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Chapter 0157 - 572R - H Ver of SB1206
House Engrossed
Senate Bill
storm
related insurance claims
(now: storm related
insurance claims; adjusters)
State of Arizona
Senate
Fifty-seventh Legislature
Second Regular Session
2026
CHAPTER 157
SENATE BILL 1206
AN
ACT
Amending sections 20-321, 20-321.02
and 32-1158.02, Arizona Revised Statutes; relating to insurance claims.
(TEXT OF BILL BEGINS ON NEXT PAGE)
Be it enacted by the Legislature of the State of Arizona:
Section 1. Section 20-321, Arizona Revised
Statutes, is amended to read:
START_STATUTE
20-321.
Definitions
In this article, unless the context otherwise requires:
1. "Adjust" means to
investigate or negotiate the settlement of a claim arising pursuant to a
property and casualty insurance contract.
1.
2.
"Adjuster":
(a) Means any person who for compensation, fee or
commission
either
does any of the following
:
(i)
Adjusts, investigates or
negotiates settlement of claims arising under property and casualty insurance
contracts
adjusts claims
on behalf of either the
insurer or the insured.
(ii) Holds oneself out to perform a service listed
in item (i) of this subdivision.
(
iii
) Directly
or indirectly solicits business from, investigates or advises an insured about
claims arising pursuant to property and casualty insurance contracts
for a person that performs services pursuant to item (
i
) of this subdivision.
(b) Does not include:
(i) A licensed attorney-at-law who is
qualified to practice law in this state.
(ii) A salaried employee of an insurer or of a
managing general agent. For the purposes of this item,
"salaried employee" means an employee whose compensation is not
contingent on the outcome of a claim determination.
(iii) A licensed insurance producer who adjusts or
assists in adjustment of losses arising under policies procured through the
insurance producer.
(iv) An employee of a political subdivision who
adjusts or assists in the adjustment of losses arising under policies covering
the political subdivision or persons indemnified by the political subdivision.
(v) An independent contractor retained by a licensed
adjuster or a person listed in items (i), (ii), (iii) and (iv) of this
subdivision for the sole purpose of providing technical assistance in
connection with a claim. Independent contractors may include
photographers, estimators, engineers, private detectives or handwriting
experts.
(vi) An individual who collects claim information
from or furnishes claim information to insureds or claimants and who conducts
data entry, including entering data into an automated claims adjudication
system, if not more than twenty-five persons, as described in this item,
are under the supervision of a single licensed adjuster or licensed producer.
(vii) A licensed
insurance producer who supervises or adjusts claims pursuant to item (vi) of
this subdivision.
(viii) Registered
third-party administrators and their employees who are engaged in
administering accident and health or life insurance claims.
(ix) An individual who adjusts, investigates or
negotiates settlement of only workers' compensation claims.
2.
3.
"Automated
claims adjudication system" means a preprogrammed computer system that is
designed for the collection, data entry, calculation and final resolution of
portable consumer electronic products insurance claims and that:
(a) May be used only by a licensed adjuster, a
licensed producer or supervised individuals operating pursuant to this
paragraph.
(b) Must comply with all claims payment requirements
under this title and be certified as compliant by a licensed adjuster.
3.
4.
"Portable
consumer electronic products" means electronic devices and related
accessories that are portable in nature.
END_STATUTE
Sec. 2. Section 20-321.02, Arizona Revised
Statutes, is amended to read:
START_STATUTE
20-321.02.
Application of other laws
A.
To the extent
permitted
allowed
by this article,
sections 20-281 and 20-284, section 20-286, subsections B, C
and D, sections 20-287, 20-288, 20-289 and 20-289.01, section
20-290, subsection A and sections 20-291, 20-292, 20-295, 20-296,
20-297, 20-299, 20-301 and 20-302 apply to adjusters.
B.
An adjuster
may not propose or attempt to propose to any
insured that
the adjuster
represents the insured While a loss-producing
occurrence is continuing at the damaged premises or While the fire department
or any other public safety service is engaged in a public safety emergency
response at the damaged premises.
c.
An adjuster
may not participate either directly or indirectly, including as contractor or
subcontractor, in the restoration, reconstruction or repair of any damaged
premises or PROPERTY that is the subject of a claim adjusted by the adjuster.
D. An adjuster may not endorse
payment instruments issued to an insured as a result of a claim arising under
an insurance contract without the insured's direct endorsement and signature.
END_STATUTE
Sec. 3. Section 32-1158.02, Arizona Revised
Statutes, is amended to read:
START_STATUTE
32-1158.02.
Residential
construction contracts
A. For residential repair or replacement of damage
resulting directly from a catastrophic storm in a specific area that is
designated by an insurer, in addition to the requirements of section 32-1158,
a licensed contractor who enters into a contract for the repair or replacement
of a residential roof or other repair or replacement within the scope of the
regulation of this chapter with a purchaser who resides in the residence or who
intends to reside in the residence after the completion of the contract shall
include
in the contract
at least the following
provisions:
1. A statement in at least ten-point bold type in
substantially the following form: "You may cancel this contract
at any time within seventy-two hours after you have been notified that
your insurer has denied your claim to pay for the goods and services to be
provided under this contract."
2. A statement in at least ten-point bold type in
substantially the following form: "You may cancel this contract
at any time, for any reason, within four business days after signing this
contract."
3. A copy of a repair estimate that contains the
following disclosures:
(a) A precise description and location of all damage
claimed on the repair estimate.
(b) For roofing repair or replacement, a detailed
description of the work to be done
,
including the square
footage of the repair area or the replacement area.
(c) If the damaged areas are not included in the
repair estimate, a specification of those areas and any reason for their
exclusion from the repair estimate.
(d) Whether or not the property was inspected before
the preparation of the estimate and the nature of that inspection, specifically
whether the roof was physically accessed.
(e) That a contractor has made no assurances that
the claimed loss will be covered by an insurance policy.
(f) That the policyholder is responsible for payment
for any work performed if the insurer should deny payment or coverage for any
part of the loss.
B. A residential owner of a property or casualty
insurance policy has the right to cancel the contract described in subsection A
of this section within seventy-two hours after the insured owner has been
notified by the insurer that the claim has been denied.
C. In addition to the right prescribed in subsection
B of this section, the insured owner of a residence has the right to cancel the
contract described in subsection A of this section for any reason within four
business days after signing the contract. A cancellation shall be
evidenced by the insured owner giving written notice of cancellation to the
contractor's address stated in the contract. Notice of cancellation
does not need to be in a particular form
,
except that the
notice must indicate in writing the intent of the insured owner not to be bound
by the contract.
D. Within ten days
after a contract has been canceled pursuant to this section, the contractor
must tender to the insured owner any payments made by the insured owner and any
note or other evidence of indebtedness
,
except that if
the contractor has performed any emergency services, the contractor is entitled
to receive reasonable compensation for the services if the insured owner has
received a detailed description and itemization of the charges for those
services.
E. The down payment section on the execution of a
contract entered into pursuant to this section shall not require more than
fifty
per cent
percent
of the total
contract.
F. Any changes, additions or deletions to the work
order specified in the original contract shall be included in a written change
order that is signed by the homeowner.
G. A contractor shall immediately notify and
disclose in writing to the residential owner of a property or casualty
insurance policy any cancellation of the contractor's workers' compensation
coverage.
H. A contractor's failure to comply with this
section is grounds for license suspension or revocation pursuant to section 32-1154.
I. An individual or contractor who prepares a repair
estimate for post-storm repair or replacement services as described in
subsection A of this section in anticipation of making an insurance claim must
disclose the following information to the insured owner:
1. A precise description and location of all damage
claimed or included on the repair estimate.
2. Documentation to support the damage claimed on
the estimate, including photographs, digital images or another medium.
3. A detailed description and itemization of any
emergency repairs already completed by the contractor.
4. If damaged areas are not included in the repair
estimate, a specification of those areas and any reason for their exclusion
from the repair estimate.
5. A provision stating whether
or not
the property was inspected before the preparation of the estimate, if the
contract is a contract for repair or replacement of a roof, and whether the
roof was physically accessed.
6. A provision stating that the contractor has made
no assurances that the claimed loss will be covered by an insurance policy.
J. If an insured owner submits a claim with the
insurer for residential repair or replacement pursuant to this section, the
contractor
may not advertise to pay, issue payment for or
promise to pay any deductible payable on the policy or issue any rebate
DEDUCTIBLE either directly or indirectly and
may not begin work on the
repair or replacement until the insurer approves or denies the claim
,
except if the work is necessary to prevent further loss.
K. A person who is not licensed pursuant to this
chapter and who is not exempt from licensure pursuant to this chapter may not
bring a private cause of action to recover monies from a homeowner for any
residential repair or replacement that the person does pursuant to this
section.
L. Except as otherwise provided in this subsection,
a contractor providing post-storm repair or replacement contracting services
shall not
also
act
as an adjuster on
behalf of the insured for the claim, shall not act
on behalf of an
insured owner in
otherwise
negotiating for the settlement
of a claim for loss or damage under any policy of insurance covering the
insured owner's residence and shall not make any assurance that the proposed
repair or replacement contracting services will be covered by an insurance
policy. The contractor may communicate with an insurer to assist in
any claim disputes, including actual damages incurred, if both of the following
apply:
1. The insured owner gives the contractor
permission.
2. The contractor is not compensated for the
communication.
M. With a policyholder's written consent, an insurer
providing coverage for a post-storm residential repair or replacement may issue
its check in the name of both the policyholder and the contractor with the
contractor's license number issued pursuant to this chapter noted on the check.
N. This section
shall
does
not limit the following individuals from contacting and
negotiating with the insured owner:
1. A government official
who is
engaged
in the performance of official duties.
2. An attorney
who is
engaged
in the performance of professional duties.
3. Licensed insurers and licensed insurance
producers while engaged in the performance of their duties in connection with
insurance transactions.
4. Any salaried office employee
who
is
performing exclusively clerical or administrative duties and who is
not compensated in any manner for securing contracts related to post-storm
residential repair or replacement contracting.
5. Photographers, estimators, appraisers or
engineers
who are
employed exclusively for the purpose of
furnishing technical assistance.
6. A private investigator who is licensed pursuant
to chapter 24 of this title.
7. A full-time salaried employee of a property owner
or property management company who is retained by a property owner, who has not
been hired for the purpose of handling a specific claim resulting from a fire
or casualty loss and who acts at the sole discretion of the property owner or
management company regarding a claim related to the owner's property.
O. A
contractor may not propose to any person that the person sign an agreement for
work on any damaged premises while a loss-PRODUCING occurrence is continuing at
the damaged premises or while the fire department or any other public safety service
is engaged in a public safety emergency RESPONSE at the damaged
premises.
This subsection DOES NOT PREVENT A
CONTRACTOR FROM PROVIDING SERVICES TO A HOMEOWNER IN ORDER TO MAINTAIN OR
RESTORE ESSENTIAL SERVICES TO the premises OR TO PREVENT FURTHER IMMEDIATE DAMAGE
TO the premises.
END_STATUTE
APPROVED BY THE GOVERNOR JUNE 19, 2026.
FILED IN THE OFFICE OF THE SECRETARY OF STATE JUNE 22, 2026.