A new South Carolina law limits how public adjusters can charge clients—and most business owners don't know it yet.
If you operate as a public adjuster in South Carolina, or hire one to handle insurance claims for your clients, you need to know about a provision buried in Bill S0196 that took effect May 19, 2026. It fundamentally changes how you can structure compensation—and most professionals haven't adjusted their practices yet.
Section 38-92-120(E) of South Carolina's insurance code now imposes two hard limits on public adjuster compensation:
A 10% fee cap. Public adjusters cannot collect more than 10% of any insurance settlement they help secure for a client. This applies whether you're a solo practitioner or part of a larger firm. The cap is statutory—meaning it's written into law, not a guideline or industry standard.
No upfront fees or retainers. You cannot collect any payment before a claim settles. This means every engagement operates on deferred compensation. You do the work first, get paid only after the insurance company pays the client.
This provision applies directly to:
If you're licensed to perform public adjustment work in the state, or you employ someone who does, this law binds your fee structure.
The practical impact is significant. A 10% cap compresses margins on every settlement you handle. For a $100,000 claim, your maximum fee is $10,000—before expenses, overhead, and staff time. For smaller claims, the math becomes tighter.
The no-upfront-fees rule creates cash flow pressure. You're financing every engagement out of pocket until settlement. This affects how you price your services, how many concurrent cases you can handle, and how you manage working capital. Firms accustomed to retainers or hourly billing will need to restructure their business model entirely.
If you've been charging differently—whether higher percentages, upfront fees, or hybrid arrangements—you're now out of compliance. Continuing to do so exposes you to regulatory action and potential liability.
Review your current client agreements and fee schedules. If any contract promises more than 10%, or collects payment before settlement, it violates the law as of May 19, 2026. Update your standard engagement letters and fee disclosures to reflect the new limits.
Consider your cash flow strategy. If deferred compensation creates hardship, you may need to adjust case volume, pricing structure for other services, or staffing levels.
Document your compliance. Keep records showing that fees charged do not exceed 10% and that no upfront payments were collected.
If you work with clients who hire public adjusters, make sure they understand the new fee structure so there are no surprises at settlement.
This summary reflects the text of S.C. Bill S0196, Section 38-92-120(E), effective May 19, 2026. For detailed guidance specific to your situation, consult a South Carolina insurance attorney or your professional association.