Surety Bond Encyclopedia

Private Insurance Adjuster ($2,000) Bond - Statewide in California

Brief Summary

Plenty of adjusters buy this bond when they do not need it. If you adjust claims under a qualified manager or a firm that already has a bond or certificate of insurance on file with the Department of Insurance, you are covered by theirs. If you are the one running the business, the $2,000 bond on form LIC 31A-14 is what lets the license issue, without tying up $2,000 in a cash deposit with the state.

California Insurance Code 14050 bars the Insurance Commissioner from issuing an insurance adjuster license until the applicant files a $2,000 surety bond conditioned on the faithful and honest conduct of business. The bond is filed with the California Department of Insurance on form LIC 31A-14, written by a California admitted surety, and taken in the name of the people of the State of California. Adjusters working under a qualified manager or firm that has already filed a bond or certificate of insurance are exempt.

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How to Apply for a Private Insurance Adjuster ($2,000) Bond:

Confirm you are not covered by a bond or certificate of insurance already filed by your qualified manager or firm.
Use the applicant's name exactly as it will appear on the CDI license.
Have a California admitted surety execute form LIC 31A-14 in the penal sum of $2,000.
File the bond with the California Department of Insurance with the license application.
If the bond will cover other adjusters, list every one on the Commissioner's form and report changes within 30 days.

Detailed Information About the California Private Insurance Adjuster ($2,000) Bond:

Check whether the bond is yours to file

Insurance Code 14050(b)(1) says a surety bond is not required for a licensed insurance adjuster, or an employee of a licensee, who adjusts claims on behalf of and under the direction of a qualified manager who has filed a surety bond or certificate of insurance. The same goes for adjusters, employees and qualified managers who adjust for an association, organization, partnership, limited liability company or corporation that has filed one. The bond or certificate on file has to list everyone who works under it on a form provided by the Commissioner, and changes to that list must be made within 30 days.

What the bond covers

The $2,000 bond is conditioned for the faithful and honest conduct of business by the licensee. Under section 14051 it runs in the name of the people of the state, and anyone injured by a willful, malicious or wrongful act of the adjuster can sue on the bond in their own name to recover damages.

Filing details

The Department of Insurance asks for a Bond of Insurance Adjuster, form LIC 31A-14, in the penal sum of $2,000, executed by a California admitted surety. Section 14053 allows a $2,000 cash deposit, or certain FDIC or NCUA insured bank, savings or credit union deposits, in place of the bond. Under section 14054 the bond stays in force until the surety ends future liability with 30 days notice to the Commissioner.

Keep it in force

Section 14052 requires the bond or certificate to be on file at all times. If it lapses the license is suspended immediately, and getting it back takes a new application and a new bond. The Commissioner can also refuse reinstatement if the adjuster kept working while suspended.

License basics

Licenses run for two years, starting on the issue date and ending on the last day of the same calendar month two years later. The CDI lists a $311 license application fee per qualified manager, a $79 exam fee and a $52 branch office certificate fee. It also requires two years of certified experience in the adjusting field, which it defines as 4,000 hours of compensated time.

Eligibility and Requirements for a California Private Insurance Adjuster ($2,000) Bond:

California admitted surety.
Penal sum of $2,000.
Bond taken in the name of the people of the State of California.
Form LIC 31A-14, Bond of Insurance Adjuster.
Bond kept on file at all times, since a lapse suspends the license immediately.

California Private Insurance Adjuster ($2,000) Bond FAQs:

I work for an adjusting firm. Do I need my own bond?

Not if the firm, or the qualified manager you work under, has filed a surety bond or certificate of insurance with the Department of Insurance and you are listed on it. Insurance Code 14050(b)(1) exempts you in that case.

Can I put up cash instead of a bond?

Yes. Insurance Code 14053 allows a $2,000 cash deposit with the State of California, or a $2,000 deposit in an FDIC insured bank or savings association or an NCUA insured credit union, in place of the bond.

What happens if my surety cancels?

The surety ends future liability with 30 days notice to the Commissioner. If no replacement bond or certificate is on file by then, section 14052 suspends the license immediately, and reinstatement requires a new application and a new bond.

Who can make a claim on the bond?

Any person injured by a willful, malicious or wrongful act of the adjuster can sue on the bond in their own name to recover the damages, under Insurance Code 14051.

How long does the license last?

Two years. The term starts on the issue date and ends on the last day of that same calendar month two years later. The CDI emails a courtesy renewal notice about 90 days ahead.