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ARIZONA STATE SENATE
Fifty-Seventh Legislature, Second Regular Session
AMENDED
storm related insurance claims
Purpose
Prohibits an adjuster and a contractor from soliciting services while a loss-producing event or emergency response is active and prohibits a contractor from advertising to pay, promising to pay or paying a policyholder's insurance deductible.
Background
An adjuster is any person who investigates or negotiates settlement of claims arising under property and casualty insurance contracts on behalf of either the insurer or the insured. Adjusters must be licensed by the Department of Insurance and Financial Institutions. A contractor, synonymous with the term builder, is any person or business entity that, for compensation, undertakes, offers or purports to have the capacity to perform construction services. A contractor may work directly or indirectly to construct, alter, repair, improve or demolish any structure, project or development (A.R.S. §§ 20-321 and 20-321.01).
Statute outlines specific regulations regarding contracts for residential repair or replacement of damage resulting directly from a catastrophic storm, including a property owner's right to cancel a contract within 72 hours of an insurance claim denial or within four business days of signing the contract. A contractor may not act on a property owner's behalf to negotiate settlement of claim or loss or make assurances of insurance policy coverage. Failing to comply with regulations regarding contracts for residential repair or replacement of damage resulting directly from a catastrophic storm subjects the contractor’s license to suspension or revocation (A.R.S. § 32-1158.02).
There is no anticipated fiscal impact to the state General Fund associated with this legislation.
Provisions
1. Prohibits an adjuster from participating, directly or indirectly, including as a contractor or subcontractor, in the restoration, reconstruction or repair of any damaged premises or property that is the subject of a claim adjusted by the adjuster.
2. Prohibits a contractor providing post-storm repair or replacement contracting services from also acting as an adjuster on behalf of the insured for the claim.
3. Prohibits a contractor, when an insured owner submits a claim for residential repair or replacement of damage resulting from a catastrophic storm, from advertising to pay, issuing a payment for or promising to pay any deductible payable on the policy or issuing any rebate deductible either directly or indirectly.
4. Prohibits an adjuster from proposing or attempting to propose to any insured that the adjuster represents the insured while a loss-producing occurrence is continuing at the damaged premises or while the fire department or any other public safety service is engaged in a public safety emergency response at the damaged premises.
5. Prohibits a contractor from proposing to any person that the person sign an agreement for work on any damaged premises while a loss-producing occurrence is continuing at the damaged premises or while the fire department or any other public safety service is engaged in a public safety emergency response at the damaged premises.
6. Prohibits an adjuster from endorsing payment instruments issued to an insured as a result of a claim arising under an insurance contract without the insured's direct endorsement and signature.
7. Defines adjust meaning to investigate or negotiate the settlement of a claim arising pursuant to a property and casualty insurance contract.
8. Modifies the definition of adjuster to include, any person who for compensation, fee or commission, directly or indirectly solicits business from, investigates or advises an insured about claims arising pursuant to property and casualty insurance contracts for a person that adjusts claims on behalf of either the insurer or the insured.
9. Makes technical and conforming changes.
10. Becomes effective on the general effective date.
Amendments Adopted by Committee
1) Prohibits an adjuster, rather than a public adjuster, from:
a) participating, directly or indirectly, including as a contractor or subcontractor, in the restoration, reconstruction or repair of any damaged premises or property that is the subject of a claim adjusted by the adjuster; and
b) proposing or attempting to propose to any insured that the adjuster currently represents, rather than previously represented the insured, while a loss-producing occurrence is continuing at the damaged premises or while the fire department or any other public safety service is engaged in a public safety emergency response at the damaged premises.
2) Prohibits an adjuster from endorsing payment instruments issued to an insured as a result of a claim arising under an insurance contract without the insured's direct endorsement and signature.
3) Defines adjust and modifies the definition of adjuster.
4) Makes technical and conforming changes.
Senate Action
FIN 2/16/26 DPA 5-1-1
Prepared by Senate Research
February 18, 2026
MG/SJ/hk