WORKING days: acknowledge receipt of notice of a claim within 10 working days, unless payment is made within those 10 working days (E.1); reply to all other pertinent communications that reasonably suggest a response is expected within 10 working days (E.3); furnish the Department an adequate response to an inquiry respecting a claim within 15 working days (E.2); and advise the first party claimant of acceptance or denial within 15 working days after receipt of properly executed proofs of loss (G.1.a).

In PLAIN days: "Every insurer shall complete investigation of a claim within 30 days after notification of a claim, unless the investigation cannot reasonably be completed within 30 days" (F). If more time is needed, the insurer notifies the first party claimant within fifteen working days after the proofs of loss, and then — "45 days from the date of the initial notification and every 45 days thereafter" — sends a letter setting out the reasons additional time is needed (G.1.b).

The headline investigation deadline is the one that is not in working days. An adjuster who carries a working-day assumption across the whole rule will miscount the thirty-day investigation clock in the insurer's favor by roughly two weeks — and that clock is the one a regulator is most likely to test.

And there is a second payment clock in the statute that the rule does not mention. § 20-462 provides that claims "not paid within thirty days after the receipt of an acceptable proof of loss" bear interest at the legal rate from the date the claim is received.

The two do not match. § 20-462 runs 30 plain days from an acceptable proof of loss; R20-6-801(G.1.a) runs 15 working days from properly executed proofs of loss. Both are live. The rule's clock is tighter and carries regulatory consequences; the statute's carries interest.

§ 20-462(C) contains the escape that matters: the interest provision does not apply to "claims denied in good faith within thirty days after receipt of acceptable proofs of loss." A prompt, good-faith denial stops the interest running.

What the File Must Contain, and What It Need Not

R20-6-801(C) is short and it is the provision that makes every other standard enforceable:

"The insurer's claim files shall be subject to examination by the Director or by his duly appointed designees. The files shall contain all notes and work papers pertaining to the claim in such detail that pertinent events and the dates of the events can be reconstructed."

"Reconstructed" is the operative word. The test is not whether the file records a conclusion; it is whether a reader coming to it cold can rebuild what happened and when. A file that records a denial without recording the investigation that preceded it fails the standard even if the denial was right.

That subsection is the entire record-keeping provision, and it sets no retention period. There is no number of years anywhere in R20-6-801. If you see a retention period attributed to Arizona's claims rule, it is not coming from the rule.

The rule does impose one specific documentation duty with teeth. Where the amount claimed is reduced because of betterment or depreciation, all information for the reduction must be contained in the claim file, and the deductions must be itemized and specified as to dollar amount.

Read that alongside Arizona's labor-depreciation case law — covered in the property section below — and the practical rule emerges: not only must any depreciation be itemized, but where the policy uses replacement cost less depreciation, labor may not be depreciated at all. An itemization that does not separate labor from materials cannot demonstrate compliance.

What the Rule Forbids — and Who It Actually Binds

R20-6-801 imposes its duties on the insurer. Almost every subsection begins "No insurer shall" or "Every insurer shall." There is one exception, and it is narrower than it looks.

R20-6-801(D.2) provides: "No agent shall conceal from first party claimants benefits, coverages or other provisions of any insurance policy or insurance contract when the benefits, coverages or other provisions are pertinent to a claim."

But "agent" is a defined term, and the current definition excludes adjusters. R20-6-801(B)(1): "'Agent' means any individual, corporation, association, partnership or other legal entity authorized to represent an insurer with respect to a claim. 'Agent' has the same meaning as 'Insurance producer' as defined at A.R.S. § 20-281(5)."

§ 20-281(5) defines an insurance producer as a person required to be licensed under the producer article to sell, solicit or negotiate insurance — which an adjuster is not. So D.2 binds producers, not adjusters.

The result is that Arizona's administrative code imposes no claim-handling duty on an adjuster personally. The duties run to the insurer, and the adjuster's conduct is the insurer's exposure. That is consistent with Arizona's case law on personal liability, covered below.

It changes on 12 September 2026, when § 20-321.02 gains three statutory prohibitions aimed squarely at the adjuster. Those are covered in the final section of this guide.

Other prohibitions in the rule worth knowing, all binding the insurer: no denying a claim because the claimant failed to exhibit damaged property, unless the insurer requested it and the claimant refused "without a sound basis"; no statements that a failure to meet a notice or proof-of-loss time limit relieves the company "unless the failure to comply with the time limit prejudices the insurer's rights"; no release extending beyond the subject matter that gave rise to the payment; and no partial-payment check or draft carrying language that releases the insurer from total liability.

Arizona Is a Bad-Faith State, and the Standard Is the Investigation

Arizona recognizes first-party bad faith as a tort, and the line of authority is long and stable.

Noble v. National American Life Insurance Co., Docket 14531-PR (Arizona Supreme Court, 17 February 1981) established the standard: a plaintiff must show "the absence of a reasonable basis for denying benefits of the policy and the defendant's knowledge or reckless disregard of the lack of a reasonable basis for denying the claim." And: "The tort of bad faith arises when the insurance company intentionally denies, fails to process or pay a claim without a reasonable basis for such action."

Rawlings v. Apodaca, Docket 18333-PR (Arizona Supreme Court, 1986) supplied the duty: neither party may "act to impair the right of the other to receive the benefits which flow from their agreement," and the insurer must give "equal thought to the end that both the insured and the insurer shall be protected."

Deese v. State Farm, Docket CV-91-0323-PR (Arizona Supreme Court, 2 October 1992) removed the assumption that a denial is required: breach of an express covenant is not a prerequisite, and the covenant is breached "whether the carrier pays the claim or not, when its conduct damages the very security which the insured sought to gain by buying insurance." Deese frames liability as turning on "whether a claim was properly investigated and whether the results of that investigation were reasonably reviewed and evaluated."

Zilisch v. State Farm, Docket CV-98-0535-PR (Arizona Supreme Court, 3 March 2000) is the controlling first-party standard and the one to memorize: "while fair debatability is a necessary condition to avoid a claim of bad faith, it is not always a sufficient condition," and "coming up with an amount that is within the range of possibility is not an absolute defense to a bad faith case." The insurer must play fairly with its insured.

Put the four together and the Arizona rule is about process, not outcome. An insurer that lands on a defensible number by an indefensible route is exposed. Fair debatability is a shield only if the investigation and evaluation behind it were reasonable — which is precisely why R20-6-801(C)'s reconstruction standard and the itemization duty matter so much.

Punitive damages require more. The claimant must prove an "evil mind" — that the defendant intended to injure the plaintiff, or consciously pursued a course of conduct knowing it created a substantial risk of significant harm — by clear and convincing evidence. Bad faith alone does not put punitive damages before a jury.

The limitations period for first-party bad faith is two years, and it accrues on the original denial. Asking the insurer to reconsider does not restart it.

You Cannot Be Sued Personally, and Arizona Has Said So Twice

In Arizona the answer to "can an adjuster be sued personally for bad faith" is no, and unlike most states there is authority on it.

Meineke v. GAB Business Services, Docket 1 CA-CV 98-0623 (Arizona Court of Appeals, 13 July 1999) held that an independent adjusting company retained by an insurer owes no independent duty to the insured. The adjuster's obligation is measured by its contract with the insurer and is owed to the insurer. With no contractual relationship between the adjuster and the insured, there is no negligence claim and no bad-faith claim against the adjuster.

Wagner v. Arizona Municipal Risk Retention Pool, Docket 1 CA-CV 24-0562 (Arizona Court of Appeals, 7 January 2026) applied the same principle to a third-party claims administrator, holding it "was neither directly liable to Wagner nor engaged in a joint venture" with the risk pool, and stating the rule broadly: "a contractual nexus is a necessary element to any bad faith claim."

Twenty-seven years apart, pointing the same way. The exposure lands on the insurer, vicariously.

Note what this does not mean. Your exposure is regulatory rather than civil. The imported discipline provisions — § 20-295's denial, suspension, revocation and civil penalty, and § 20-456's cease and desist and civil penalty — attach to you personally regardless of whether a claimant could ever sue you. And from 12 September 2026 three statutory conduct prohibitions attach to you personally as well.

A third-party claimant also has no direct bad-faith action against the insurer. The insurer's duty runs to its insured. The standard workaround in Arizona practice is a stipulated judgment with an assignment of the insured's rights, which is why an adjuster handling a liability claim should treat the insured's exposure to an excess judgment as the real risk.

And one trap with a very short fuse. Wagner held that a municipal risk retention pool is a public entity for the purposes of A.R.S. § 12-821.01, so the claims were time-barred for failure to serve a notice of claim within 180 days. An adjuster handling a claim involving an Arizona municipal risk pool is working against a 180-day notice clock, not the two-year bad-faith period.

A Tort State, Pure Comparative Fault, and Stacking by Default

Arizona is a traditional at-fault state. There is no mandatory personal injury protection and no mandatory medical payments coverage. Medical payments coverage exists as an optional coverage — § 20-259.01(J) refers to a lien under it — but nothing requires it.

Minimum liability limits are $25,000 per person / $50,000 per accident / $15,000 property damage for policies issued or renewed beginning 1 July 2020, under § 28-4009. Policies issued or renewed on or before 30 June 2020 carry the prior $15,000 / $30,000 / $10,000. The dates are written into the operative text of the statute rather than into a separate effective-date section.

Comparative negligence is PURE. § 12-2505(A): "the claimant's action is not barred, but the full damages shall be reduced in proportion to the relative degree of the claimant's fault." There is no 50% or 51% bar — a claimant ninety percent at fault still recovers ten percent. The one exception denies comparative negligence to a claimant who "intentionally, wilfully or wantonly" caused or contributed to the injury.

Joint and several liability is abolished. § 12-2506(A): liability is "several only and is not joint," each defendant liable only "in direct proportion to that defendant's percentage of fault." Fault is apportioned among the claimant, all defendants and nonparties "as a whole at one time by the trier of fact" — nonparty fault counts where the claimant settled with them or the defendant gave pretrial notice. Three carve-outs preserve joint liability: parties acting in concert, an agent or servant relationship, and duties created by the Federal Employers' Liability Act.

Uninsured and underinsured motorist coverage must be offered in writing, in limits not less than the policy's bodily injury liability limits, on a form approved by the director. A producer using that form "satisfies the insurance producer's standard of care." No offer form is required where the insured buys coverage equal to the liability limits, and the declarations page "constitutes the final expression of the named insured's decision to purchase or reject" the coverage.

The underinsured trigger is damages-based, not difference-in-limits, and this is commonly mis-taught. § 20-259.01(G) applies UIM where "the sum of the limits of liability under all bodily injury or death liability bonds and liability insurance policies applicable at the time of the accident is less than the total damages." Arizona compares the tortfeasor's limits to the claimant's damages — not to the UIM limit.

Stacking is permitted by default. Franklin v. CSAA General Insurance Co., Docket CV-22-0266-CQ (Arizona Supreme Court, 28 July 2023), held that "§ 20-259.01 mandates that a single policy insuring multiple vehicles provides different UIM coverages for each vehicle." To limit stacking the insurer must do two things: "(1) expressly and plainly limit stacking in the policy and (2) satisfy the notice requirement informing the insured of their 'right to select one policy or coverage' either in the policy itself or in writing to the insured within thirty days after the insurer is notified of the accident."

Salvage branding has no percentage, and the trigger is subjective. § 28-2091 defines a salvage vehicle as one damaged "to the extent that the owner, leasing company, financial institution or insurance company considers it uneconomical to repair." No percentage of any kind appears in the section. Where an insurer acquires the vehicle as a result of a total loss insurance settlement, it must apply for the salvage title within thirty days after the certificate of title is properly assigned.

A Borrowed Standard Fire Policy, No Valued Policy Law, and No Depreciating Labor

Arizona has a standard fire policy, but it does not print its own form. § 20-1503 provides that no fire policy covering Arizona property may be issued "unless it conforms as to all provisions and the sequence thereof with the basic policy commonly known as the New York standard fire policy, edition of 1943," which is then "designated as the Arizona standard fire policy." The director must file and maintain a true copy bearing an authenticating certificate and signature. A terrorism exclusion is permitted.

Because the form is incorporated by reference rather than reprinted, its terms — including its suit clause — come from the incorporated document rather than from an Arizona instrument. No time-to-sue period appears anywhere in §§ 20-1501 to 20-1510. If a suit-clause period matters to a file, read the policy and, where it is load-bearing, the director's filed copy.

The fire article does not reach everything. § 20-1501 excludes vehicle, casualty, inland marine and ocean marine insurance, and reinsurance.

There is no valued policy law. The fire article runs §§ 20-1501 through 20-1510 and contains no provision requiring payment of the face amount on a total loss. Arizona settles a total loss on the policy's own valuation terms.

A policy may contractually shorten the time to sue. Zuckerman v. Transamerica Insurance Co. (Arizona Supreme Court, 1982) permits shortened suit clauses — commonly one year on homeowners forms and two on commercial — subject to estoppel where enforcement "would work an unjust forfeiture," absent prejudice from the delay.

There is no matching rule. Neither the fire article nor the administrative code requires a reasonably uniform appearance. The phrase "like kind and quality" appears in R20-6-801 only in the automobile total-loss provision.

But labor may not be depreciated. Walker v. Auto-Owners Insurance Co., Docket CV-21-0236-CQ (Arizona Supreme Court, 27 September 2022), answered a certified question: where a policy adopts the replacement-cost-less-depreciation methodology, "the insurer is precluded from depreciating labor" in determining actual cash value, and the broad evidence rule does not apply. ⚠️ The holding is policy-language-dependent — the court expressly did "not bar application of the broad evidence rule where the terms of the policy do not dictate otherwise." Read the valuation clause before applying it.

Cancellation and nonrenewal run on three separate regimes and they do not share periods. Personal auto (§§ 20-1631 to 20-1632.01): cancellation 10 days, nonrenewal 45 days, nonpayment a 7-day grace period, with a 60-day underwriting window after which cancellation is limited to enumerated grounds. Residential property (§§ 20-1651 to 20-1656): nonrenewal 30 days, and ⚠️ no statutory notice period for cancellation at all — § 20-1653 requires the notice to be written and to state the specific facts, but sets no day count. Commercial (§§ 20-1671 to 20-1677): cancellation 45 days, nonpayment 10 days, nonrenewal 45 days, and 30 days for a premium increase, deductible change, reduction in limits or substantial reduction in coverage.

The Guaranty Fund, and a Fraud Warning Arizona Does Require

The Arizona Property and Casualty Insurance Guaranty Fund is in Title 20, Chapter 3, Article 6, §§ 20-661 to 20-680. Its limits are in § 20-667, and the operative sentence is one long clause worth reading in full:

"Except for obligations arising out of a covered workers' compensation claim for benefits under title 23, chapter 6, such obligation shall include only that amount of each covered claim that is more than one hundred dollars and that is less than three hundred thousand dollars or an amount of more than twenty-five dollars but not exceeding ten thousand dollars for a covered claim for the return of unearned premiums."

Three figures and an exception. The per-claim cap is $300,000. Arizona kept the model act's $100 claimant deductible — many states dropped it, and charts recording Arizona as having none are wrong. Unearned premium claims are covered above $25 and up to $10,000. And workers' compensation claims sit outside the $300,000 cap entirely, because the sentence opens by excepting them.

The fund is never obligated "in any amount in excess of the face amount of the policy from which the claim arises," and there is no net worth exclusion — the concept does not appear in §§ 20-661, 20-667 or 20-673.

§ 20-673 requires exhaustion first. A claimant must "exhaust first all rights" under any other applicable policy; recovery is reduced by the other recovery; the insolvent insurer's policy "shall be deemed to be excess coverage"; and exhaustion means payment of the applicable policy limits or an adjudication by a court of record that no benefits are owed.

On fraud, Arizona reverses the usual expectation twice — in opposite directions.

The reporting duty is mandatory but has no deadline. § 20-466(G): an insurer that believes a fraudulent claim has been or is being made shall send information to the director on a prescribed form. No number of days appears anywhere in § 20-466, and no rule supplies one. Most states set thirty or sixty; Arizona sets the duty without the clock.

But a fraud warning statement IS required, and that is where many states go the other way. § 20-466.03 requires claim forms provided by an insurer to "include" in substance, in at least twelve point type: "For your protection Arizona law requires the following statement to appear on this form. Any person who knowingly presents a false or fraudulent claim for payment of a loss is subject to criminal and civil penalties." ⚠️ It applies to CLAIM FORMS, not to applications — a narrower reach than many states. § 20-466(K) gives good-faith immunity from civil and criminal liability for reporting, and fraud unit investigators hold the law enforcement powers of a peace officer. Violating § 20-463 or § 20-463.01 with intent to defraud an insurer is a class 6 felony under § 20-466.01.

Monthly Benefits, and a Twenty-One-Day Clock With Teeth

A pure workers' compensation adjuster needs no Arizona adjuster license — see the exclusion section above. But an adjuster handling any property or casualty work alongside comp does, and needs to know the comp regime regardless.

⚠️ Arizona states compensation MONTHLY. There is no Arizona maximum weekly rate, and converting to a weekly figure will produce a number that appears nowhere in Arizona law.

The statutory maximum average monthly wage for injuries sustained in 2026 is $6,131.00. The figure resets annually and is published by the Industrial Commission of Arizona.

It keys to the date of injury. Every row of the Commission's table is captioned "For Injuries Sustained On or After," and benefits rest on the employee's average monthly wage at the time of the industrial injury. Two open files in the same office can therefore carry different maximums.

The escalator is statutory rather than a legislative act each year. § 23-1041(E) directs the Commission to adopt an amount adjusted "to reflect the annual percentage increase in the bureau of labor statistics employment cost index for the prior calendar year," and provides that it "shall not decrease… or increase more than five per cent from the prior year." A figure that moved more than five percent in a year is wrong on its face.

The waiting period is seven days, and it goes retroactive at two weeks. § 23-1062: "Compensation shall not be paid for the first seven days after the injury. If the incapacity extends beyond the period of seven days, compensation shall begin on the eighth day after the injury, but if the disability continues for one week beyond such seven days, compensation shall be computed from the date of the injury."

Notice and filing. The employee reports "forthwith" under § 23-908 — no fixed day count — and the employer must inform its carrier and the Commission within ten days of receiving notice. The claim itself must be filed within one year after the injury occurred or the right accrued, subject to a discovery rule running from when the injury becomes manifest or the claimant knows or should know they have sustained a compensable injury.

⚠️ And the carrier's decision clock is twenty-one days, with automatic acceptance as the sanction. § 23-1061: "If the insurance carrier or self-insurer does not issue a notice of claim status denying the claim within twenty-one days after the date the insurance carrier is notified by the commission of a claim or of a petition to reopen, the insurance carrier shall pay immediately compensation as if the claim were accepted." Note that the clock runs from notification by the Commission, not from the employer's or claimant's notice — and that it applies to petitions to reopen as well as to new claims.

Two Acts Take Effect on 12 September 2026

Arizona's 2026 legislature passed two acts amending the adjuster article, and both take effect on 12 September 2026 — the general effective date published by the Legislature for the 57th Legislature's Second Regular Session. Neither carries an emergency clause or a delayed date.

Because neither act is yet in force, neither appears in the published Arizona Revised Statutes or in any commercial reproduction. They are law; they are simply not codified yet. An adjuster licensed today should expect the regime below to govern for essentially the whole of their four-year term.

Chapter 157 (Senate Bill 1206), "storm related insurance claims; adjusters," approved 19 June 2026, amends §§ 20-321, 20-321.02 and 32-1158.02.

First, it adds a defined term and renumbers the definitions. A new § 20-321(1) provides that "adjust" means to investigate or negotiate the settlement of a claim arising pursuant to a property and casualty insurance contract. Inserting it at (1) pushes "adjuster" from (1) to (2), and every subsequent definition down one. ⚠️ Every pin cite into § 20-321 written before that date is off by one afterwards — including the workers' compensation exclusion, which moves from § 20-321(1)(b)(ix) to § 20-321(2)(b)(ix).

Second, it expands who is an adjuster. A new limb reaches a person who "directly or indirectly solicits business from, investigates or advises an insured about claims arising pursuant to property and casualty insurance contracts for a person that performs services" as an adjuster. The door-knocker and the canvasser are brought inside the license. The nine exclusions at (b) are unchanged.

Third — and this is the substantive change — § 20-321.02 gains the first statutory conduct rules Arizona has ever imposed on adjusters. (B) an adjuster may not propose or attempt to propose to represent an insured "while a loss-producing occurrence is continuing at the damaged premises or while the fire department or any other public safety service is engaged in a public safety emergency response at the damaged premises." (C) an adjuster may not participate, directly or indirectly, including as contractor or subcontractor, in the restoration, reconstruction or repair of property that is the subject of a claim the adjuster adjusts. (D) an adjuster may not endorse payment instruments issued to an insured "without the insured's direct endorsement and signature."

The same act closes the loophole from the contractor side. Under amended § 32-1158.02 a post-storm contractor may not also act as an adjuster on behalf of the insured for the claim, may not advertise to pay, pay or promise to pay any deductible or issue any rebate deductible, and may not propose that a person sign an agreement while a loss-producing occurrence is continuing or public safety is responding — with a carve-out for maintaining essential services or preventing further immediate damage. The existing consumer protections remain: cancellation within 72 hours after the insurer denies the claim, cancellation for any reason within four business days, refund within ten days, and a down payment capped at 50%.

Chapter 11 (Senate Bill 1415), "insurance adjuster license; eligibility," approved 2 April 2026, adds § 20-321.03 — a narrow licensing window that closes on 30 June 2027. A salaried employee of an insurer or managing general agent may be licensed without taking Arizona's examination if: they are an Arizona resident who held an active designated home state adjuster license in another state before 1 January 2026; that license is in good standing; they qualified for it by passing a state-approved examination; and they apply with the fee and fingerprints on or before 30 June 2027. The resulting license is restricted — the holder may only adjust as a salaried employee, may not adjust on behalf of an insured, and the license is "valid and renewable only for as long as and until the time the person ceases to adjust claims as a salaried employee" of that insurer or managing general agent.

Reading Arizona Law Without Getting Burned

Arizona publishes its statutes cleanly, but it omits the one thing most currency checks depend on, and that shapes how you verify anything in this guide.

⚠️ Arizona statute pages carry no history line. The Legislature's own section pages print the text and nothing else — no source note, no "amended by Laws YYYY, Ch. NNN," no effective-date stamp. The commercial reproductions print none for Title 20 either. You cannot date an Arizona figure from the section it sits in.

The consequence is that dating requires the session-law route. The Legislature publishes every chaptered act of a session, and each act's operative title line lists the sections it amends. That is the only exhaustive way to know whether a section moved.

⚠️ And the codified text can be correct and still be behind the law. Arizona's general effective date for the 2026 session is 12 September 2026. Two acts amending the adjuster article were signed in April and June 2026 and are not in the code, because they are not yet in force. A currency check performed against the statute — however official the source — would report that Arizona's adjuster law had not changed. It has; it simply has not commenced.

Free codifications lag further still. The widely used commercial reproductions of the Arizona Revised Statutes are stamped 2025 and 1 January 2025, so neither carries any part of the 2026 session.

The administrative code is the better-behaved publisher. The Secretary of State publishes Title 20, Chapter 6 with a supplement stamp — currently Supp. 26-1, 31 March 2026 — and prints a Historical Note under every rule. R20-6-801's records its 1982 adoption, its 1995 recodification, a 2022 style update, and an amendment effective 7 January 2024. ⚠️ Two widely used rule mirrors disagree about that amendment, and the chapter itself carries an editor's note recording that the effective date was published incorrectly and later corrected. For a rule, read the Historical Note on the official code.

Three questions to ask of any Arizona citation. Is the source the Legislature's own site or the Secretary of State's administrative code, rather than a commercial reproduction? For a statute, have you checked the current session's chaptered acts, since the section itself will not tell you? And for a rule, does the Historical Note name an amendment you were not expecting?

Quick Reference

Official Links