INS CD-PUBLIC ADJUSTERS & FEES

Illinois General Assembly - Full Text of SB3505

Select Language

×

The Illinois General Assembly offers the Google Translate™ service for visitor convenience. In no way should it be considered accurate as to the translation of any content herein.

Visitors of the Illinois General Assembly website are encouraged to use other translation services available on the internet.

The English language version is always the official and authoritative version of this website.

NOTE: To return to the original English language version, select the "Show Original" button on the Google Translate™ menu bar at the top of the window.

Choose Language

English

Afrikaans

Albanian

Arabic

Armenian

Azerbaijani

Basque

Bengali

Bosnian

Catalan

Croatian

Czech

Danish

Dutch

Esperanto

Estonian

Filipino

Finnish

French

Galician

Georgian

German

Greek

Gujarati

Haitian Creole

Hausa

Hawaiian

Hebrew

Hindi

Hungarian

Icelandic

Indonesian

Interlingua

Interlingue

Inuktitut

Irish

Italian

Japanese

Javanese

Kannada

Khmer

Korean

Latin

Latvian

Lithuanian

Luxembourgish

Macedonian

Malagasy

Malayalam

Maltese

Maori

Marathi

Myanmar

Nepali

Norwegian

Odia

Pashto

Punjabi

Romanian

Russian

Samoan

Sango

Sanskrit

Sardinian

Sindhi

Sinhala

Slovak

Slovenian

Somali

Southern Sotho

Spanish

Sundanese

Swahili

Swedish

Tamil

Telugu

Thai

Tigrinya

Tonga

Turkish

Ukrainian

Urdu

Vietnamese

Welsh

Xhosa

Yiddish

Yoruba

Zulu

Powered by
Translate

Close

Illinois General Assembly

Top Navigation Bar

Translate

Learn

Select General Assembly

Search the 104th General Assembly

Enter search terms for legislation, members, committees, or schedules.

ILGA.GOV

LEGISLATION & LAWS

Bills & Resolutions

Public Acts

Illinois Compiled Statutes

Illinois Constitution

Search Legislation

Glossary

Guide

Reports & Inquiry

Legislative Reports

Special Reports

FTP Site

Legislator Lookup

Capitol Complex Phone Numbers

Rules & Regulations

Illinois Register

Administrative Rules

Senate

Members

Schedules

Committees

Request for Remote Testimony

Journals

Transcripts

Rules

Audio/Video

FOIA Information

Senate Employment Opportunities

Media Guidelines

House

Members

Schedules

Committees

Submit testimony for House Committees

Journals

Transcripts

Rules

Audio/Video

FOIA Information

House Employment Opportunities

Log In

Mobile Top Bar

Search the 104th General Assembly

Enter keywords to search the Illinois General Assembly website.

Full Text of SB3505

Home

Legislation

Full Text

SB3505 - 104th General Assembly

Bill Status

Full Text

Votes

Witness Slips

Select Menu

Bill Status

Full Text

Votes

Witness Slips

Printer Friendly Version

Introduced

Senate Amendment 001

Printer Friendly Version

Introduced

Senate Amendment 001

Open PDF

104TH GENERAL ASSEMBLY
State of Illinois
2025 and 2026
SB3505

Introduced 2/5/2026, by Sen. Julie A. Morrison

SYNOPSIS AS INTRODUCED:

215 ILCS 5/154.6

from Ch. 73, par. 766.6
215 ILCS 5/155

from Ch. 73, par. 767
215 ILCS 5/397.1

from Ch. 73, par. 1009.1
215 ILCS 5/1570
215 ILCS 5/1575
215 ILCS 5/1590

Amends the Illinois Insurance Code. Increases one of the fees allowed
as part of the taxable costs in a specified action to $240,000 (instead of
$60,000). Provides that it shall be unlawful for any company transacting
insurance business in this State to pay a claim of an insured property
owner for loss by fire or explosion to a structure located in this State
where the amount recoverable for loss to the structure under a policy
exceeds $100,000 (instead of $25,000), until the insurance company
receives the required certificate. Sets forth provisions concerning
adjustment and settlement of first party property insurance losses based
on replacement cost. Requires the insurer to replace items with material
of like kind and quality so as to conform to a reasonably uniform
appearance, including interior and exterior covered losses, when a covered
loss for real property requires the replacement of an item or items and the
replacement item or items do not match adjacent items in quality, color, or
size. Excludes expenses to be reimbursed to the public adjuster from the
10% cap on a public adjuster's salary, fee, commission, compensation, or
consideration. Sets forth provisions concerning direction to pay letters
and payments to public adjusters. Provides that the policies must be
individually underwritten for personal, family, or household use. Provides
that expenses to be reimbursed to the public adjuster are not limited to
emergency mitigation expenses, and requires expenses to be reimbursed to
the public adjuster regardless of whether the expense is covered by the
applicable insurance policy. Includes the named insured's public adjuster
and the named insured's attorney as designees.
LRB104 19484 BAB 32932 b

A BILL FOR

SB3505
LRB104 19484 BAB 32932 b
1

AN ACT concerning regulation.

2

Be it enacted by the People of the State of Illinois,
3
represented in the General Assembly:

4

Section 5.
The Illinois Insurance Code is amended by
5
changing Sections 154.6, 155, 397.1, 1570, 1575, and 1590 as
6
follows:

7

(215 ILCS 5/154.6)

(from Ch. 73, par. 766.6)
8

Sec. 154.6.
Acts constituting improper claims practice.

9

(a)
Any of the following acts by a company, if committed
10
without just cause and in violation of Section 154.5,
11
constitutes an improper claims practice:
12

(1)

(a)
Knowingly misrepresenting to claimants and
13

insureds relevant facts or policy provisions relating to
14

coverages at issue;
15

(2)

(b)
Failing to acknowledge with reasonable
16

promptness pertinent communications with respect to claims
17

arising under its policies;
18

(3)

(c)
Failing to adopt and implement reasonable
19

standards for the prompt investigations and settlement of
20

claims arising under its policies;
21

(4)

(d)
Not attempting in good faith to effectuate
22

prompt, fair and equitable settlement of claims submitted
23

in which liability has become reasonably clear;

SB3505
- 2 -
LRB104 19484 BAB 32932 b
1

(5)

(e)
Compelling policyholders to institute suits to
2

recover amounts due under its policies by offering
3

substantially less than the amounts ultimately recovered
4

in suits brought by them;
5

(6)

(f)
Engaging in activity which results in a
6

disproportionate number of meritorious complaints against
7

the insurer received by the Insurance Department;
8

(7)

(g)
Engaging in activity which results in a
9

disproportionate number of lawsuits to be filed against
10

the insurer or its insureds by claimants;
11

(8)

(h)
Refusing to pay claims without conducting a
12

reasonable investigation based on all available
13

information;
14

(9)

(i)
Failing to affirm or deny coverage of claims
15

within a reasonable time after proof of loss statements
16

have been completed;
17

(10)

(j)
Attempting to settle a claim for less than
18

the amount to which a reasonable person would believe the
19

claimant was entitled, by reference to written or printed
20

advertising material accompanying or made part of an
21

application or establishing unreasonable caps or limits on
22

paint or materials when estimating vehicle repairs;
23

(11)

(k)
Attempting to settle claims on the basis of
24

an application which was altered without notice to, or
25

knowledge or consent of, the insured;
26

(12)

(l)
Making a claims payment to a policyholder or

SB3505
- 3 -
LRB104 19484 BAB 32932 b
1

beneficiary omitting the coverage under which each payment
2

is being made;
3

(13)

(m)
Delaying the investigation or payment of
4

claims by requiring an insured, a claimant, or the
5

physicians of either to submit a preliminary claim report
6

and then requiring subsequent submission of formal proof
7

of loss forms, resulting in the duplication of
8

verification;
9

(14)

(n)
Failing in the case of the denial of a claim
10

or the offer of a compromise settlement to promptly
11

provide a reasonable and accurate explanation of the basis
12

in the insurance policy or applicable law for such denial
13

or compromise settlement;
14

(15)

(o)
Failing to provide forms necessary to present
15

claims within 15 working days of a request with such
16

explanations as are necessary to use them effectively;
17

(16)

(p)
Failing to adopt and implement reasonable
18

standards to verify that a repairer designated by the
19

insurance company to provide an estimate, perform repairs,
20

or engage in any other service in connection with an
21

insured loss on a vehicle is duly licensed under Section
22

5-301 of the Illinois Vehicle Code;
23

(17)

(q)
Failing to provide as a persistent tendency a
24

notification on any written estimate prepared by an
25

insurance company in connection with an insured loss that
26

Illinois law requires that vehicle repairers must be

SB3505
- 4 -
LRB104 19484 BAB 32932 b
1

licensed in accordance with Section 5-301 of the Illinois
2

Vehicle Code;
3

(18)

(r)
Failing to pay the replacement vehicle use or
4

occupation tax, title, and transfer fees required by
5

Section 154.9 of this Code;
6

(19)

(s)
Engaging in any other acts which are in
7

substance equivalent to any of the foregoing.
8

(b) When the policy provides for the adjustment and
9
settlement of first-party property insurance losses based on
10
replacement cost and when a loss requires repair or
11
replacement of an item or part, any consequential physical
12
damage incurred in making such repair or replacement, not
13
otherwise excluded by the policy, shall be included in the
14
loss. The insured shall not be required to pay for betterment
15
nor any other cost except for the applicable deductible.
16

(c) When a covered loss for real property requires the
17
replacement of an item or items and the replacement item or
18
items do not match adjacent items in quality, color, or size,
19
the insurer shall replace the items with material of like kind
20
and quality so as to conform to a reasonably uniform
21
appearance. This provision applies to interior and exterior
22
covered losses.

23
(Source: P.A. 102-69, eff. 7-1-22
.)

24

(215 ILCS 5/155)

(from Ch. 73, par. 767)
25

Sec. 155.
Attorney fees.

SB3505
- 5 -
LRB104 19484 BAB 32932 b
1

(1) In any action by or against a company wherein there is
2
in issue the liability of a company on a policy or policies of
3
insurance or the amount of the loss payable thereunder, or for
4
an unreasonable delay in settling a claim, and it appears to
5
the court that such action or delay is vexatious and
6
unreasonable, the court may allow as part of the taxable costs
7
in the action reasonable attorney fees, other costs, plus an
8
amount not to exceed any one of the following amounts:

9

(a) 60% of the amount which the court or jury finds
10

such party is entitled to recover against the company,
11

exclusive of all costs;

12

(b)
$240,000

$60,000
;
or

13

(c) the excess of the amount which the court or jury
14

finds such party is entitled to recover, exclusive of
15

costs, over the amount, if any, which the company offered
16

to pay in settlement of the claim prior to the action.
17

(2) Where there are several policies insuring the same
18
insured against the same loss whether issued by the same or by
19
different companies, the court may fix the amount of the
20
allowance so that the total attorney fees on account of one
21
loss shall not be increased by reason of the fact that the
22
insured brings separate suits on such policies.
23
(Source: P.A. 93-485, eff. 1-1-04.)

24

(215 ILCS 5/397.1)

(from Ch. 73, par. 1009.1)
25

Sec. 397.1.
Certificate regarding payment of taxes and

SB3505
- 6 -
LRB104 19484 BAB 32932 b
1
expenses on property sustaining loss.
2

(a) It shall be unlawful for any company transacting
3
insurance business in this State to pay a claim of an insured
4
property owner for loss by fire or explosion to a structure
5
located in this State where the amount recoverable for loss to
6
the structure under a policy exceeds
$100,000

$25,000
, until
7
the insurance company receives the certificate required by
8
this Section. A notice, to the State's Attorney of the county
9
where the structure is located, of the insurers intent to pay a
10
claim shall include the name of the property owner, the
11
address of the property, its legal description, the permanent
12
real estate index number that identifies the property for
13
purposes of taxation, and the amount of the claim to be paid.
14

(b) For purposes of this Section, the following
15
definitions are applicable:

16

(1) "Insured property owner" is a person named as an
17

insured who is the owner, title-holder or mortgagee of a
18

structure, the holder of an interest secured by the
19

structure, the beneficiary of a land trust owning or
20

holding title to a structure, the lessee of a structure
21

with a contractual obligation for property taxes, or the
22

assignee of any such person.

23

(2) "Amount recoverable" is the dollar amount payable
24

under all insurance policies for loss to the structure.

25

(3) "Proceeds" is the dollar amount payable for loss
26

to the structure under an insurance policy.

SB3505
- 7 -
LRB104 19484 BAB 32932 b
1

(4) "Delinquent property taxes" are those property
2

taxes on the property which are delinquent pursuant to
3

Section 21-15, 21-20, or 21-25 of the Property Tax Code,
4

including those delinquent taxes on property forfeited
5

under Section 21-225 of the Property Tax Code, as of the
6

date of loss.

7

In determining delinquent property taxes under this
8

Section, the amount of property taxes for which a
9

certificate of error has been issued pursuant to Section
10

14-10 or 14-20 of the Property Tax Code shall not be
11

considered delinquent.

12

(5) "Incurred demolition expense" is: a. the cost of
13

demolishing or removing a structure from property by or at
14

the expense of a unit of local government if the
15

demolition or removal occurs on a date preceding the later
16

of (i) the acceptance by the insurance company of a Proof
17

of Loss for an agreed amount of proceeds, or (ii) the date
18

of receipt by the unit of local government of a request for
19

execution of the certificate required by this Section; or
20

b. the amount estimated by the unit of local government
21

when it receives a request to execute the certificate
22

required by this Section; or c. the amount ordered to be
23

withheld by a court within 28 days after a unit of local
24

government receives a request for execution of the
25

certificate required by this Section. The unit of local
26

government must be a party to such proceeding.

SB3505
- 8 -
LRB104 19484 BAB 32932 b
1

Incurred demolition expense shall be determined under
2

subparagraph a. whenever possible. In determining the
3

incurred demolition expense under subparagraph b., the
4

unit of local government shall make its estimate and
5

execute the certificate within 30 days after receiving a
6

request for execution. If the unit of local government
7

shall fail within 30 days to execute the certificate, as
8

required by subparagraph a., the company can proceed to
9

make payment of the claim as if the certificate had been
10

received showing no unpaid demolition costs. The request
11

for execution may be served personally, and may be proven
12

by a written receipt signed by the local official as of the
13

date the request was made or by service on the local
14

official by certified mail, return receipt requested. A
15

court order under subparagraph c. shall supersede an
16

estimate under subparagraph b.

17

(6) "Property" is the lot on which the structure is
18

located.

19

(7) "Structure" is a building.

20

(8) "Claim" is the demand by an insured for payment
21

under an insurance policy or policies.

22

(9) "Proof of Loss" is the document on which an
23

insured formally presents his claim to an insurance
24

company.

25

(10) "Certificate" is the executed form prescribed by
26

the Director of Insurance.

SB3505
- 9 -
LRB104 19484 BAB 32932 b
1

(11) "Executed" means signed by the appropriate
2

official or unit of government.
3

(c) For any claim to which this Section is applicable, an
4
insured property owner must submit one of the following to the
5
insurance company:

6

(1) a certificate that with respect to the property
7

there are:

8

a. no delinquent property taxes, and

9

b. no unpaid incurred demolition expenses;

10

(2) a certificate setting forth with respect to the
11

property:

12

a. the amount of unpaid delinquent property taxes,

13

b. the amount of unpaid incurred demolition
14

expense, and

15

c. a direction by an insured property owner to the
16

insurance company to pay the unpaid delinquent
17

property taxes and unpaid incurred demolition
18

expenses.

19

(d) (1) Except as provided in paragraph (2) of this
20

subsection (d), if a certificate is submitted pursuant to
21

paragraph (2) of subsection (c) of this Section, the
22

insurance company shall pay the unpaid delinquent property
23

taxes and unpaid incurred demolition expense from the
24

proceeds payable by issuing a draft or check payable to
25

the appropriate tax collector or unit of local government.

26

Any proceeds remaining shall be paid to the insured

SB3505
- 10 -
LRB104 19484 BAB 32932 b
1

property owner.

2

(2) In the event incurred demolition expense is
3

determined by estimation under paragraph (5) of subsection
4

(b) of this Section in cities of over 2,000,000, the
5

insurance company shall hold the amount estimated until an
6

amended certificate executed by the appropriate local
7

government official is submitted stating (i) that no
8

demolition expense will be incurred or (ii) the actual
9

unpaid incurred demolition expense. The insurance company
10

shall then issue a draft or check payable to the unit of
11

local government for the actual unpaid incurred demolition
12

expense. Any proceeds remaining shall be paid to the
13

insured property owner.

14

In determining the amount of proceeds remaining under
15

this paragraph, the insured property owner shall receive
16

interest on the amount withheld from the date the
17

certificate is executed as provided in Section 2 of the
18

Interest Act.
19

(e) If, under this Section, the proceeds payable are less
20
than the amount of the unpaid delinquent property taxes and
21
unpaid incurred demolition expense, unpaid property taxes
22
shall be paid first.
23

(f) If incurred demolition expense withheld pursuant to
24
subparagraphs b. or c. of paragraph 5 of subsection (b) of this
25
Section exceeds the ultimate cost of demolition, the excess
26
shall first be applied to unpaid delinquent property taxes.

SB3505
- 11 -
LRB104 19484 BAB 32932 b
1
Any amount of proceeds remaining shall be paid to the insured
2
property owner.
3

(g) Nothing in this Section shall be construed as:

4

(1) making an insurance company liable for any amount
5

in excess of the proceeds payable under its insurance
6

policy unless the insurance company shall have made
7

payment to the named insured without satisfying the
8

requirements of this Section;

9

(2) making a unit of local government or tax collector
10

an insured under an insurance policy; or

11

(3) creating an obligation for an insurance company to
12

pay unpaid delinquent property taxes or unpaid incurred
13

demolition expense other than as provided in subsection
14

(d) of this Section.
15

(h) An insurance company making a payment of proceeds
16
under this Section for unpaid delinquent taxes or unpaid
17
incurred demolition expense shall be entitled to the full
18
benefit of such payment, including subrogation rights and
19
other rights of assignment.
20

(i) Unpaid property taxes and unpaid incurred demolition
21
expense for a claim for loss to a structure occurring after the
22
issuance of a tax deed pursuant to Section 22-40 of the
23
Property Tax Code shall not include any unpaid property tax or
24
unpaid demolition expense arising before the issuance of the
25
tax deed.
26

(j) The county collector shall be designated as the local

SB3505
- 12 -
LRB104 19484 BAB 32932 b
1
official who shall execute the certificate required by this
2
Section regarding delinquent property taxes. The village clerk
3
or city clerk in incorporated areas and the official in charge
4
of the county building department in unincorporated areas
5
shall be designated as the local official who shall execute
6
the certificate required by this Section regarding demolition
7
expenses.
8

(k) A fee not to exceed $5 may be charged by a unit of
9
local government for execution of the certificate required by
10
this Section.
11

(l) This Section shall retroactively apply to any policy
12
issued or renewed on or after January 1, 1978 for which a claim
13
subject to this Section remains unpaid as of the effective
14
date of this amendatory Act of 1978.
15
(Source: P.A. 87-507; 88-667, eff. 9-16-94; 88-670, eff.
16
12-2-94.)

17

(215 ILCS 5/1570)
18

Sec. 1570.
Public adjuster fees.
19

(a) A public adjuster shall not pay a commission, service
20
fee, or other valuable consideration to a person for
21
investigating or settling claims in this State if that person
22
is required to be licensed under this Article and is not so
23
licensed.
24

(b) A person shall not accept a commission, service fee,
25
or other valuable consideration for investigating or settling

SB3505
- 13 -
LRB104 19484 BAB 32932 b
1
claims in this State if that person is required to be licensed
2
under this Article and is not so licensed.
3

(c) A public adjuster may pay or assign commission,
4
service fees, or other valuable consideration to persons who
5
do not investigate or settle claims in this State, unless the
6
payment would violate State law.
7

(d) If the loss giving rise to the claim for which the
8
public adjuster was retained arises from damage to property
9
that is anything but a personal residence, a public adjuster
10
may not charge, agree to, or accept any compensation, payment,
11
commission, fee, or other valuable consideration in excess of
12
10% of the amount of the insurance settlement claim paid by the
13
insurer on any claim resulting from a catastrophic event,
14
unless approved in writing by the Director. Application for
15
exception to the 10% limit must be made in writing. The request
16
must contain specific reasons as to why the consideration
17
should be in excess of 10% and proof that the policyholder
18
would accept the consideration. The Director must act on any
19
request within 5 business days after receipt of the request.
20

For the purpose of this subsection (d), "catastrophic
21
event" means an occurrence of widespread or severe damage or
22
loss of property producing an overwhelming demand on State and
23
local response resources and mechanisms and a severe long-term
24
effect on general economic activity, and that severely affects
25
State, local, and private sector capabilities to begin to
26
sustain response activities resulting from any catastrophic

SB3505
- 14 -
LRB104 19484 BAB 32932 b
1
cause, including, but not limited to, fire, including arson
2
(provided the fire was not caused by the willful action of an
3
owner or resident of the property), flood, earthquake, wind,
4
storm, explosion, or extended periods of severe inclement
5
weather as determined by declaration of a State of disaster by
6
the Governor. This declaration may be made on a
7
county-by-county basis and shall be in effect for 90 days, but
8
may be renewed for 30-day intervals thereafter.
9

(e) If the loss giving rise to the claim for which the
10
public adjuster was retained arises from damage to a personal
11
residence, a public adjuster may not charge, agree to, or
12
accept any compensation, payment, commission, fee, or other
13
valuable consideration in excess of 10% of the amount of the
14
insurance settlement claim paid by the insurer on any claim.
15
Expenses to be reimbursed to the public adjuster are not
16
subject to the 10% cap on a public adjuster's salary, fee,
17
commission, compensation, or consideration. The policies must
18
be individually underwritten for personal, family, or
19
household use. No other type of insurance shall be considered
20
personal insurance. As used in this subsection, "personal
21
residence" means a residence insured under homeowners and
22
non-commercial dwelling fire insurance policies.

23

(f)(1) When a claim is settled where the insured is
24
represented by a public adjuster, upon the request of the
25
insured, the insurer shall follow the direction of the
26
insured, subject to the interests of any loss payee or

SB3505
- 15 -
LRB104 19484 BAB 32932 b
1
mortgagee, as to who shall be named on the insurer's check or
2
checks by following the instructions in a direction to pay
3
letter signed by the insured and filed with the insurer. The
4
insurer shall not accept the direction to pay letter unless
5
the letter is signed by the first named insured with regard to
6
commercial claims and by all named insureds with regard to
7
noncommercial claims.
8

(2) Upon the written direction of the insured, the insurer
9
shall make its check payable to both the public adjuster and
10
the insured, or to the public adjuster named as a payee, but
11
not in excess of the amount of the public adjuster's fee, as
12
indicated in the written compensation agreement signed by the
13
insured party to be charged and filed with the insurer. The
14
balance of the proceeds shall be made payable to the insured or
15
any loss payee or mortgagee, or both, whichever is
16
appropriate. If an insured does not submit a direction to pay
17
letter to the insurer, then the insurer shall not make any
18
check payable to the public adjuster.
19

(3) Any payment made to a public adjuster shall be only for
20
those elements of the claim for which the public adjuster
21
represents the insured.
22

(4) A direction to pay letter shall be valid for any
23
payment made pursuant to a claim unless revoked by the
24
insured. A direction to pay letter shall be revocable by any
25
named insured at any time prior to the insurer issuing a check.
26
If an insured revokes a direction to pay letter, then the

SB3505
- 16 -
LRB104 19484 BAB 32932 b
1
revocation shall be in writing and signed by the insured. The
2
insured shall submit the revocation to the insurer and provide
3
the public adjuster with a copy.
4

(5) A public adjuster shall not condition doing business
5
with an insured on the insured signing a direction to pay
6
letter that directs the insurer to name the public adjuster on
7
the check.

8
(Source: P.A. 103-216, eff. 1-1-24
.)

9

(215 ILCS 5/1575)
10

Sec. 1575.
Contract between public adjuster and insured.
11

(a) Public adjusters shall ensure that all contracts for
12
their services are in writing and contain the following terms:
13

(1) legible full name of the adjuster signing the
14

contract, as specified in Department records;
15

(2) permanent home state business address, email
16

address, and phone number;
17

(3) license number;
18

(4) title of "Public Adjuster Contract";
19

(5) the insured's full name, street address, insurance
20

company name, and policy number, if known or upon
21

notification;
22

(6) a description of the loss and its location;
23

(7) description of services to be provided to the
24

insured;
25

(8) signatures of the public adjuster and the insured;

SB3505
- 17 -
LRB104 19484 BAB 32932 b
1

(9) date and time the contract was signed by the
2

public adjuster and date and time the contract was signed
3

by the insured;
4

(10) attestation language stating that the public
5

adjuster is fully bonded pursuant to State law; and
6

(11) full salary, fee, commission, compensation, or
7

other considerations the public adjuster is to receive for
8

services, including any applicable cap under Section 1570.
9

(b) The contract may specify that the public adjuster
10
shall be named as a co-payee on an insurer's payment of a
11
claim.
12

(1) If the compensation is based on a share of the
13

insurance settlement, the exact percentage shall be
14

specified.
15

(2) Initial expenses to be reimbursed to the public
16

adjuster from the proceeds of the claim payment shall be
17

specified by type, with dollar estimates set forth in the
18

contract and with any additional expenses first approved
19

by the insured.
Expenses to be reimbursed to the public
20

adjuster are not limited to emergency mitigation expenses.
21

Expenses shall be reimbursed to the public adjuster
22

regardless of whether the expense is covered by the
23

applicable insurance policy.

24

(3) Compensation provisions in a public adjuster
25

contract shall not be redacted in any copy of the contract
26

provided to the Director.

SB3505
- 18 -
LRB104 19484 BAB 32932 b
1

(c) If the insurer, not later than 5 business days after
2
the date on which the loss is reported to the insurer, either
3
pays or commits in writing to pay to the insured the policy
4
limit of the insurance policy, the public adjuster shall:
5

(1) not receive a commission consisting of a
6

percentage of the total amount paid by an insurer to
7

resolve a claim;
8

(2) inform the insured that loss recovery amount might
9

not be increased by insurer; and
10

(3) be entitled only to reasonable compensation from
11

the insured for services provided by the public adjuster
12

on behalf of the insured, based on the time spent on a
13

claim and expenses incurred by the public adjuster, until
14

the claim is paid or the insured receives a written
15

commitment to pay from the insurer.
16

(d) A public adjuster shall provide the insured a written
17
disclosure concerning any direct or indirect financial
18
interest that the public adjuster has with any other party who
19
is involved in any aspect of the claim, other than the salary,
20
fee, commission, or other consideration established in the
21
written contract with the insured, including, but not limited
22
to, any ownership of or any compensation expected to be
23
received from, any construction firm, salvage firm, building
24
appraisal firm, board-up company, or any other firm that
25
provides estimates for work, or that performs any work, in
26
conjunction with damages caused by the insured loss on which

SB3505
- 19 -
LRB104 19484 BAB 32932 b
1
the public adjuster is engaged. The word "firm" shall include
2
any corporation, partnership, association, joint-stock
3
company, or person.
4

(e) A public adjuster contract may not contain any
5
contract term that:
6

(1) allows the public adjuster's percentage fee to be
7

collected when money is due from an insurance company, but
8

not paid, or that allows a public adjuster to collect the
9

entire fee from the first check issued by an insurance
10

company, rather than as a percentage of each check issued
11

by an insurance company;
12

(2) requires the insured to authorize an insurance
13

company to issue a check only in the name of the public
14

adjuster;
15

(3) precludes a public adjuster or an insured from
16

pursuing civil remedies;
17

(4) includes any hold harmless agreement that provides
18

indemnification to the public adjuster by the insured for
19

liability resulting from the public adjuster's negligence;
20

or
21

(5) provides power of attorney by which the public
22

adjuster can act in the place and instead of the insured.
23

(f) The following provisions apply to a contract between a
24
public adjuster and an insured:
25

(1) Prior to the signing of the contract, the public
26

adjuster shall provide the insured with a separate signed

SB3505
- 20 -
LRB104 19484 BAB 32932 b
1

and dated disclosure document regarding the claim process
2

that states:
3

"Property insurance policies obligate the insured to
4

present a claim to his or her insurance company for
5

consideration. There are 3 types of adjusters that could
6

be involved in that process. The definitions of the 3
7

types are as follows:
8

(A) "Company adjuster" means the insurance
9

adjusters who are employees of an insurance company.
10

They represent the interest of the insurance company
11

and are paid by the insurance company. They will not
12

charge you a fee.
13

(B) "Independent adjuster" means the insurance
14

adjusters who are hired on a contract basis by an
15

insurance company to represent the insurance company's
16

interest in the settlement of the claim. They are paid
17

by your insurance company. They will not charge you a
18

fee.
19

(C) "Public adjuster" means the insurance
20

adjusters who do not work for any insurance company.
21

They represent the insured to assist in the
22

preparation, presentation and settlement of the claim.
23

The insured hires them by signing a contract agreeing
24

to pay them a fee or commission based on a percentage
25

of the settlement, or other method of compensation.".
26

(2) The insured is not required to hire a public

SB3505
- 21 -
LRB104 19484 BAB 32932 b
1

adjuster to help the insured meet his or her obligations
2

under the policy, but has the right to do so.
3

(3) The public adjuster is not a representative or
4

employee of the insurer or the Department of Insurance.
5

(4) The salary, fee, commission, or other
6

consideration is the obligation of the insured, not the
7

insurer, except when rights have been assigned to the
8

public adjuster by the insured.
9

(g) The contracts shall be executed in duplicate to
10
provide an original contract to the public adjuster, and an
11
original contract to the insured. The public adjuster's
12
original contract shall be available at all times for
13
inspection without notice by the Director.
14

(h) The public adjuster shall provide the insurer or its
15
authorized representative for receiving notice of loss or
16
damage with an exact copy of the contract with the insured by
17
email no later than 5 business days after execution of the
18
contract, authorizing the public adjuster to represent the
19
insured's interest.
20

(i) The public adjuster shall give the insured written
21
notice of the insured's rights as a consumer under the law of
22
this State.
23

(j) A public adjuster shall not provide services, other
24
than emergency services, until a written contract with the
25
insured has been executed, on a form filed with and approved by
26
the Director, and an exact copy of the contract has been

SB3505
- 22 -
LRB104 19484 BAB 32932 b
1
provided to the insurer in accordance with subsection (h). At
2
the option of the insured, any such contract shall be voidable
3
for 5 business days after the contract is received by the
4
insurer. The insured may void the contract by notifying the
5
public adjuster in writing by (i) registered or certified
6
mail, return receipt requested, to the address shown on the
7
contract, (ii) personally serving the notice on the public
8
adjuster, or (iii) sending an email to the email address shown
9
on the contract.
10

(k) If the insured exercises the right to rescind the
11
contract, anything of value given by the insured under the
12
contract will be returned to the insured within 15 business
13
days following the receipt by the public adjuster of the
14
cancellation notice.
15

(l) All contracts entered into that are in violation of
16
this Section are void and invalid.
17
(Source: P.A. 103-216, eff. 1-1-24
.)

18

(215 ILCS 5/1590)
19

Sec. 1590.
Standards of conduct of public adjuster.
20

(a) A public adjuster is obligated, under his or her
21
license, to serve with objectivity and complete loyalty for
22
the interests of his client alone, and to render to the insured
23
such information, counsel, and service, as within the
24
knowledge, understanding, and opinion in good faith of the
25
licensee, as will best serve the insured's insurance claim

SB3505
- 23 -
LRB104 19484 BAB 32932 b
1
needs and interest.
2

(b) A public adjuster may not propose or attempt to
3
propose to any person that the public adjuster represent that
4
person while a loss-producing occurrence is continuing, nor
5
while the fire department or its representatives are engaged
6
at the damaged premises, nor between the hours of 7:00 p.m. and
7
8:00 a.m.
8

(c) A public adjuster shall not permit an unlicensed
9
employee or representative of the public adjuster to conduct
10
business for which a license is required under this Article.
11

(d) A public adjuster shall not have a direct or indirect
12
financial interest in any aspect of the claim, other than the
13
salary, fee, commission, or other consideration established in
14
the written contract with the insured, unless full written
15
disclosure has been made to the insured as set forth in
16
subsection (d) of Section 1575.
17

(e) A public adjuster shall not acquire any interest in
18
the salvage of property subject to the contract with the
19
insured unless the public adjuster obtains written permission
20
from the insured after settlement of the claim with the
21
insurer as set forth in subsection (d) of Section 1575 of this
22
Article.
23

(f) The public adjuster shall abstain from referring or
24
directing the insured to get needed repairs or services in
25
connection with a loss from any person, unless disclosed to
26
the insured:

SB3505
- 24 -
LRB104 19484 BAB 32932 b
1

(1) with whom the public adjuster has a direct or
2

indirect financial interest; or
3

(2) from whom the public adjuster may receive direct
4

or indirect compensation for the referral.
5

(g) The public adjuster shall disclose to an insured if he
6
or she has any interest or will be compensated by any
7
construction firm, salvage firm, building appraisal firm,
8
board-up company, or any other firm that performs any work in
9
conjunction with damages caused by the insured loss. The word
10
"firm" shall include any corporation, partnership,
11
association, joint-stock company or individual as set forth in
12
Section 1575 of this Article.
13

(h) Any compensation or anything of value in connection
14
with an insured's specific loss that will be received by a
15
public adjuster shall be disclosed by the public adjuster to
16
the insured in writing including the source and amount of any
17
such compensation.
18

(i) In all cases where the loss giving rise to the claim
19
for which the public adjuster was retained arise from damage
20
to a personal residence, the insurance proceeds shall be
21
delivered to the named insured or his or her designee
,
22
including the named insured's public adjuster and the named
23
insured's attorney
. Where proceeds paid by an insurance
24
company are paid jointly to the insured and the public
25
adjuster, the insured shall release such portion of the
26
proceeds that are due the public adjuster within 30 calendar

SB3505
- 25 -
LRB104 19484 BAB 32932 b
1
days after the insured's receipt of the insurance company's
2
check, money order, draft, or release of funds. If the
3
proceeds are not so released to the public adjuster within 30
4
calendar days, the insured shall provide the public adjuster
5
with a written explanation of the reason for the delay.
6

(j) Public adjusters shall adhere to the following general
7
ethical requirements:
8

(1) a public adjuster shall not undertake the
9

adjustment of any claim if the public adjuster is not
10

competent and knowledgeable as to the terms and conditions
11

of the insurance coverage, or which otherwise exceeds the
12

public adjuster's current expertise;
13

(2) a public adjuster shall not knowingly make any
14

oral or written material misrepresentations or statements
15

which are false or maliciously critical and intended to
16

injure any person engaged in the business of insurance to
17

any insured client or potential insured client;
18

(3) no public adjuster, while so licensed by the
19

Department, may represent or act as a company adjuster or
20

independent adjuster on the same claim;
21

(4) the contract shall not be construed to prevent an
22

insured from pursuing any civil remedy after the
23

5-business day revocation or cancellation period;
24

(5) a public adjuster shall not enter into a contract
25

or accept a power of attorney that vests in the public
26

adjuster the effective authority to choose the persons who

SB3505
- 26 -
LRB104 19484 BAB 32932 b
1

shall perform repair work;
2

(6) a public adjuster shall ensure that all contracts
3

for the public adjuster's services are in writing and set
4

forth all terms and conditions of the engagement; and
5

(7) a public adjuster shall not advance money or any
6

valuable consideration, except emergency services to an
7

insured pending adjustment of a claim.
8

(k) A public adjuster may not agree to any loss settlement
9
without the insured's knowledge and consent and shall, upon
10
the insured's request, provide the insured with a document
11
setting forth the scope, amount, and value of the damages
12
prior to request by the insured for authority to settle the
13
loss.
14

(l) A public adjuster shall not provide legal advice or
15
representation to the insured or engage in the unauthorized
16
practice of law.
17

(m) A public adjuster shall not represent that he or she is
18
a representative of an insurance company, a fire department,
19
or the State of Illinois, that he or she is a fire
20
investigator, that his or her services are required for the
21
insured to submit a claim to the insured's insurance company,
22
or that he or she may provide legal advice or representation to
23
the insured. A public adjuster may represent that he or she has
24
been licensed by the State of Illinois.
25
(Source: P.A. 103-216, eff. 1-1-24
.)

Footer

Disclaimer

This site is maintained for the Illinois General Assembly by the
Legislative Information System, 705 Stratton Building, Springfield, Illinois 62706.

Contact ILGA Webmaster

ILGA.gov uses cookies to ensure you get the best experience on our website. By continuing to browse ILGA.gov you consent to our use of cookies.
Read About Cookies

ILGA.GOV

2026 ILGA.gov | All Rights Reserved |
ADA

|
Disclaimers
|
Learn

This site is maintained for the Illinois General Assembly by the
Legislative Information System, 705 Stratton Building, Springfield, Illinois 62706.
Contact ILGA Webmaster

ILGA.gov uses cookies to ensure you get the best experience on our website. By continuing to browse ILGA.gov you consent to our use of cookies.
Read About Cookies

ILGA.GOV

2026 ILGA.gov | All Rights Reserved |
ADA

|
Disclaimers
|
Learn