Insurance Adjuster Licensing Reciprocity – What You Need to Know

As most claims personnel already know, having a current license to handle files in your state is essential to your employment. While the test to become a licensed adjuster can be somewhat brutal, it is passable with enough study time and tenacity.

But what do you do if you decide to move to another location or your firm takes on claims from another state? Here are a few things you need to know about insurance licensing reciprocity.

What is Licensing Reciprocity and Who is It Beneficial For?

The basis behind licensing reciprocity is simple—having an insurance claims license in one state helps you obtain one in a second state. The thought behind this is that if you’ve already taken the time to learn insurance regulation for one location, gone through the testing process, and passed, that you are likely to repeat the process in a new area.

This is primarily beneficial for those who move to a new area due to family reasons, find another job in a different state, or simply work for a large insurer who handle claims for a multitude of regions out of one central office.

Where You Live Matters

When it comes to reciprocal licensing, where you live matters more than where you hold an insurance license. This means that most state insurance departments differentiate between “home state” and other areas you hold licenses.

For example, if you live in Arizona and have a license to handle claims in this area, it is your home state. But if you also have a license in Oklahoma to handle claims, you are considered a non-resident adjuster in that area. If you want to move to another state, such as Texas, you would have to ensure that Texas had reciprocity with Arizona—not Oklahoma. (Hint: It does.)

Reciprocity Does Not Mean You Don’t Have to Apply or Follow Regulation

Another thing to know about reciprocal licensing is that it does not mean you don’t have to apply for a license. Rather, it allows you to bypass taking a pre-licensing course and/or exam. You will still be required to pass any pertinent background checks, fill out a questionnaire, and pay an annual fee. In some areas, you might also be required to be bonded for a certain amount. However, the time saved by not having to sit in a class or study course materials and the ability to refrain from having to take an exam is usually a positive aspect for most adjusters.

Some States Are Somewhat Better for Reciprocity

It’s true that some states are somewhat better for reciprocal licensing. The Department of Insurance in each state is ultimately responsible for determining which licenses they accept on a reciprocal basis, as not all states work together. This means that it is better to move to an area that offers reciprocity with a larger number of other states in order to ensure that your license is valid in the new location. It also requires you to double check who your current home state has reciprocity with before you try to make a license change.

Not All States Require Licensing and Not All States Are Reciprocal

It is also important to note that not all states require licensing and not all states are reciprocal. Colorado, Illinois, Iowa, Kansas, Maryland, Missouri, Nebraska, New Jersey, North Dakota, Ohio, Pennsylvania, South Dakota, Tennessee, Virginia, Wisconsin, and the District of Columbia do not require adjuster licensing. In addition, California, Hawaii, and New York do not offer reciprocal licensing for adjusters and require that you start the process from scratch after moving.

Reciprocal insurance licensing can be a great bonus when starting a job in a new area. However, it is important to not assume anything and instead determine your options by talking to the Department of Insurance in each location.