Pennsylvania's Public Adjuster Fee Cap Went Up Twice on Its Way to 20%

Open HB 1972 at each of its three printer's numbers and watch one number move. Printer's No. 2487, introduced October 20, 2025: a public adjuster may not charge more than 15% of an insurance claim settlement. Printer's No. 2847, after the House amended it on second consideration, carries that 15% struck through with 18% beside it. Printer's No. 3550, as amended in Senate Banking and Insurance, carries the 18% struck through with 20% beside it.¹ The Senate passed that print 50-0 on October 19 at 4:46 p.m.⁴ The House concurred 203-0 the next afternoon.⁵ The trade-association page still asking Pennsylvania adjusters to help stop this bill describes a 15% cap on every claim.⁷

Fifteen, eighteen, twenty

The bond was never the fight. Printer's No. 2487 carried the $40,000 figure on the day it was introduced, and it came through every amendment untouched.³ The percentage is what moved.

It moved upward both times.

The House did the structural work. Compare the introduced print against the one the House sent to the Senate and the additions are not subtle: a three-part definition of "catastrophic event" where the introduced bill had none, a definition of "settlement" that subtracts additional living expenses from the fee base, a rebuilt set of rescission windows, and a new criminal exposure for breaching the financial-interest section.² The Senate's amendment, offered in Banking and Insurance on June 9, 2026, moved the ceiling once more, from 18% to 20%.¹

Neither recorded floor vote on Printer's No. 3550 drew a single no. The Senate passed it 50 to 0, and Senator Chris Gebhard, whose committee amendment produced the 20%, voted for the bill carrying it.⁴ The House concurred 203 to 0, with no member voting against and none recorded absent.⁵

Where 20% actually ranks

Pennsylvania has had no percentage ceiling at all. Act 72 as it stands makes a public adjuster disclose the fee in the contract and have the insured initial it, and § 3.1 is titled "Written disclosure" for that reason; neither provision sets a number.¹ So the comparison that matters is not between 20% and some older Pennsylvania figure. It is between 20% and what the states that do cap have chosen.

We read the other fourteen states' codes. Georgia allows a third of the settlement, and nothing else comes close to it. Pennsylvania's 20% would tie Florida and Utah behind Georgia, and sit above the eleven remaining states: Iowa at 15%, New York at 12.5% on a first-party claim, Delaware at 12% above the first $25,000, and eight states at a flat 10%.

A 20% ceiling in a state that never had one is still a ceiling, and a firm that has been writing 25% or 30% contracts in Erie or Allegheny County will feel it in the spring. The point is narrower than the advocacy copy. Of the fifteen states that would cap an ordinary claim, only Georgia would let a Pennsylvania adjuster charge more than Pennsylvania does.

Prong three

The 10% tier is where a Pennsylvania file is most likely to land differently than the percentage suggests, and the reason is a definition the House wrote.

Printer's No. 2487 tied the catastrophic tier to a declaration. A catastrophic claim settlement arose from "a major disaster as declared by the President of the United States or a disaster emergency proclaimed by the Governor" under 35 Pa.C.S. § 7301.³ Two triggers, both of them public events with a date and a document.

The House replaced that with a defined term, "catastrophic event," and gave it three prongs joined by "any of the following."² The first two are the old declarations. The third is an incident, natural or human-caused, that results in any one of five things: substantial loss of life or serious bodily injury across a significant portion of the population; widespread destruction or disabling of critical infrastructure; overwhelming demand on local, regional or national emergency response systems; severe disruption of economic activity, including long-term impairment of commerce, employment or financial stability in the affected jurisdiction; or impairment of governmental or private-sector capacity to coordinate response and recovery.¹

No declaration is required for prong three. A February water main failure that takes out a neighborhood's drinking water, a derailment that closes a commercial corridor for a season, a regional flood the Governor never proclaims: each one is arguable under subparagraph (ii) or (iv), and the section that defines the term names no one to decide the argument. Prongs one and two resolve by looking up a document, because a presidential major disaster declaration and a gubernatorial proclamation under 35 Pa.C.S. § 7301 both have a number and a date.¹ Prong three has neither. Nothing in the section appoints a certifying official, directs the Department to publish a list, or sets a window that opens and closes on a declaration date, so the question of whether a given February loss belonged to an incident that disrupted economic activity severely enough to halve the fee is left to the parties.

The practical effect. Prong three turns the catastrophe tier into an argument rather than a lookup, and the argument happens in a fee dispute, after the work is done. A Pennsylvania file worked at 20% can be recharacterized as a 10% file by a carrier, an insured, or the Department reading the same five subclauses differently.

What comes out of the fee base

Three changes shrink the base the percentage is applied to, and they matter more than the gap between 18% and 20%.

"Settlement" is now a defined term: the money an insurer pays to settle a claim, "less amounts paid for additional living expenses."¹ Act 72 § 5(e)(4) closes the same door from the other side, voiding any contract term that permits an adjuster to charge a fee for the negotiation of additional living expenses or to withhold a fee from an ALE payment.¹ On a displacement-heavy residential fire, ALE is a meaningful share of what the carrier pays, and after the effective date none of it is commissionable.

Act 72 § 4.1(b)(1) ends retainers. No fee, retainer, compensation, deposit or other thing of value may be required, demanded or accepted before the claim settles. Section 4.1(b)(2) bars collecting a fee from any portion of a settlement offered to or received by the insured before the adjuster was retained, which makes the date of signature a number the file has to be able to prove.¹

Then there is Act 72 § 5(a.5), the provision for a carrier that pays fast. If an insurer pays or commits in writing to pay the policy limit within five business days of the loss being reported to it, the adjuster may not receive a commission consisting of a percentage of the total. Compensation becomes "reasonable compensation, as determined by the Insurance Commissioner," for time spent and expenses incurred during those five business days, and the adjuster takes on an affirmative duty to tell the insured the recovery might not increase.¹

§ 3.1, § 4117, and second cousins

Act 72 § 3.1 is titled "Written disclosure" today. The bill strikes that heading, replaces it with "Prohibition of financial interest," and inverts the section.¹ The current text tells an adjuster to disclose a financial interest in a construction firm, building appraisal firm, motor vehicle repair shop or other firm connected to the loss. The replacement forbids the interest: no direct or indirect financial interest in any aspect of the claim being adjusted, beyond the salary, fee or commission established in the written contract.

It reaches further than the adjuster. The prohibition covers the adjuster's employees, affiliates and "relatives," and the bill defines relative to include a spouse, parent, child, stepparent, stepchild, grandparent, grandchild, sibling, half sibling, aunt, uncle, niece, nephew, and first or second cousin.¹ A new subsection (a.1) adds a referral ban: no referring or directing an insured to any person the adjuster or one of those relatives holds a financial interest in, or may be compensated by for the referral. Section 6(a)(7) loses its escape hatch, the clause that made receiving a repair or salvage firm's referral fee acceptable if it was disclosed to the insured and agreed to in the contract.¹

The penalty is the part to read twice. Section 6(b.1) already made unlicensed public adjusting an offense under 18 Pa.C.S. § 4117, the insurance fraud statute, prosecutable as a third-degree felony. The House amendment extended that same subsection to cover a violation of § 3.1.² A second cousin's undisclosed stake in the restoration contractor on your file is no longer a licensing problem.

Other states have been building the same architecture from different directions. Illinois voided the public adjuster contract itself when the lead came from a roofer, and Virginia made the unlicensed contractor's work the licensee's problem. Louisiana went at the other end of the relationship and banned the anti-public-adjuster clause, then exempted the policies carrying it.

Governor Shapiro has not signed it. The General Assembly's bill-information page still shows the last action as "Signed in House, Oct. 20, 2026," which is the presiding officer's signature on the enrolled bill, not the Governor's.⁶ HB 1972 § 5 gives the act 180 days from enactment, so the clock has not started, and there is no Act number to cite yet.

What that buys is one drafting cycle. The contract form has to be approved by the Department before a license issues, the separate pre-contract disclosure under Act 72 § 4.3 is a second document carrying eight required elements, and compensation provisions may no longer be redacted in any copy of the contract given to the Insurance Commissioner.¹ A firm that waits for the Act number before rewriting its form will be doing that work against a 180-day clock that will already be running.