What is Reciprocity in Insurance Adjuster Licensing?

Insurance adjustment is all about the license. Those who wish to work in the claims adjustment industry should know that they need an adjuster license to legally practice in their home state. But what happens when you cross state lines?

While state laws may differ, the general rule is that you will need to acquire an adjuster license in that state to work as an adjuster as a non-resident. As tedious as it may sound, adjusters have no choice but to comply with the requirements, including taking the exam. That may no longer be the case in some states all thanks to reciprocity. 

Reciprocity Defined

Reciprocity is a term used in insurance adjusting to signify an agreement between states. Basically, it is an agreement formed between states that allows an adjuster to acquire a state license as a non-resident without having to go through a licensure exam or taking a pre-licensing course.

The main concept behind reciprocity deals with the fact that if you’ve already put in the time and effort to master adjusting in your home state, then you may no longer need to go through the same process for the partner state. This will mean that a state recognizes the validity of the training and the license itself, and vice versa.

Are Some States Better for Reciprocity?

Some states are considered better than others in terms of reciprocal licensing. Generally speaking, a state that has a reciprocity agreement with more states will be better for adjusters who want to work in multiple states – to a certain extent. 

Texas, for example, is often considered as the best because its All Lines and P&C Adjuster License is recognized by more than 30 states via reciprocity. 

Ultimately, it all falls to each state’s Department of Insurance to determine which licenses they will accept on a reciprocal basis. 

Common Misconceptions

Because Texas is considered as having the most powerful license, it is often subjected to misconceptions, but none bigger than “just get a Texas license and you can work anywhere in the country.” This myth is so big, in fact, that residents in states like Georgia and Florida are bypassing their home states to pursue a Texas license.

First off, having a Texas license does not entitle you to an automatic license grant in another state. In fact, you will still need to comply with the state’s application process and pay its associated fees to obtain a license there.

Secondly, residence matters more than the state from which you get your license. In fact, a majority of states today agree to grant licenses to adjusters who possess a license from their home state. Obtaining your home state’s license is still the best way to take advantage of reciprocity. This will let you maximize your earning potential as you obtain more licenses in more states without any complications.

Lastly, rules have been placed so you can no longer bypass your home state’s licensing requirements. Texas, for example, has stopped processing non-resident licenses in the absence of the bearer’s home license.

Reciprocal licensing isn’t a be all, end all agreement that lets you work in any state you wish. Nevertheless, it is still a great bonus to let you get started on working in the insurance adjusting industry more easily.