A new study, "Breaking Down Barriers," released by Pacific Research Institute examines the economic impact of duplicative licensing regulations on independent claims adjusters underscoring the need for increased licensing reciprocity among states. According to the study, the average claims adjuster holds between ten and twelve different state licenses, which can cost as high as $1,000 each. These costly, burdensome state requirements make it more difficult for adjusters to operate across state lines, driving up prices for consumers and limiting opportunities for new adjusters to enter the market.

"The current patchwork of overlapping licensing laws and regulations prevents qualified adjusters who work out-of-state from being able to timely process insurance claims," said Dr. Wayne Winegarden, a senior fellow for Business and Economics at the Pacific Research Institute and the author of the report. "These findings show that licensing reciprocity for claim adjusters can improve efficiency, reduce costs, and improve the quality of the services provided by these professionals to the great benefit of consumers."

Currently, 34 states require independent adjusters to hold a license, and inconsistencies within state requirements cause nearly all adjusters to face licensing and regulatory barriers when working across state lines. According to a recent survey by the Association of Claims Professionals, there are more than 125,000 independent claims adjusters working in the United States and the average adjuster must hold between ten and twelve different state licenses in order to operate effectively. These barriers make it difficult for adjusters to respond quickly to events like natural disasters, where timely processing of claims is needed in order to ensure recovery efforts respond as smoothly as possible.

Bipartisan legislation currently before Congress seeks to address these issues by requiring states to adopt uniform, reciprocal licensing laws for independent claims adjuster. The Claims Licensing Advancement for Interstate Matters Act (H.R. 3363), which was introduced in the U.S. House of Representatives by Representatives David Kustoff (R-TN) and Bill Foster (D-IL), would give states four years to reform their licensing laws to allow adjusters properly licensed in their home, or designated home, states, to process claims across state lines without discrimination. After that time, if licensing reciprocity has not been achieved by a certain state, independent adjusters would be able to apply for an inter-state license from the National Association of Registered Agents and Brokers.

"Consumers' ability to receive quick and effective claims adjusting services shouldn't be dictated by state borders," said Danielle Lisenbey, Chief Executive Officer of Broadspire, a Crawford & Company. "We must empower states to adopt uniform and reciprocal licensing laws so adjusters can timely and efficiently process claims.