Contractors Must Stick to Construction — Not Insurance

Why the court’s ruling matters

The ruling affirms a basic principle: construction and claims negotiation are two different services. Contractors bring expertise in building, materials, and repairs. Public adjusters bring expertise in policy language, documentation, and negotiation with insurers. When contractors attempt to act outside their scope, they risk liability, fines, and even criminal penalties.

More importantly, homeowners may be left unprotected. Insurance carriers are sophisticated entities with legal teams and financial incentives to minimize payouts. Contractors, on the other hand, are not trained or licensed to stand toe-to-toe with them in a claims dispute. This is where public adjusters step in, ensuring that policyholders receive fair and full compensation.

How we got here: The blurred line

After major storms, the line between contractor and claim advocate has historically blurred. Homeowners desperate for repairs often turn to the first professional who offers to “handle everything.” Some contractors, trying to be helpful or simply competitive, have stepped into the claim negotiation process.

But even with the best intentions, contractors aren’t prepared for the complexity of insurance claims. They may lack the ability to interpret policy exclusions, prepare evidence in the way carriers require, or effectively push back against lowball offers. This leaves homeowners vulnerable to underpayment, and it exposes contractors to lawsuits and regulatory action.

The Texas Supreme Court ruling sent a strong message: those days are over. Contractors can’t play both roles. Not unlicensed, anyway.

Protecting homeowners and contractors

When roles are blurred, everyone loses. Contractors who negotiate claims put themselves in legal jeopardy and may compromise their reputation in the process. Homeowners, meanwhile, could end up with underpaid claims or incomplete repairs.

The Texas Supreme Court ruling reinforces that the safest, most effective approach is for each professional to stay in their lane. Contractors should focus on rebuilding, while licensed public adjusters handle the insurance process. This separation not only shields contractors from liability but also ensures homeowners have a dedicated advocate protecting their financial interests.

Public adjusters are trained to assess damage, prepare detailed estimates, and negotiate directly with carriers. They understand how exclusions, sub-limits, and policy endorsements can affect payouts, knowledge that most contractors, understandably, do not possess. By documenting damage and presenting claims in the proper format, public adjusters greatly increase the likelihood of a fair settlement.

For contractors, staying out of the claims process has another benefit: it allows them to maintain trust. Homeowners hire builders to restore their homes, not to navigate legal disputes. When contractors stick to their expertise, they deliver what clients value most — quality construction completed on time. When contractors partner with public adjusters rather than trying to replace them, they can help ensure that the client receives enough settlement money to pay for their services. And the homeowner benefits from both strong advocacy and skilled craftsmanship.

In short, clear boundaries protect everyone. Homeowners get fair compensation and timely repairs. Contractors avoid legal risk and keep their businesses focused on what they do best. And insurers are held accountable by professionals with the authority to challenge underpayments.

Best practices for builders supporting clients

Builders can still support clients in the insurance process without crossing the line. A few best practices include:

• Refer to licensed professionals: Take high-resolution photos, keep receipts for materials, and prepare accurate estimates. These records can support a public adjuster’s case.

• Partner with licensed public adjusters: Building referral relationships with trusted adjusters creates a win-win scenario: contractors stay compliant, and homeowners get the advocacy they need.

• Educate clients: Many homeowners think the 2-3 page declarations sheet is their full policy. In reality, policies run 30-60 pages and contain exclusions, sub-limits, and endorsements that affect claims. Contractors can encourage clients to request the full policy upfront.

• Focus on quality repair: The best way for a contractor to protect a client in the long term is to ensure the work is done to code, with quality materials, and in line with any requirements for insurance reimbursement.

By staying within their lane, contractors avoid exposure while helping ensure their clients’ claims are resolved fairly.

Why public adjusters are essential

Unlike insurance adjusters, who work for the carrier, or independent adjusters, who are essentially freelance insurance adjusters, public adjusters work exclusively for policyholders. Their job is to interpret the policy, document the loss, prepare estimates, and negotiate directly with insurers.

Think of them as the policyholder’s advocate in a process where the deck is often stacked against the insured. Using a public adjuster can make the difference between a settlement that covers 60% of costs and one that fully funds a rebuild.

As climate change drives more frequent disasters and insurers tighten their practices, the demand for public adjusters will only rise. Homeowners need experts who can hold carriers accountable, and contractors need partners who can keep them out of regulatory trouble.

The Bottom Line

The Texas Supreme Court’s decision is a reminder that boundaries matter. Contractors build. Public adjusters advocate. When both stick to their roles, homeowners get the strongest protection possible — safe, high-quality repairs paid for by fair insurance settlements.

Homeowners navigating a claim should remember this distinction and seek the right licensed professional for the right job. It’s the best way to protect your property, peace of mind, and long-term financial well-being.

Theodore (Ted) Patestos is co-founder and CEO of Tiger Adjusters. A seasoned innovator and policyholder advocate in the public adjusting industry, Patestos consistently champions tools and strategies that bring greater transparency, efficiency, and value to both consumers and adjusters. His work includes the development of systems and the forward-thinking technologies that reduce friction in the claims process. Tiger Adjusters has recovered millions of dollars in settlements on behalf of clients across the country.

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