Ken Paxton
Consumer Protection

"Loss Consultants" Usually Unnecessary

In the wake of the hurricanes of 2005, many consumers face the disheartening task of rebuilding or repairing homes that have been destroyed or damaged by floods, rain, wind or vandalism. If you are in this position, you may be solicited by a "public adjuster" or "loss consultant" who offers to help you with your claim against your insurance company. Be on guard against any such company or person who solicits your business through unsolicited e-mails, direct mail advertising or telemarketing.

Also be aware that public insurance adjusters must be licensed in Texas to assist on Texas insurance claims, and that these individuals will charge you money for their services either as a direct fee or as a percentage of any claim settlement. The Texas Department of Insurance regulates the conduct and licensing of public insurance adjusters and how much public insurance adjusters can charge. Some basic information is available at TDI Commissioner Mike Geeslin has also issued a bulletin with regard to public insurance adjusters and Hurricane Rita at

At the very least, make sure the public adjuster is licensed in Texas, that the fees are within TDI regulations, and that you read the fine print about what the charges and services will be. You should also discuss your claim with your insurance company to determine whether you can reach a satisfactory settlement before committing to hiring outside consultants or adjusters. If your claim is for significant money over your deductible, and you believe you are not being offered a fair deal by your insurer, you may wish to speak with a qualified private attorney of your choice about your options. Public insurance adjusters or "loss consultants" are usually not licensed attorneys and cannot give legal advice or represent you as an attorney on your claim.

Remember that the Texas Department of Insurance provides a toll-free consumer hotline at (800) 252-3439 to answer your questions and has a wealth of information on public insurance adjusters on its website at You can also speak with a private attorney or file a complaint with TDI if you do not feel that your insurance company is paying what they should on your policy. Most consumers do not need to pay a consultant or public adjuster to obtain the amount owed to them under their policies. I would urge you to avoid sharing your much needed settlement with a third party if you can reach a satisfactory settlement on your own.

ABOUT CONSUMER ALERTS - The Office of the Attorney General accepts consumer complaints about businesses. When a pattern of complaints warrants intervention, the Attorney General can file a civil lawsuit under consumer protection statutes, sometimes with the result that a company is required to pay restitution to consumers -- see our Major Lawsuits page. However, when a consumer is swindled by a con artist, filing a complaint cannot help. Civil litigation can sometimes put a very unscrupulous business out of action, but often cannot produce restitution.

Individual con artists generally fall under the jurisdiction of a criminal prosecutor -- in Texas, this is the district or county attorney. But even when they are charged and convicted, these individuals usually have spent the money as fast as they have stolen it. A person who is the victim of fraud should report the incident to the police or sheriff. But by far the best thing is for consumers to be aware of fraud, so they are not swindled in the first place. For this reason, the Office of the Attorney General posts these Consumer Alerts about possible scams and schemes that come to our attention through citizen contacts to our office or other sources.