Assembly Bill 597 is working its way through the California Legislature and could soon become law. If passed in its current form, the bill would severely restrict how public adjusters can charge their clients in the wake of catastrophic events—and it is policyholders who will pay the price, as many may lose access to adjusters unwilling to take on their claims.
AB 597 imposes a 15% cap on fees that public adjusters can charge for disaster-related residential and certain commercial claims. The cap itself isn’t the real problem—most adjusters already charge well below that for catastrophe losses, such as those from the recent Los Angeles County wildfires. The issue lies in how the fee is calculated: only on “new money” paid by the insurer after the adjuster is retained.
Under current California law, public adjusters may charge a percentage based on the total amount ultimately recovered. (California Insurance Code § 15027.) That includes amounts paid before and after the contract is signed, as long as the policyholder isn’t left in a worse financial position than if they had handled the claim on their own. This structure makes it economically feasible for adjusters to step in mid-claim—often after delays, underpayments, or denials—and still commit the time and resources needed to handle the rest of the claim.
AB 597 would eliminate that option. Take, for example, a homeowner with a $1 million insurance claim who has already been paid $800,000 before engaging a public adjuster. If the adjuster recovers the remaining $200,000, current law allows them to charge a fee based on the full claim amount. Under AB 597, however, the fee would be capped at 15% of only the additional recovery—just $30,000. While the bill is well-intentioned, this change could have unintended consequences, potentially discouraging adjusters from taking on complex or partially paid claims. This is especially concerning in rural or underserved communities, where policyholders already struggle to find qualified representation and where the potential cost and effort required to pursue these claims may exceed the compensation available under the proposed cap.
In practice, the bill could make it harder—not easier—for homeowners to get the professional help they need after fires, floods, or earthquakes. While AB 597 claims to protect consumers, it risks doing the opposite by potentially reducing access to qualified, licensed adjusters—often the most cost-effective advocates for policyholders.
As General Counsel for the Pacific Coast Association of Public Insurance Adjusters (PCAPIA), I can attest that our board and members are actively engaging with legislators to ensure that any reform—including AB 597—balances consumer protection with practical, common-sense solutions. California should absolutely guard against unfair fees, but those safeguards must reflect the actual dynamics of how insurance claims are handled.
You can follow the bill’s progress here: AB 597 Legislative Status.
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