So, you want to be an adjuster, but you find out that your state does not license insurance adjusters. What do you do now? If you’re in this situation, you’ll need what’s called a Designated Home State, or “DHS” license.
The Designated Home State license was created to provide residents of non-licensing states a means to designate a home state for the purposes of reciprocity and compliance. Why would you want to do that? Read on!
Let’s say, for example, that you live in Kansas but you want to be able to work hurricane claims in the gulf. Kansas doesn’t require adjusters to hold a license to handle claims in their state, however, the gulf states do so you need reciprocal licenses to work those hurricane claims. But…you can’t apply for reciprocal licenses without your home state license and your home state doesn’t license. Enter the DHS!
You ‘declare’ a home state and go through the licensing process there. Your new DHS license will act just like a standard home state license does for residents of licensing states.
But which state’s DHS license should you choose?
For a long time, Texas was the answer. They offered the license early on and made reciprocal agreements with most other states. But we’ve come a long way since then. Today, most states offer a DHS license although it’s important to note that they are not equal. So what should you consider when choosing a DHS in today’s market? Let’s take a look at some of the factors that should play into your decision.
- Proximity to your home state doesn’t matter: Some people pick DHS licenses based on how close that state is to their resident state. While that is an option, it honestly offers NO benefits. Most states don’t require you to be present during the licensing process so choose the license that is the easiest to get and fits your needs.
- Get the best reciprocity: There is a myth that only Texas carries reciprocity with everyone. The truth is, today most states have the same reciprocity (check out our map for your state’s reciprocity). There are some outliers like New York, California, and Hawaii, but for the most part, licensing states in today’s claims industry are mostly reciprocal with one another.
- FYI: Arizona and Alaska do not recognize DHS licenses from any state. All DHS adjusters must pass their state exams to obtain those licenses.
- Choose the most comprehensive license: Even if you don’t think you will need an All Lines or General license, for reciprocity’s sake it’s best to obtain the license with the most lines of authority. Reciprocal licenses are often granted on the basis of equality.
- Not every state offers the same license types so an adjuster’s best chance at getting the most reciprocal licenses lies in obtaining the most comprehensive license. Let’s look at an example:
Texas offers a P&C Adjuster license but many other states, like Florida, do not. They only offer a General Lines or All Lines license. Since the P&C covers fewer lines, it is not reciprocal with the more all-encompassing licenses. In this case, a Texas P&C adjuster would be denied a reciprocal Florida license because there is no ‘only P&C’ equivalent in Florida.
- Choose a license with a fingerprint requirement: While it may save you time and money to start, skipping this requirement can hurt you in the long run. Lack of fingerprinting often results in you having to get fingerprinted multiple times down the road to obtain other state licenses. If your DHS license has a fingerprint requirement, you won’t have to get them done again when applying for reciprocal licenses.
- Pick a license with a 24-hour CE requirement: Like fingerprinting, not having a CE requirement might sound like an advantage at first, but it will lead to headaches down the road. If your DHS license doesn’t have a CE requirement, but you have 3 other licenses that do, you’ll have to choose one of those states to be your “DHS license for CE”. It’s not the end of the world, but it adds another layer to the process that you have to stay on top of.
- Simplest is best: Some states make you do paper applications, have difficult exams, or require additional documents. Choosing a DHS state where the testing and licensing process is simple and straightforward will make things easier. We recommend looking for a state that offers the following:
- Pre-licensing and exam are available online, such as our Florida course
- No bonds or additional paperwork are required beyond fingerprinting
- Shorter exam
So, which DHS license does AdjusterPro recommend?
If you do the math on everything we mentioned above, Florida is the state that meets or exceeds all the criteria we’ve discussed.
Florida’s pre-licensing and exam can be done entirely online, without a proctor. Their All-Lines license has great reciprocity and the exam is 50% shorter than some others. Florida meets all the CE and fingerprinting requirements as well. Also, they’re the quickest state in turning around applications (usually in a few days or less). You can find more information from the state about the license on the Florida DFS website.
Texas has been the most common DHS license for a long time. It is another state we recommend although it does have some drawbacks. Texas offers online pre-licensing and exams, but the exam is significantly longer and requires a proctor. The state has made recent commitments to improve its processing time but again, there is just no beating Florida there.
Want to take a look at the reciprocity of different licenses? Adjusters can see where they can get reciprocal licenses in our interactive reciprocity map.
Still have questions about what license you should get? Contact our expert customer support team and they’d be happy to walk you through the process and answer any questions you may have.