Texas Adjuster Insurance Exam 2026

Three Licenses, Not One

Texas does not issue a single adjuster license. 28 TAC § 19.602(a) approves three, and the relationship among them is the first thing to get right.

The three are all lines; property, casualty, and surety; and workers' compensation, employer's liability, USL&H. The rule then defines the first in terms of the other two: all lines is issued to those adjusters who qualify in paragraphs (2) and (3).

So all lines is not a bigger license sitting above property and casualty. It is the two narrower lines held together. The consequence catches experienced adjusters moving into the state: a Texas property, casualty, and surety license does not authorize you to adjust workers' compensation. In most states one property and casualty adjuster license covers comp as a matter of course. In Texas comp is a separate qualification, and you either hold it or you do not.

The reverse surprise is pleasant. The standalone workers' compensation license carries employer's liability and USL&H with it, which is broader than the comp authority most states attach.

The governing statute is Tex. Ins. Code ch. 4101. Public adjusters are licensed under a wholly separate chapter, ch. 4102, with different qualifications, different waivers and different prohibitions. The two chapters diverge more than their shared vocabulary suggests, and this guide keeps them apart deliberately.

The Definition, and the Two Numbers Inside the Exemptions

§ 4101.001(a)(1) defines an adjuster in three prongs, and each is a separate route into the license.

Prong (A) is the familiar one: a person who investigates or adjusts losses on behalf of an insurer, as an independent contractor or as an employee of an adjustment bureau, an association, a property and casualty agent, an independent contractor, an insurer, or a managing general agent. Prong (B) is the one people miss: supervises the handling of claims. A claims supervisor who never opens a file personally is an adjuster in Texas. And § 4101.001(b) adds that for this chapter, insurer includes a self-insured, so a self-insured employer's in-house claims supervisor is inside the Act.

Prong (C) pulls workers' compensation in expressly, and § 4101.002(c) closes the escape hatch: comp claims, including claims relating to services through a certified workers' compensation health care network, do not constitute claims arising under life, accident, or health insurance policies. Without that subsection a comp medical claim could have been argued into the health exemption. It cannot be.

§ 4101.002(a) then exempts eleven categories, including the salaried insurer employee not regularly engaged in claims; the person employed only to furnish technical assistance to a licensed adjuster, a list that names attorneys, engineers, estimators, handwriting experts, photographers and private detectives; the agent processing an undisputed or uncontested loss under a policy the agent issued; the person handling life, accident and health claims; the fraud investigator who does not adjust losses or determine claims payments; and the public adjuster licensed under ch. 4102.

Two of the exemptions carry hard numbers. § 4101.002(a)(10) exempts the person who enters claim data into an automated claims adjudication system, but only where no more than 25 individuals doing that work are supervised by a single licensed independent adjuster or a single licensed agent. Cross the ratio and every one of them needs a license. § 4101.002(a)(11) exempts the insurer employee who adjusts a first-party property and casualty loss not exceeding $500, or authorizes payment where the specified coverage limit is $500 or less. Note that it is drafted two ways: a small loss, or a small sublimit even where the loss is larger.

28 TAC § 19.603 supplies the definitions the statute leaves open. Regularly means acting as an adjuster as a routine part of established employment duties. And undisputed or uncontested losses means losses that do not involve negotiations between the parties on coverage, damage, or liability. That is a narrow gate. The agent exemption dies at the first negotiation over any one of those three, not at the point a claim becomes contentious.

Nonresidents Working a Catastrophe Are Exempt by Statute

This is the most commonly misreported rule about adjusting in Texas, and getting it wrong costs money in both directions.

§ 4101.002(b) says a nonresident adjuster is not required to hold a license under ch. 4101 to do any of three things: adjust a single loss in Texas; adjust losses arising out of a catastrophe common to all those losses; or act as a temporary substitute for a licensed adjuster.

Read what that subsection is. It is not a streamlined license, not a registration and not a courtesy. It is a flat statutory exemption from licensure, with no application, no fee, no sponsor and no time limit written into it. A nonresident adjuster deployed on a named storm is outside the licensing requirement by operation of the statute.

The 90-day emergency license under § 4101.101 is a different instrument entirely. It exists for the adjuster who wants a credential document rather than an exemption, most often because a carrier's vendor panel or an independent adjusting firm requires one before it will assign claims. Taking the emergency license is a commercial decision, not a legal necessity, for the nonresident whose work fits § 4101.002(b).

Note also that the exemption is nonresident only. A Texas resident cannot use it. A Texas resident adjusting a Texas catastrophe loss needs a license or an emergency license like any other file.

The 90-Day License, and Who Carries the Liability

§ 4101.101 requires the commissioner to issue an emergency license on application when a catastrophe or emergency arises out of a disaster, act of God, riot, civil commotion, conflagration, or other similar occurrence.

The clock runs in an unusual direction. The application must be certified to the commissioner not later than the fifth day after the date on which the person begins work as an adjuster. It counts forward from the day you start, not backward from a license date, which means you may lawfully begin adjusting and complete the paperwork behind you.

Certification comes from either a person who already holds a ch. 4101 license, or an insurer that maintains an office in Texas and holds a certificate of authority. And § 4101.101(b) attaches a real cost to that signature: the person or insurer that certifies the application is responsible for the loss or claims practices of the emergency license holder whom it certifies. Sponsoring an emergency adjuster is not a formality. It is an assumption of their claims-handling conduct.

The license runs 90 days, and the commissioner may extend it for one additional 90-day period. The statutory fee cap is $20, remitted not later than the 30th day after issuance, and TDI charges exactly that. There is no examination. The commissioner may issue it whether or not the applicant is a Texas resident and whether or not the applicant is otherwise licensed.

The commissioner may revoke an emergency license after notice and hearing on the ordinary § 4101.201 grounds. Emergency status buys speed, not immunity.

Chapter 4102 Is a Stricter World

Public adjusters are licensed under ch. 4102, not ch. 4101, and Texas holds them to conditions the ordinary adjuster never sees.

§ 4102.001(3) reaches anyone who, for direct, indirect, or any other compensation, acts for an insured in negotiating or effecting settlement of a property claim, or assists another public adjuster in doing so. It also reaches, as a standalone prong, a person who advertises, solicits business, or holds himself or herself out to the public as an adjuster of property claims. You can become a public adjuster by advertising alone.

The commission cap is 10 percent of the insurance settlement, and § 4102.104(a) permits an hourly fee, a flat rate, a percentage or another method so long as the total stays under the cap. Then § 4102.104(b) switches the percentage off entirely: no percentage commission is permitted on a claim where the insurer, not later than 72 hours after the loss is reported, either pays or commits in writing to pay the policy limit in accordance with § 862.053. On such a claim the public adjuster may bill time spent and expenses only. The logic tracks the valued policy law: if fire destroys the building and the carrier commits to the face amount within three days, the statute already fixed the number and there is no percentage to take.

Two further payment rules are absolute. Every person paying policy proceeds must include the insured as a payee and require the insured's written signature and endorsement. And § 4102.104(e): notwithstanding any authorization the insured may have given, a public adjuster may not sign and endorse any payment draft or check on behalf of an insured. A power of attorney does not cure it.

The contract is regulated down to the typography. § 4102.103 requires a written contract on a commissioner-approved form, executed in duplicate, containing a 72-hour written rescission right and a prominently displayed notice in 12-point boldface type reading WE REPRESENT THE INSURED ONLY. A copy stays on file in Texas and must be available at all times for inspection, without notice. Note that ch. 4102 contains two separate 72-hour clocks measured from different events: rescission runs from signature, the policy-limit rule runs from the report of loss.

Solicitation is fenced. § 4102.151 forbids soliciting a client during the progress of a loss-producing natural disaster occurrence, and § 4102.152 confines solicitation to 9 a.m. to 9 p.m. on a weekday or Saturday and noon to 9 p.m. on Sunday, though the licensee may always accept contact the insured initiates.

Texas Closed the Contractor Loophole From Both Ends

Texas passed two contractor bars in the same 2013 act, and they have deliberately different scopes. Adjusters routinely know one and not the other.

§ 4101.251 binds the adjuster working for the insurer, and it is roofing-specific. A licensed adjuster may not adjust a loss related to roofing damage on behalf of an insurer if the adjuster is a roofing contractor, otherwise provides roofing services or products for compensation, or is a controlling person in a roofing-related business. Subsection (b) runs the other way: a roofing contractor may not act as an adjuster or advertise to adjust claims for property it is providing or may provide roofing services for, regardless of whether the contractor holds a license under this chapter.

§ 4102.163 binds the public adjuster, and it reaches all contracting, not just roofing. A contractor may not act as a public adjuster or advertise to adjust claims for any property for which the contractor is providing or may provide contracting services, regardless of whether the contractor holds a license under this chapter or is authorized to act on behalf of the insured under a power of attorney or other agreement.

Both provisions say the same thing about the obvious workaround: holding the license does not save you. And § 4102.163 adds that an assignment of benefits or power of attorney does not either. Texas anticipated the paperwork and wrote past it.

§ 4102.158 completes the fence for public adjusters, forbidding any direct or indirect participation in the reconstruction, repair or restoration of property under a claim they adjust, and any remuneration from or financial interest in a salvage, repair or construction firm that gets work through such a claim. Acquiring an interest in salvage requires the insured's knowledge and consent in writing.

Two Different Texas Adjuster Exams, and Only One Is Yours

Almost every summary of the Texas adjuster exam mixes together specifications from two different instruments. Separating them resolves nearly every conflicting number you will encounter.

The state licensing examination is delivered by Pearson VUE. The all lines exam is exam code InsTX-ALAdj16, 150 questions, 150 minutes, $49. Property and casualty is InsTX-PCA81 on the same specification. Workers' compensation is InsTX-WCAdj32, 60 questions in 60 minutes, $29. The public insurance adjuster exam is InsTX-PbAdj17, 100 questions in 120 minutes, $39. Spanish-language versions of all four exist under their own codes at the same specification.

Texas splits this information across two documents, which is why it looks contradictory. The Candidate Handbook carries exam codes, times and fees but has no question-count column at all. The separate Content Outlines publication carries the question counts and the topic weights. Neither contains the other's numbers, and a reader who consults only one will conclude the other figure is unpublished.

The passing score is 70, and it is a scaled score. The handbook is explicit that scores range from 0 to 100 and that the reported figure is neither the number of questions you answered correctly nor the percentage of questions you answered correctly. A 68 does not mean 68 percent. Arithmetic of the form 105 correct out of 150 is not how this exam is scored.

Retakes are generous. A candidate who fails can schedule a new exam within one day, and there is no limit to the number of attempts. Candidates leave the test center with their official scores in hand.

The prelicensing course examination is the other instrument, governed by 28 TAC § 19.1017. It is the test you take at the end of a TDI-certified 40-hour course, and passing it is what lets you skip the state exam. It is also 150 questions for all lines and property and casualty, and 60 for workers' compensation, so the counts match. Everything else differs: the time limit is less than 180 minutes, the passing standard is 70 percent of questions answered correctly as a raw score, at least 70 percent of the questions must be at the application level or higher, and it is closed book with no course materials, personal notes, or any other written or electronic material permitted.

One current point worth knowing: Pearson VUE's content outlines publication does contain revised outlines for exams taken on or after 1 September 2026, but only for Life-General Knowledge, Life Agent, and Life and Health-General Knowledge. No adjuster examination is affected.

Only One Fifth of the Exam Is Texas Law

28 TAC § 19.1018 sets the content outline for the adjuster prelicensing examination, and Pearson VUE publishes the same structure for the state examination. The weighting surprises most candidates.

General property insurance product knowledge, 40 percent. Broken down: standard fire policy 3 percent; auto liability including the Texas personal auto policy 3 percent; personal lines coverage including ISO forms and the Texas HO-A, HO-B and HO-C forms 10 percent; commercial lines coverage 10 percent; inland marine 2 percent; ocean marine 2 percent; additional coverages, exclusions and extensions 7 percent; bonds 3 percent.

Insurance terms and related concepts, 40 percent. This is the largest single block on the exam and it is pure vocabulary and doctrine: peril, waiver and non-waiver agreements, depreciation, categories of liability, methods of loss valuation, measures of damages, policy provisions.

Texas statutes and rules pertinent to property and casualty adjusting, 20 percent. Licensing requirements 7 percent; marketing practices 7 percent; adjuster practices, responsibilities and duties 3 percent; workers' compensation 3 percent.

So four fifths of the all lines exam is national product knowledge and terminology, and only one fifth is Texas law. A candidate who prepares by memorizing the Insurance Code has studied for about 30 of 150 questions. That is the single most common preparation error in this state.

The workers' compensation adjuster exam inverts the ratio completely: insurance terms and concepts 16 percent, policy provisions 8 percent, and Texas comp material 76 percent, of which workers' compensation itself is 55 percent.

One detail in the outline is a signal in its own right. It still names HO-A, HO-B and HO-C by their Texas promulgated-form designations. Those are the pre-2003 promulgated forms preserved by a grandfather clause, and the exam outline is telling you they remain in circulation on Texas roofs today.

The Course Does Not Waive Examination

Texas offers four routes past the state examination, and the most popular of them is universally described in a way the statute does not support.

The four, from 28 TAC § 19.602(b) and TDI's own license pages: you hold the CPCU designation; you hold the Associate in Claims (AIC) designation; you completed a TDI-approved course or training program in adjusting losses within the last 12 months; or your license has been expired more than 90 days but less than one year. A separate statutory route at § 4101.056(a)(3) covers an adjuster licensed in a state with which the commissioner has a reciprocal agreement, and TDI states it as holding a license in good standing in a reciprocal state.

Here is the correction. The approved-course route is § 4101.056(a)(4), and it does not waive examination. Read to the end of the paragraph: the applicant must have completed the course and passed an examination, certified to the commissioner, testing the applicant's knowledge and qualification. § 4101.056(b) then requires the applicant to schedule the required examination and take it in a testing environment that is controlled, supervised, and proctored by a disinterested third party approved by the commissioner.

§ 4101.056(c) defines disinterested third party with unusual precision: an individual not related to the applicant by consanguinity or affinity as a first cousin or within the third degree, and not an employee or a subordinate of the applicant. That proctoring machinery was added by the 83rd Legislature in 2013 and it is not decorative.

So the accurate statement is that the approved course substitutes one proctored examination for another. It exempts you from the department's exam at Pearson VUE and requires you to pass the course exam under third-party proctoring instead. Anyone describing it as take the course and skip the test is describing something that does not exist.

Two things follow. The CPCU and AIC routes are creatures of rule, not statute; they appear in 28 TAC § 19.602(b) and nowhere in the Insurance Code, so TDI could amend them without a legislative session. And public adjusters get none of this. § 4102.058 offers exactly one exemption, reciprocity, in two paragraphs. No CPCU, no AIC, no course route. Four waivers for the ordinary adjuster, one for the public adjuster, in the same state.

Qualifications, Fingerprints and the One-Year Link

§ 4101.053(a) sets the individual qualifications: at least 18 years of age; resides in Texas or in a state or country that permits a Texas resident to act as an adjuster there; compliance with federal law on employment or transacting business if you do not reside in the United States; trustworthy; and experience, special education, or training of sufficient duration and extent in handling loss claims to make you competent. Then you must pass the examination or be exempt.

Note the residency test. Texas does not simply ask whether you live in Texas; it asks whether your state permits a Texas resident to act as an adjuster there. It is a reciprocity-of-permission test written into the qualification list.

Note also what is absent. There is no felony bar in § 4101.053. Compare the public adjuster provision at § 4102.053(a)(5), which imposes one expressly. A felony conviction reaches the ch. 4101 adjuster through § 4005.101(b)(8) as a ground for denial or discipline, which is a discretionary determination, not a categorical statutory disqualification.

Fingerprints. § 4001.103 says the department may deny an application if the applicant fails to provide a complete set of fingerprints on request. Operationally TDI issues a fingerprint service code through its online initial application portal, and you complete the capture at IdentoGO and submit the receipt to the Texas Department of Public Safety. You are exempt if you already hold an active Texas license or registration and have already submitted prints. A nonresident with an active home-state resident license may instead supply criminal history records or a current Certificate of Good Standing.

The exam and the application are linked by a one-year clock. TDI: submit your application through Sircon within one year of passing the exam, or you will need to retake the exam. The clock runs the other way too, expensively. Applying before you pass means reapplying afterward and paying the $50 a second time.

§ 4101.058 requires the license itself to carry your name, your business address, the dates of issuance and expiration, and the name of the firm or insurer with whom the adjuster is employed at the time the license is issued.

Agency licenses. A business entity qualifies under § 4101.053(c) by being eligible to designate Texas as its home state, being trustworthy, and designating a licensed adjuster responsible for the entity's compliance with Texas insurance law. TDI calls this the designated responsible licensed person, and requires that person to hold a Texas all lines adjuster license with the same authority as the agency. The agency must also show registration with the Texas Secretary of State and proof of financial responsibility, a bond or an errors and omissions policy.

Designated home state. If you live in a state that does not license adjusters at all, Texas offers the DHS all lines license and you designate Texas as your home state. If your own state does license adjusters, TDI will decline the application and will not refund the fees.

Your Birthday, Not Your Anniversary

This is the Texas rule most likely to cost a working adjuster a lapsed license, because every commercial summary reports it wrongly.

§ 4003.001(a) contains two different expiration architectures in one subsection, and which one applies to you depends on whether you are a person or a company.

A business entity license expires on the second anniversary of the date the license is issued or renewed. A clean 24 months.

An individual license expires on the license holder's birthday, in the even-numbered or odd-numbered year matching the year the license was issued or renewed. If you were licensed in an even-numbered year, it expires on your birthday in each even-numbered year; licensed in an odd year, your birthday in each odd year.

The practical consequence is that an individual Texas adjuster license is almost never exactly two years long, and the first term least of all. Licensed on 3 March 2026 with a birthday of 11 November, your license runs to 11 November 2028, roughly 32 months. Licensed the same day with a birthday of 1 February, it runs to 1 February 2028, roughly 23 months. Same license, same issue date, nine months of difference.

Two riders make it sharper. § 4003.001(c): if you hold more than one Texas license, all of them expire on the earliest expiration date among them. And § 4003.001(d): the commissioner may not prorate the initial application fee for the shortened period that results. You pay the full fee for a truncated first term.

TDI must send written notice of impending expiration not later than the 30th day before the license expires, under § 4003.003. Do not rely on it. The notice goes to the last mailing address in the department's records, and § 4001.252(a) requires you to report a change of mailing address, and failing to do so is itself a fineable violation under § 4005.109(b)(2).

Public adjusters ride the same rule through § 4102.062, with one extra pinch: § 4102.064(b) requires the renewal application, the CE evidence and the fee to be in not later than the 30th day before the anniversary date. Chapter 4101 imposes no such early deadline.

The 90-Day and One-Year Cliffs

Texas builds a three-step ladder, and the steps are set out consistently in § 4003.007, § 4101.057(b) and 28 TAC § 19.602(d) and (e).

Expired 90 days or less. You may renew. Cost is the renewal fee plus an additional fee equal to one-half of it. No examination.

Expired more than 90 days but less than one year. You may not renew, but you are entitled to a new license without taking the examination. Cost is the license fee plus one-half of it again. The no-exam entitlement here is the fourth waiver route in 28 TAC § 19.602(b)(4). Operationally TDI has you file through Sircon under New Adjuster License, pay $50, attach the IdentoGO fingerprint receipt and pay a $25 late fee.

Expired one year or more. You may not renew, and the examination waiver is gone. You must submit to reexamination and comply with the full original-licensure process. 28 TAC § 19.602(e) adds a detail that catches people: the reexamination must be completed within the 12 months preceding the application, which is the same one-year clock that governs a first-time applicant.

One route survives the one-year cliff. § 4003.008 lets the department renew without reexamination the expired license of a person who was licensed in Texas, moved to another state, and is currently licensed and has been in continual practice in that other state up to and including the application date. The fee equals the license application fee. If you left Texas and kept working, say so rather than assuming you are starting over.

While a renewal is being processed you are not unlicensed. § 4003.006 keeps the original license in effect from the date the renewal application is filed until TDI issues the renewal, or the license is not renewed for a CE failure under § 4004.055, or the commissioner revokes it.

Finally, moving states carries its own 30-day duty. § 4003.009 requires you to file your new address and proof of authorization to do business in the new state of residence not later than the 30th day after moving, and TDI may not charge a fee or require a license application for it.

What the Caps Say and What You Actually Pay

§ 4101.057 sets caps, not prices, and the difference matters when you meet a summary quoting the ceiling.

The statute caps the license application fee at not to exceed $50, the examination fee at not to exceed $50, and directs the department to set and collect a duplicate license fee. Fees are nonrefundable and are deposited to the Texas Department of Insurance operating account.

The live figures: $50 application for a resident, nonresident, agency or designated home state adjuster license. $25 late fee on reinstatement after 90 days. $20 for the emergency adjuster license, which is also the statutory cap in § 4101.101(e). And the examination is $49 for all lines and property and casualty, $29 for workers' compensation, $39 for the public insurance adjuster exam, paid to Pearson VUE at reservation by credit card, debit card, voucher or electronic check.

So the exam fee sits one dollar under its statutory ceiling. A guide that reports fifty dollars is quoting the cap.

Costs that are real but not fixed in any published table: the IdentoGO fingerprint capture fee, and the transaction fee Sircon or NIPR adds on top of the state fee. Neither is set by TDI and neither is included in the figures above.

Veterans can be reimbursed the fees for exams taken on or after 1 February 2019.

Public adjusters carry one further recurring cost. § 4102.105 makes proof of financial responsibility a continuing condition of licensure, in an amount set by rule, covering any judgment against the adjuster by an insured based on error, omission, fraud, negligent act, or unfair practice. The commissioner may accept a surety bond or a professional liability policy. TDI's live requirement is a surety bond of $10,000 or more on Form FIN509, with the applicant as sole principal.

24 Hours, and the Half You Cannot Take at Home

§ 4101.059 is only a pointer. It says an adjuster must participate in a continuing education program under Chapter 4004, and every number lives in that chapter.

§ 4004.053(a) requires 24 hours during the license period for an adjuster license. It also caps stacking: if you hold more than one license requiring CE, you are not required to complete more than 24 hours for all licenses in the period. § 4004.054 requires three hours in ethics each renewal period, and the three sit inside the 24, not on top of it.

§ 4004.051(c) is the provision most often dropped from summaries: at least 50 percent of all required continuing education hours must be completed in a classroom setting or a classroom equivalent setting approved by the department. So at least 12 of the 24 cannot be self-study. TDI puts it plainly: not all self-study hours will apply. All hours must be completed before the expiration date, under § 4004.051(b).

§ 4004.105 dictates the content. An adjuster CE program must include education relating to ch. 541, ch. 547, Subchapter A of ch. 542, and Subchapter E of ch. 17 of the Business and Commerce Code, the Texas Deceptive Trade Practices Act, plus any similar laws the department specifies.

The nonresident rule splits three ways, and Texas inverts the usual answer for one license type. TDI: if you hold a Texas designated home state adjuster license, you follow Texas rules. If you hold any other nonresident license, you follow your home state's rules. And if your state does not require continuing education at all, you follow Texas rules. The statutory hook is § 4101.060(c), which lets the department waive CE for a nonresident whose home state has substantially equivalent requirements. A designated home state holder gets no waiver because, by definition, the state they live in requires nothing equivalent.

The exemptions. § 4004.052(b) exempts an individual who has continuously held a license for at least 20 years, applied for through Sircon, and TDI conditions it on having met the CE rules for all prior terms. § 4004.255 withdraws the exemption for annuities, long-term care partnership and Medicare-related products. § 4004.052(a) allows an extension or exemption for illness, medical disability or another extenuating circumstance beyond your control, and TDI adds military duty. § 4004.0535 grants up to four hours for active membership in a state or national insurance association on a sworn affirmation, but those hours may not satisfy the classroom minimum or the ethics requirement.

§ 4101.062 adds a route worth knowing. TDI shall accept a claims certification earned during the license period in place of the CE requirement, if it is issued by a national or state claims association, requires at least as many hours as ch. 4004 does, covers the § 4004.105 content, and the association is a TDI-approved provider that reports completion and gives TDI portal access to your transcript. The verb is shall, not may.

Miss it and the arithmetic is brutal. TDI charges $50 for each hour not completed by the day your license expires. § 4004.055(a) bars renewal unless the hours are completed not later than the 90th day after the end of the licensing period and the fines are paid. And § 4004.055(c) forecloses the obvious argument: completing CE after expiration is not a defense in a disciplinary action.

The debt follows you, not the license. TDI states that CE obligations apply to the individual, not the license, and that no license of any type will issue until every missing hour and every fine related to your name is cleared. You cannot let a license lapse to walk away from a CE deficit. Keep your certificates: TDI audits the past two license periods, so hold them four years, and note that repeating the same course in one term earns credit once.

The Grounds Are in Chapter 4005, Not Chapter 4101

§ 4101.201 looks like the disciplinary provision and contains no grounds at all. It says the commissioner may discipline an adjuster under a department rule or any applicable insurance law of this state, and that department rules may specify grounds comparable to grounds for discipline of other license holders. The actual list is elsewhere.

§ 4005.101(b) supplies eleven grounds, including willful violation of a Texas insurance law; an intentional material misstatement in the license application; obtaining a license by fraud or misrepresentation; misappropriating, converting to one's own use, or illegally withholding money belonging to an insurer, a health maintenance organization, or an insured, enrollee or beneficiary; fraudulent or dishonest acts or practices; materially misrepresenting policy terms; twisting; conviction of a felony; and offering a rebate.

§ 4005.102 lists the remedies: deny the application; suspend, revoke, or deny renewal; place a suspended licensee on probation; assess an administrative penalty; reprimand; or require requalification for a product certificate. § 4005.103 lets the commissioner condition probation on regular reporting, a restricted scope of practice, or continued professional education until skill is satisfactory. § 4005.104 entitles you to a hearing before the State Office of Administrative Hearings.

§ 4005.105(b) bars reapplication before the fifth anniversary of a denial or revocation, or of a final court order affirming it. But § 4005.105(d) carves out three situations: failure to pass a required written examination, failure to complete CE or pay a CE fine, and failure to submit a properly completed application. That carve-out is what makes the CE ladder survivable rather than career-ending.

§ 4005.106 imposes a separate five-year bar on anyone the department determines acted as an agent without a license, solicited without appointment, placed business with an unauthorized insurer without a surplus lines license, or knowingly appointed an unlicensed agent.

Three provisions close the usual exits. § 4005.107: TDI may proceed against a former license holder for conduct before a voluntary surrender or forfeiture, and surrendering does not affect culpability. § 4101.202: no reinstatement or reissuance until the commissioner determines the cause no longer exists, which is a status test that stacks on top of the five-year clock rather than replacing it. And § 4005.151: acting as an agent after suspension or revocation is a felony of the third degree.

Criminal exposure for adjusters themselves: § 4101.203 makes unlicensed practice, or working outside a limited license, a misdemeanor punishable by a fine of not more than $500, county jail for not more than six months, or both. For public adjusters § 4102.206(a) grades any violation of ch. 4102 as a Class B misdemeanor, and § 4102.204 allows an administrative penalty of not more than $2,000 per violation in lieu of suspension or revocation.

No General Business Practice Element, and a Deliberate Unit Switch

Chapter 541 is the Texas unfair methods and deceptive acts statute, and it differs from the national model in a way that matters enormously to an individual adjuster.

There is no general business practice element. The NAIC Unfair Claims Settlement Practices Act, and most states following it, require a claimant to show the insurer committed the act with such frequency as to indicate a general business practice. Texas does not. A single act supports the ch. 541 private cause of action.

And adjusters are personally exposed. The definition of person in § 541.002(2) names adjusters expressly, which is why an individual adjuster can be named as a defendant under ch. 541 in the first place. Damages are actual damages, and the trier of fact may award up to treble damages on a finding that the defendant acted knowingly. A claimant must give 61 days of presuit notice, and failure to give it supports abatement. Limitations run two years, extendable 180 days for good cause.

Chapter 542 Subchapter B sets the prompt-payment clocks, and the units change from step to step on purpose.

§ 542.055: acknowledge the claim, commence the investigation and request the items you need within 15 calendar days. § 542.056: notify the claimant in writing of acceptance or rejection within 15 business days after receiving all items required to secure final proof of loss, 30 days if arson is suspected. If you cannot, you must notify the claimant within that same period of the reasons you need more time, and then accept or reject not later than the 45th day after that notice. § 542.057: pay within 5 business days of the notice of acceptance. § 542.058: delay beyond 60 days after receiving all reasonably requested items triggers damages.

Read the units. Fifteen calendar to acknowledge, fifteen business to accept or reject, five business to pay, and the extensions in calendar days. Then contrast ch. 551, where every cancellation and nonrenewal count is calendar. Texas is inconsistent across chapters by design, and the only safe method is to read the specific section rather than carry a habit across.

§ 542.056 also requires that a rejection state the reasons for the rejection. A denial letter that does not is a violation independent of whether the denial was right.

The Election That Dismisses You With Prejudice

Chapter 542A governs a first-party claim for damage to real property caused wholly or partly by forces of nature, which means wind, hail, rain, lightning, flood, earthquake and the like. If you adjust property in Texas, most of your exposure sits in this chapter, and it works unlike anything in another state.

§ 542A.006 lets the insurer elect to accept whatever liability its agent might have. An agent here includes the adjuster. If the insurer makes that election before the claimant sues, no cause of action exists against the adjuster and any suit filed against them shall be dismissed with prejudice. If the claimant has already sued and the insurer elects afterward, the court shall dismiss all the same.

And the election cannot be undone. § 542A.006(f): an insurer may not revoke, and a court may not nullify, an election. That is a permanent extinguishment of the individual adjuster's personal exposure on that claim, which is a protection adjusters in other states simply do not have.

But your conduct is still tried. § 542A.006(g) preserves evidence of the agent's acts or omissions for trial and requires a judgment against the insurer to include any liability that would have been the adjuster's. Your file, your notes, your photographs and your estimate remain the evidence. You are out of the caption and still on trial in substance. And § 542A.006(i) provides that in a jury trial the election may not be made known to the jury, so the jury never learns why your name left the case.

Three limits on the election. § 542A.006(h): an insurer in receivership may not make one. § 542A.006(d): an insurer that elects but then fails to make the adjuster available at a reasonable time and place to give a deposition faces consequences, subject to three defenses, so expect to be deposed even after dismissal. § 542A.006(e): an election conditioned in a way that would let the insurer avoid liability is ineffective.

Chapter 542A also changed the money. § 542.060 still imposes 18 percent a year as damages plus reasonable and necessary attorney's fees for a prompt-payment violation. But for a claim to which ch. 542A applies, the 2017 amendment substitutes simple interest at the rate determined on the date of judgment by adding five percent to the rate under Finance Code § 304.003, accruing from the date the claim was required to be paid. Two different prompt-payment interest regimes in one section, and the hail-and-wind rate is the floating one.

§ 542A.007 caps the claimant's attorney's fees by a ratio: divide the amount awarded in the judgment by the amount alleged to be owed in the presuit notice. At 0.8 or above, full fees. Below 0.2, the court may not award fees at all. In between, the fees are multiplied by the ratio. The presuit demand is the denominator, so an inflated demand mathematically destroys the claimant's own fee recovery. That is why your early evaluation and reserve documentation carry weight far beyond the file.

Forms, Valuation and the New Appraisal Statute

Texas has no mandatory standard fire policy. Forms run on file and approve with a 60-day deemer under § 2301.006: a filed form is approved at the expiration of 60 days unless the commissioner acts, and the commissioner may extend by not more than 10 days. § 2301.008 says the commissioner may adopt standard forms that an insurer may use instead of its own. Two permissives in one sentence, so the TDI standard forms are a safe harbor, not a prescription.

§ 2301.052(b) is why you will still see legacy forms. An insurer may continue to use a form promulgated or approved under Article 5.06 or 5.35 before 11 June 2003 on written notification to the commissioner. That grandfather is why the promulgated Texas HO-A, HO-B and HO-C and the standard Texas personal auto policy remain in circulation alongside modern proprietary forms, and coverage differs materially between them on the same street.

Texas has a valued policy law, and it is narrow. § 862.053(a): a fire insurance policy, in case of a total loss by fire, shall be held to be a liquidated demand against the company for the full amount of such policy, and this subsection does not apply to personal property. Fire only, total loss only, real property only. Within those limits the face amount is conclusive and the carrier cannot litigate actual value downward.

Texas has no matching statute. There is no requirement to replace undamaged adjacent materials for a reasonably uniform appearance. Matching is governed entirely by the policy wording, the like kind and quality or uniform appearance language of whichever form is in play, and the case law construing it. Because of the 2003 grandfather, the answer can differ between a legacy promulgated form and a modern proprietary form on the same claim type.

Suit limitations. The default is four years under CPRC § 16.051 because breach of an insurance contract has no express period. CPRC § 16.070 makes any contractual limitations period shorter than two years void. The one exception is § 2301.010, for windstorm and hail in the catastrophe area, where the period may not end before the earlier of two years from acceptance or rejection or three years from the date of loss, and the policy may require the claim be filed within one year of the loss subject to good cause, with written disclosure at issuance and renewal.

Appraisal became statutory during 2025 and 2026. New ch. 1813, added by S.B. 458 of the 89th Legislature effective 1 September 2025, requires a personal automobile or residential property policy to contain an appraisal provision. It applies to stock and mutual companies, county mutuals, Lloyd's plans, reciprocals, farm mutuals, eligible surplus lines insurers where Texas is the insured's home state, and the FAIR Plan Association. It expressly does not apply to TWIA or to a commercial policy. TDI's bulletin B-0012-25 states the mandate applies to forms issued or renewed after 1 January 2026. § 1813.004(b): except for fraud, accident, or material mistake, or an award made without authority, the amount of loss determined by appraisal is binding on both sides. So for personal auto and residential property appraisal is now a statutory right; for commercial property and TWIA it remains purely a policy condition.

Cancellation and nonrenewal, ch. 551, all calendar days. Commercial: cancellation 10 days notice; nonrenewal 60 days, and if the nonrenewal notice is late the coverage remains in effect until the 61st day after it is sent; mid-term cancellation only within the first 60 days of the initial term, with any-time exceptions for fraud, nonpayment, an increase in hazard within the insured's control, and loss of reinsurance. Personal: cancellation takes effect on the 10th day after mailing; nonrenewal 60 days; and § 551.104 opens by saying an insurer may cancel a policy only as provided by this section.

Brainard, the Offset, and the Total Loss With No Percentage

Minimum limits are 30/60/25, effective 1 January 2011 under Tex. Transp. Code § 601.072, and insurance is compulsory under § 601.051. Driving without it is a misdemeanor punishable by a fine of $175 to $350 on a first offense and $350 to $1,000 on repeat.

PIP is offer and reject, and the rejection must be in writing. § 1952.152 requires the insurer to provide personal injury protection unless a named insured rejects the coverage in writing, and § 1952.153 sets the required amount at no more than $2,500 per person. Covered expenses must be incurred not later than the third anniversary of the accident.

Uninsured and underinsured motorist coverage is also offer and reject with written rejection, under § 1952.101. Three Texas rules then depart sharply from the national pattern. § 1952.106 makes UIM an offset, not excess coverage, and the offset is by amounts recovered or recoverable from the tortfeasor's insurer, so a claimant who settles below the tortfeasor's limits still absorbs the full available limit as a credit. § 1952.104 mandates anti-stacking in the form itself, requiring that regardless of the number of persons insured, policies, vehicles involved or claims made, the aggregate limit for one person from a single occurrence may not exceed the policy limit. And the same section requires actual physical contact between an unknown vehicle and the insured or the insured's property, which is a hard bar on phantom-vehicle hit and run claims.

Brainard v. Trinity Universal Ins. Co. is the single most consequential Texas decision for a claims professional. The Supreme Court of Texas held that the UIM insurer is under no contractual duty to pay benefits until the insured obtains a judgment establishing the liability and underinsured status of the other motorist, and that neither requesting UIM benefits nor filing suit against the insurer triggers a contractual duty to pay.

What follows for the adjuster. Until the insured has a judgment fixing the tortfeasor's negligence, the damages and the underinsured status, declining to pay is not a breach and not late payment, the ch. 542 prompt-payment clock does not start because the claim is not presented, and attorney's fees are not recoverable on demand and suit alone. What does not follow is a coverage position. Brainard is a payment-timing rule. The carrier must still investigate and evaluate in good faith, and telling an insured to go get a judgment as though it were a denial converts a timing rule into a bad-faith problem.

Comparative responsibility bars a claimant whose share is greater than 50 percent, under CPRC § 33.001. Read the words: greater than. A claimant found exactly 50 percent responsible recovers, reduced by half. It is a 51 percent bar, not a 50 percent bar. And the comparison is the claimant's own single percentage against the whole, not against any individual defendant, so a plaintiff who is 40 percent at fault still recovers against three defendants at 20 percent each.

Texas has no total loss percentage. Transp. Code § 501.091 defines a salvage motor vehicle by whether the cost of repairs exceeds the actual cash value of the vehicle immediately before the damage, and it excludes two things from the numerator: materials and labor for repainting, and sales tax on the total cost of repairs. There is no 70, 75, 80 or 100 percent rule to apply. Because repaint and tax come out of the calculation, an estimate that nominally exceeds actual cash value can still fall below the statutory threshold.

The Reporting Duty Is Yours Personally

§ 701.051 imposes the reporting duty on a person, not on an insurer, and Texas defines person broadly enough at § 701.001(4) to include an individual. So the duty is yours, personally, alongside your employer's.

The trigger and the clock: not later than the 30th day after the date the person makes the determination or reasonably suspects that a fraudulent insurance act has been or is about to be committed in this state, the person shall report the information in writing to the insurance fraud unit of the department, in the format prescribed by the fraud unit or by the NAIC.

Three features of that sentence carry the weight. The clock starts at reasonable suspicion, which is far below proof. The duty reaches conduct about to be committed, not just completed fraud. And the discharge is a written report to the TDI fraud unit, not a conversation with your supervisor and not a referral to your own special investigation unit. § 701.051(c) does allow you to authorize an anti-fraud organization to report on your behalf, but adds that you retain any liability resulting from that organization's failure to report properly.

§ 701.052 grants broad but conditional immunity. A person is not liable in a civil action, including an action for libel or slander, for furnishing information about a suspected, anticipated, or completed fraudulent insurance act to an authorized governmental agency, TDI, a law enforcement officer, the NAIC, a state or federal agency, a special investigative unit of an insurer including a contracted SIU vendor, or an anti-fraud organization. You may furnish it orally or in writing. The condition: the immunity does not apply to a person who acts with malice, fraudulent intent, or bad faith. And there is a sweetener, a person covered by the immunity who prevails in a civil action is entitled to attorney's fees and costs.

The fraud warning statement is the classic misreported Texas answer, and neither one-word answer is right. § 704.002 requires the warning on a claim form, in comparative prominence with the other content on the form, in words substantially similar to a statement that any person who knowingly presents a false or fraudulent claim for payment of a loss is guilty of a crime and may be subject to fines and confinement in state prison. But the duty falls only on a plan issuer, and § 704.001 defines that term in exactly three subdivisions: a health insurer, an approved nonprofit health corporation, or an insurer authorized to write workers' compensation.

So: required on health, HMO and workers' compensation claim forms. Silent for auto, homeowners, commercial property and general property and casualty claim forms, because those insurers are not plan issuers. Silent for applications in every line, because § 704.002 reaches only a form used to make or give notice of a claim. And expressly excluded for a claim against a policy issued by a reinsurer. Most property and casualty carriers print a warning voluntarily, which is lawful and sensible, but it is not a Texas mandate.

The same limitation runs through the rest of ch. 704. § 704.051 requires an antifraud plan only of a plan issuer that collects direct written premium, and § 704.053 makes filing it permissive, a plan issuer may annually file. A Texas property and casualty insurer is under no ch. 704 antifraud-plan mandate either.

Criminal grading. Penal Code § 35.02 ladders insurance fraud by the value of the claim: under $100 Class C; $100 to under $750 Class B; $750 to under $2,500 Class A; $2,500 to under $30,000 state jail felony; $30,000 to under $150,000 third degree; $150,000 to under $300,000 second degree; $300,000 or more first degree. Any amount becomes a first degree felony if an act committed in connection with the offense places a person at risk of death or serious bodily injury, and the kickback offense in subsection (a-1) is a state jail felony regardless of value. Restitution to the affected insurer, including court costs and attorney's fees, is mandatory. Note also the valid-portion offset: a defendant who proves by a preponderance which part of the claim was a genuine loss is graded on the padding only.

Elective Coverage, and Two Deadlines That Are Not Alike

Texas is the only state in the country that lets a private employer decline workers' compensation outright. Tex. Lab. Code § 406.002: except for public employers and as otherwise provided by law, an employer may elect to obtain workers' compensation insurance coverage. An employer that declines is a non-subscriber, and non-subscription is common enough in Texas that an adjuster will meet it regularly.

What the non-subscriber gives up is the three classic defenses. § 406.033(a): in an action by an employee not covered by workers' compensation, it is not a defense that the employee was guilty of contributory negligence, that the employee assumed the risk, or that the injury was caused by the negligence of a fellow employee. The employer keeps only two defenses under subsection (c), that the employee intended to bring about the injury or was intoxicated, and the plaintiff must still prove employer negligence under subsection (d).

Waivers are tightly controlled. A pre-injury waiver is void and unenforceable. A post-injury waiver requires all of: voluntary entry with knowledge of the effect; entry not earlier than the 10th business day after the initial report of injury; a prior medical evaluation from a nonemergency care doctor; a writing specifically stating the parties' true intent; and conspicuous waiver language in type larger than the body of the agreement or in contrasting colors.

The carrier faces two deadlines and they do very different work. § 409.021(a): not later than the 15th day after receiving written notice of an injury, the carrier must begin paying benefits or notify the division and the employee in writing of its refusal, advising of the right to a benefit review conference. Missing that is an administrative violation, but it does not waive the right to contest compensability. § 409.021(c): if the carrier does not contest compensability on or before the 60th day after being notified of the injury, it waives its right to contest compensability, reopenable only on a finding of evidence that could not reasonably have been discovered earlier.

So the 15-day miss costs a penalty and the 60-day miss costs the entire defense. Adjusters conflate them constantly. Carriers must also establish a single point of contact in the office for the injured employee.

Benefit rates run by fiscal year and lock on the date of injury. For injuries between 1 October 2025 and 30 September 2026 the state average weekly wage is $1,271.05, temporary income benefits run to a maximum of $1,271 and a minimum of $191, and impairment income benefits run to a maximum of $890 with the same $191 minimum. The prior year, for injuries from 1 October 2024, was $1,219 and $183 for TIBs and $853 and $183 for IIBs.

§ 408.061(g) and § 408.062(c) impose the date-of-injury lock: the maximum and minimum weekly income benefit in effect on the date of injury applies for the entire time income benefits are payable. Rates do not escalate on 1 October for an open claim. An employee injured on 15 September 2025 stays on the prior fiscal year figures for the life of the file even though new rates took effect a fortnight later. Adjust to the date of injury, never the date of payment.

The waiting period is one week. § 408.082: no income benefits for an injury that does not result in disability for at least one week, and benefits begin to accrue on the eighth day. But if the disability continues for two weeks or longer, compensation is computed from the date the disability begins, so the first week is paid retroactively. Medical benefits are not subject to the waiting period.

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