The Texas insurance adjuster license is easily the most sought after adjuster license in the country. Famed for its extremely high level of reciprocity with other states' licenses, the Texas adjuster license is often perceived as a cure-all to companies and independent adjusters looking for comprehensive licensure. But what are the real implications of becoming a licensed Texas adjuster and are the common representations accurate? Understanding the true reciprocal benefits of this license will enable companies to make sound licensing decisions for their staff adjusters and allow independent adjusters to maintain well-informed expectations and save time and money. Let's separate reality from common perception and demystify the nation's most coveted adjuster license.

License Overview

There are two types of multi-line adjuster licenses that may be obtained through the Texas Department of Insurance (TDI): the 1) all-lines license and b) property and casualty license. The all-lines designation enables licensees to handle residential, commercial, automobile, farm and ranch, inland marine, ocean marine, and worker's compensation claims. The property and casualty (P&C) license is different only in that it does not certify licensees to handle worker's compensation claims. For the purposes of property adjusters, particularly cat adjusters, these licenses are effectively the same. Another distinction regarding licensure is the resident vs. non-resident status of the license. While both certify its designees to work the exact same types of claims, there are absolutely crucial differences with regards to reciprocity that will be explained in greater detail below.

Obtaining the Texas Adjuster License

Obtaining your Texas adjuster license, be it all-lines or property and casualty, is ordinarily accomplished by taking either 1) the state exam administered by Prometric or 2) a certified pre-licensing course. The state exam is notoriously difficult and there is absolutely no guarantee of passing the exam. Many veterans within the insurance industry, counting on expertise in their particular field, have failed the exam owing to unexpected questions asked on more obscure lines such as farm and ranch and inland and ocean marine. The state exam must be scheduled with Prometric and exam study courses are available to assist in preparation. Pre-licensing courses are 40 hour classroom or online courses that are offered as substitutes for taking the state exam. The 40 hours consist of 30 "classroom" hours and 10 hours of self-study. An exam consisting of 150 questions is generally administered at the end of the course and serves as the culminating evaluation for the prospective adjusters.

The pre-licensing course satisfies all Texas Department of Insurance requirements for obtaining the Texas adjuster license. Once the state exam or a pre-licensing course is completed, students must still submit their application to the state. Application processing typically takes between 2 and 4 weeks. The application may require a criminal background check and fingerprinting for successful submission. Finally, any adjuster holding a CPCU or AIC designation is exempt from taking any course or exam and may immediately apply for licensure.

Reciprocity and the Texas License

The reciprocal benefits of the Texas adjuster license are poorly understood and inaccurately represented. One common misconception holds that once licensed as an adjuster in Texas you are automatically licensed in 32 other states as well. Other notions have it that the Texas license is reciprocal with every other state in the country or that it is by far the most reciprocal license. While certainly a powerful license, these statements incorrectly apply the principles of reciprocity and the scope of influence that this license truly has. The real answer, unfortunately, is slightly complex and, because each state's interpretation of reciprocity is different, varies from state to state. Nonetheless, coming to a correct understanding of the situation is vital and will prevent undue expense of time and money for companies and individuals alike.

First, what is reciprocity? Reciprocity, generally speaking, is the principle whereby the favors, benefits, designations, or penalties granted by one state to the residents of another state should be returned in kind. In the context of adjuster licensing, it means that if one state, say Florida, licenses adjusters already licensed in Texas, then Texas should do the same for those adjusters licensed in Florida. That is the basic principle. Most states, with the notable exceptions of Nevada, Hawaii, New York, Arizona, and South Carolina, are reciprocal with most other states that license adjusters.

The matter becomes complicated when dealing with non-resident licenses. Many states (Kansas, Missouri, Pennsylvania, Ohio, Illinois, and Colorado to name a few) do not require their adjusters to be licensed. Thus a twenty year adjuster from Kansas City wishing to become licensed in Georgia to work hurricane claims might have a problem because there is no license in Kansas for Georgia to be reciprocal with. A Texas non-resident license is then often turned to as a means of resolving this dilemma. The results can be disappointing. Georgia, like many other states, mandates that if you do not hold a resident license you must pass their exam before successfully applying for licensure. It is unfortunate that adjusters in states that don't require licenses are punished when it comes to reciprocal privileges. On the other hand states such as Georgia are merely trying to close reciprocal loopholes (i.e. Georgia residents attempting to get licensed in Georgia without taking the state exam by using a non-resident Texas adjuster license). There are, however, some states (i.e. Alabama) that aren't concerned whether your license is resident or non-resident.

The lesson to be learned is that the matter should be examined on a case by case basis and should consider a) your state of residence b) the licenses you hold and their resident/non-resident status and c) the policies by state of the licenses you wish to obtain. Again, merely holding a Texas license doesn't guarantee reciprocal licensure in most states. The most important consideration and the factor that will most influence the level of reciprocity to be enjoyed is the resident/non-resident factor. Adjusters holding resident licenses will be able to gain far greater reciprocal privileges than those holding non-resident licenses - regardless of the state.

Other benefits of the Texas License

There are other benefits, aside from reciprocity, to be gained by obtaining the Texas adjuster license. Within the independent insurance adjuster industry, and especially among cat (catastrophic) adjusters, the Texas adjuster license is probably the most widely recognized and respected of licenses. Many adjusting firms that contract IAs to work claims are based in Texas. Having this license may be even be mandatory as a prerequisite to employment in some cases, whether you are a resident of Texas or not.

Another benefit of this license is that it is relatively easy to obtain. Online licensing courses and an abundance of regularly scheduled classroom licensing courses are available for immediate registration. Most other states lack the educational resources and support for licensure that are hallmarks of the Texas Department of Insurance and its licenses.

If you are beginning your insurance adjuster career, be sure to check your state's adjuster licensing rules. Starting with the right license will get you started on the right foot!

ABOUT THE AUTHOR: Daniel Kerr has served as a career and training consultant for thousands of experienced and aspiring professionals in the insurance claims adjuster industry. In addition to his work as a catastrophic claims adjuster, Mr. Kerr is considered as one of the nation's foremost authorities on adjuster licensing and license reciprocity.