Can Your Insurance Policy Prohibit Hiring a Public Adjuster?

Yes, some policies ban it

Most homeowners never read every endorsement attached to their insurance policy. Buried in the fine print, some policies include an "anti-public adjuster endorsement," a clause that says you can't hire or use a public adjuster.

These clauses are rare. But in late 2025, a federal court ruled that insurers can enforce them.

The case: Barbato v. Interstate Fire & Casualty Co.

In December 2025, the U.S. District Court for the Southern District of New York decided Barbato v. Interstate Fire & Cas. Co.

A property owner hired North Jersey Public Adjusters (NJPA) to help with a fire loss claim on an apartment building. The insurance policy had an endorsement saying the insured could not "hire or otherwise utilize the services of a public adjuster." The insurer told the property owner to terminate the PA contract. The owner did. NJPA lost a prospective five percent fee on the insurance proceeds.

NJPA sued the insurer, arguing tortious interference with contract, tortious interference with economic advantage, and restraint of trade.

The court tossed all three claims. Enforcing a contractual right that both parties agreed to isn't "wrongful conduct." The insurer was exercising a provision in its own policy.

The dismissal was without prejudice, so the claims could be refiled with better arguments. But the takeaway is plain: anti-public adjuster clauses are enforceable under New York law.

Why insurers do this

Public adjusters advocate for higher settlements. That costs the insurer more money. Banning policyholders from hiring one removes an adversary from the claims process. That's really the whole reason.

Insurers will also say that public adjusters slow down claims or inflate repair estimates. Whether that's true is another question. Public adjusters recover significantly more on average for policyholders, which is precisely why insurers don't want them involved.

Are these clauses legal everywhere?

It depends on the state. A ruling in a New York federal court doesn't bind other jurisdictions.

State insurance departments regulate policy language, and some won't approve endorsements that restrict a policyholder's right to representation. Consumer protection statutes vary too. An anti-PA clause might survive in one state and get struck down in another.

There's also a broader tension: every state that licenses public adjusters has built a regulatory framework that assumes policyholders can hire them. A policy clause that undercuts that framework is at least awkward, even if no court has said so yet.

No state insurance department has explicitly banned anti-PA endorsements. But no state has blessed them across the board, either.

What to do if your policy has this clause

Before you file a claim

Look through your policy for endorsements or riders that mention "public adjuster," "claims representative," or "third-party assistance." These are usually separate pages stapled to the back.

If you're shopping for insurance or renewing, ask your agent directly whether the policy restricts hiring a public adjuster. If it does and you live somewhere prone to hurricanes, wildfires, or flooding, that clause could cost you tens of thousands on a future claim. A policy without the restriction may be worth a higher premium.

After a loss

If your insurer asks you to sign anything after a loss, read every word. Some documents slip in a waiver of your right to hire a PA even if the original policy didn't restrict it.

If your policy does have an anti-PA endorsement and you're facing a big claim, talk to an insurance attorney. They can tell you whether the clause holds up in your state. Your state Department of Insurance can also tell you whether the endorsement language was approved and whether complaints have been filed about it.

One more thing: even if you can't use a public adjuster, you can still hire an insurance attorney. Attorneys aren't covered by anti-PA endorsements.

Worth watching

These endorsements are still rare in standard homeowners policies. They show up more in commercial property policies, like the one in Barbato.

But now there's a court saying they're enforceable. If more insurers notice, more of them will try it, including on residential policies. If you haven't checked your policy for this language, now is a good time.