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A 4390

Extends limitations on the shift between classes of taxable property in the town of Orangetown, County of Rockland

2025 Regular Session Introduced by Pat Carroll

NJ's Chapter 158 requires written public adjuster contracts with license numbers, a 3-day cancellation window, escrowed claim funds, and fee limits to protect insureds.

SIGNED CHAP.158
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Bill Summary · A 4390

Summary — A4390 (signed into law as Chapter 158)

Note: Although the header on the provided materials referenced Orangetown property tax rules, the text and legislative history for A4390 address licensing, contract terms, and consumer protections for public adjusters. This summary reflects the actual bill content enacted as Chapter 158.

Purpose

A4390 strengthens consumer protections in contracts between licensed public adjusters and insureds in New Jersey by prescribing required contract information, cancellation rights, limits on certain contract terms, escrow handling of claim funds, and related regulatory authority.

Key provisions

  • Written-contract requirement

    • A public adjuster has no right to compensation from an insured unless there is a written contract signed by both parties.
    • The contract must include the adjuster’s license number and, if applicable, the license number of the public adjusting firm.

  • Required contract content and form

    • Contracts must clearly define the services to be provided, the amount or method of compensation, and the insured’s right to cancel or terminate.
    • The Commissioner of Banking and Insurance may prescribe form and language and promulgate regulations about the notice of the right to cancel.
    • The bill supplies sample statements describing services and a model “Notice of Right to Cancel.”

  • Right to cancel and payment obligations

    • Insureds may cancel the contract without penalty prior to midnight of the third business day after signing.
    • If an insured cancels within that three-business-day window, the insured remains liable only for reasonable expenses and necessary emergency out‑of‑pocket expenses or services that were approved by the insured and were required to protect the insured’s interest between signing and cancellation.
    • If an insured terminates the contract after midnight on the third business day, the insured is obligated to pay, from any insurance proceeds recovered (before or after termination), a fee reflecting the reasonable value of services provided, supported by records.

  • Contract limitations on compensation and remedies

    • For fee contracts that pay a percentage of insurer payments for homeowner claims, the contract may not:
    • Allow the adjuster to collect the entire fee from the insurer’s first installment if the insurer pays the claim in multiple payments;
    • Require the insured to have insurer checks issued only in the adjuster’s name;
    • Bar either the adjuster or the insured from pursuing civil remedies.

  • Escrow and handling of claim funds

    • Public adjusters may not receive, accept, or hold settlement funds on an insured’s behalf unless those funds are deposited in an escrow account at an insured banking institution or savings and loan association in New Jersey.
    • The bill removes prior statutory language requiring the escrow account to be interest-bearing.
    • Funds held in escrow (and interest, if any) remain the insured’s property; in the adjuster’s insolvency/bankruptcy, the insured’s claim to settlement funds constitutes a statutory trust.

  • Other conduct rules

    • Prohibits solicitation or entering into adjustment agreements with an insured during the 24 hours after a loss between 6:00 p.m. and 8:00 a.m.
    • Prohibits inducing cancellation of an existing adjuster contract, making misrepresentations, or giving legal advice in the course of adjusting.

  • Administrative authority and technical clarifications (from floor amendment)

    • Confirms certain sample statements are sufficient to define services and cancellation rights.
    • Allows cancellation via email.
    • Grants the Commissioner authority to adopt implementing regulations.

Who is affected

  • Primary: licensed public adjusters and public adjusting firms operating in New Jersey.
  • Secondary: insured homeowners and other insureds who may hire public adjusters; insurers and banking institutions holding adjuster escrow accounts.

Timeline / procedural status

  • Introduced: May 16, 2024.
  • Committee report: Sept 12, 2024 (Assembly Regulated Professions Committee).
  • Amended and passed by the Legislature (Assembly floor amendment Feb 27, 2025; passed Assembly and Senate May–June 2025; substituted for companion bills S1320/S5221 as appropriate).
  • Delivered to and signed by the Governor: June 26, 2025 — enacted as Chapter 158.
  • Effective date: 180 days after enactment (i.e., the law takes effect 180 days after June 26, 2025, unless otherwise specified).

Impact

  • Enhances consumer disclosure and cancellation protections in adjuster contracts.
  • Imposes stricter procedural and recordkeeping expectations on adjusters (e.g., documentation to support fees recoverable from insurance proceeds).
  • Limits certain adjuster contract practices that could disadvantage insureds (e.g., full-fee collection on first installment, requirement that insurer checks be made payable only to adjuster).
  • Gives the Commissioner of Banking and Insurance regulatory authority to standardize required notices and forms.

Compiled from official sources — confirm details with the bill’s official record.

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