What is reciprocity? And why does understanding it help you become a more valuable Insurance Adjuster?

Reciprocity is a term you may have heard thrown around a lot and it’s often misunderstood. Understanding it correctly can make all the difference.

First things first, as we talked about in our last post the first step in becoming an insurance adjuster is to get licensed in the state in which you live. Skipping this step will complicate things in the future so no matter what you’ve heard, get your home state license first. If the state you live in does not require licensing, then you should choose a state to obtain your “Designated Home State” License (also referred to as a “DHS” License), this allows you to maintain an adjuster’s license in a state other than your home state (only if your home state does not issue licenses). This state will “stand in” as your home state for “reciprocity” purposes. More on that here.

So, once you have your home state license or your DHS License what does reciprocity mean to you?

By definition reciprocity is: A mutual exchange of privileges. Specifically: a recognition by one of two countries or institutions of the validity of licenses or privileges granted by the other.

It’s important to note what it does NOT mean. This does not mean that if you have a license in Georgia for example, that you can just automatically cross the border and adjust claims in Florida simply because those two states hold a reciprocal agreement. What it DOES mean is that you may APPLY for the Florida license without taking the state exam or a pre-licensing course.

Reciprocity in insurance is defined as: A mutual agreement between states: an adjuster who holds a license in their own state and is in good standing (meets CE requirements), can apply for a license in another state without taking that state’s exam or a pre-licensing course.

So even if your home state has a reciprocity agreement with another state that you wish to secure a license in, you still have to do an application, pay application fees, possibly do fingerprints, etc.

Why would you want a license in more than one state? Well to put it simply, the more licenses you have, the more valuable you are. Insurance carriers and independent adjusting firms need adjusters who can work wherever claims happen. When a large catastrophe happens in a specific state, the company will know which employees hold a license in that state and they can send them there. Holding licenses in multiple states makes you attractive to employers, increases your revenue and allows you to help whenever and wherever you are needed.

So now for the question you really want answered. Which states hold reciprocity agreements?

Most states requiring an adjuster’s license play nice in the sandbox with everyone else.

Let’s use Texas as an example to see how the concept of reciprocity works.

 

 

 

 

 

 

 

 

 

 

The map above provides a high-level picture of the adjuster licensing requirements and agreements across the country in relation to Texas.

All the states in ORANGE are Reciprocal with Texas- All of these states share reciprocity agreements with Texas. Once you hold a Texas resident adjuster’s license, you will be able to apply for your license in any of these states without sitting for their state exam or taking a pre-licensing course.

All the states in BLUE have No Licensing Requirement – The states listed here do not require the licensing of adjusters. If you happen to live in one of these states and want to secure your license in the many states that do require licensure, you can take the Texas examination or this course and apply for a Texas “Designated Home State” (DHS) license. Texas will then act as your “home state” for licensing and CE purposes and you will be able to apply for non-resident licenses in the states that are reciprocal with Texas.

*Texas and Florida are the most sought-after states for a DHS license. In our next post, we will share which of these states provides the quickest and easiest route to a DHS license.

The states in RED- Exam Required- These are the states that don’t play with anyone. California and New York are unique in that they do not hold reciprocity agreements with any state. If you want to become licensed to adjust claims in either of these states, you will be required to sit for and pass their state exam. The New York Independent General Adjuster license exam proudly boasts its reputation as the most difficult adjuster licensing course in the United States. Fortunately, AE21 Online is likewise proud to launch the fastest, most flexible and effective way of preparing for the New York IGA Exam as administered by Prometric! Because of the difficulty of this exam and NY regulations, adjusters licensed in New York are in high demand. It can definitely be worth the effort to get licensed in New York and we can help make that happen.

A Note about Alaska and Arkansas– Alaska and Arkansas do not accept the Designated Home State License for reciprocity purposes. If you are a non-resident of Texas and hold a Texas DHS license, you will be required to take and pass Arkansas’ and Alaska’s state exams to secure a non-resident license. But this only applies to Designated Home State licenses. If you are a Texas resident with a Texas resident license, you will be able to take advantage of reciprocity in these states.

If you have any questions about reciprocity that weren’t answered by this post, please feel free to reach out to us. Contact Us.

Florida is arguably the easiest and fastest DHS license to get and many people don’t realize that.

---