Hiring A Private Insurance Adjuster: When And Why You Should

If you've experienced property damage, you may be wondering whether to hire a private insurance adjuster. This is a personal decision that depends on your unique situation. Private insurance adjusters can help you navigate the claims process, but they charge a fee, usually a percentage of your claim payout, which can be as high as 30%. Before hiring a private insurance adjuster, consider whether you can manage the process on your own or with the help of your insurance agent. If you decide to hire one, be sure to carefully review their contract and check their references.

When to hire a private insurance adjuster

There are several reasons why hiring a private insurance adjuster may be beneficial. Firstly, if you have suffered a large-scale loss, such as significant damage to your home, a private adjuster can help you obtain a larger payout from your insurance company. In such cases, you may feel that your insurance company's assessment is incorrect or that they do not have your best financial interests in mind. A private adjuster, who works exclusively for you, can provide a second opinion and advocate on your behalf.

Secondly, if you are having an unpleasant experience with the insurance company's adjuster, you may want to hire a private adjuster. This could be due to a lack of trust, poor communication, or a feeling that the adjuster is not being thorough or accurate in their evaluation.

Thirdly, if you have a busy schedule or limited time, hiring a private adjuster can reduce the burden of navigating the complex claims process. This process often involves completing paperwork, making phone calls, meeting with adjusters and inspectors, listing and evaluating the cost of damaged property, understanding insurance terminology, and negotiating a settlement.

Additionally, if you are dealing with a complex insurance policy or claim, a private adjuster can help you better understand the intricacies and ensure you don't miss out on any benefits you are entitled to.

It is important to note that hiring a private adjuster may not always be necessary or beneficial. Private adjusters charge fees, typically a percentage of the total settlement, which can reduce your overall reimbursement. There is also a risk of prolonging negotiations and unintentionally inflating claims. Therefore, it is essential to carefully consider your specific circumstances and weigh the potential benefits against the costs before deciding to hire a private insurance adjuster.

How to choose a private insurance adjuster

When choosing a private insurance adjuster, there are several factors to consider to ensure you select a qualified and experienced professional. Here are some guidelines to help you make an informed decision:

• Credentials and Licensing: Verify that the adjuster is licensed to practice in your state. Public insurance adjusters are required to be licensed in each state they work in and must participate in continuing education courses to maintain their licensure. Avoid hiring unlicensed individuals who claim to provide adjustment services, as this is against the law.
• Experience and Expertise: Consider the adjuster's level of experience and expertise. Ask about the types of claims they have handled, their success rate, and their familiarity with your type of claim and insurer. More experienced adjusters may charge higher fees, but their expertise could be valuable for complex cases.
• Referrals and Reviews: Seek referrals from friends, family, or acquaintances who have previously worked with public adjusters. A positive referral can indicate a reliable and trustworthy adjuster. Additionally, check online reviews and the Better Business Bureau (BBB) for any complaints or feedback from previous clients.
• Communication and Involvement: Discuss your preferred level of involvement in the claims process with the adjuster. Determine if they will handle your claim personally or if their firm may send multiple adjusters. Ensure you feel comfortable communicating with them throughout the process and that they are responsive to your queries.
• Fees and Contract: Understand the adjuster's fee structure, which typically ranges from 5% to 20% of the total settlement. Some adjusters may also charge a flat or hourly rate. Be sure to review the contract carefully, negotiate if necessary, and ensure you are comfortable with the fees before hiring them.
• State-Specific Considerations: Note that public adjusters' licensing and regulations may vary by state. For example, certain states like Alaska and Alabama do not provide licenses for public adjusters, while others, like Kansas, restrict their work to commercial claims only. Check with your state insurance department for specific information.

Remember to take your time in selecting a private insurance adjuster and trust your instincts. A good adjuster should make you feel confident and comfortable throughout the claims process, providing the expertise and support you need.

Cost of a private insurance adjuster

The cost of a private insurance adjuster varies depending on the nature of your claim, where you live, the adjuster you choose, and their fee structure.

Most public adjusters charge a percentage of the total claim payout, which could be anywhere from 3% to 30% of your insurance settlement. For example, if your final claim payment is $250,000 and your adjuster charges 10%, you will be paying them $25,000. In Texas, public adjusters can charge up to 10% of the total amount the company will pay for your claim.

Other common fee structures include a flat rate or hourly rate. A flat rate is usually charged for large but simple cases with very clear outcomes. An hourly rate depends on the state, the adjuster's experience, their operating costs, and the type of policy your claim falls under.

It is important to remember to settle a fee rate and way of payment with your public adjuster before you enter into any agreements. They should tell you upfront what their rate is and which method they use, and this should be added to your signed contract.

Some states also have rules and restrictions on when, how much, and the methods allowed for public adjuster fees charged. For example, public adjusters in Florida are not allowed to charge more than 20% of the final fee in a situation that isn't declared a disaster and not more than 10% if it has been declared a disaster.

Benefits of hiring a private insurance adjuster

Hiring a private insurance adjuster can be a good idea in certain situations. Here are some benefits of hiring a private insurance adjuster:

• Expertise and advocacy: Private insurance adjusters are trained professionals who understand the claims process and can help you navigate it. They work exclusively for the policyholder and advocate for your interests, ensuring that your claim is settled fairly and efficiently.
• Higher payout: A private adjuster may be able to negotiate a higher payout from your insurance company than you would get on your own. They are more likely to be thorough in their damage analysis and can help you understand your policy, track the claim, and meet deadlines.
• Save time and effort: Dealing with insurance claims can be time-consuming and complex, especially if it involves a large or complex claim. A private adjuster can handle the paperwork, phone calls, meetings, and negotiations with the insurance company, saving you time and effort.
• Better understanding of the claims process: Insurance policies and claims can be intricate and involve complex steps, terminology, and math. A private adjuster can help you understand the process and represent you effectively during negotiations.
• Help with large or complex claims: If you have a very large or complex claim, such as significant damage to your home, a private adjuster can provide valuable assistance in navigating the claims process and ensuring you receive a fair settlement.
• Second opinion: If you are unsure about the assessment or payout offered by your insurance company, a private adjuster can provide a second opinion and advocate on your behalf.

While there are benefits to hiring a private insurance adjuster, it is important to consider the potential costs and weigh them against the expected benefits. It is also essential to choose a reputable and experienced adjuster with good references to ensure a positive outcome.

Drawbacks of hiring a private insurance adjuster

While hiring a private insurance adjuster can be beneficial in many ways, there are also some potential drawbacks to consider. Here are some disadvantages of hiring a private insurance adjuster:

Cost

Private insurance adjusters typically charge a percentage of the total claim payout, which can be as high as 10% or even 30% of your insurance settlement. For example, if your final settlement is $100,000 and the adjuster charges 10%, you will owe them $10,000. This can significantly reduce the net payout you receive from your insurance claim. In some cases, the cost of hiring a private adjuster may outweigh the additional money they can secure for you in your settlement.

Time

Involving a private adjuster in the claims process can potentially slow it down. Increased negotiations between the private adjuster and the insurance company's adjuster may lead to delays. If a settlement cannot be reached, legal proceedings may be necessary, further extending the time it takes to resolve the claim.

Availability for Smaller Claims

Private insurance adjusters often focus on substantial claims with significant payouts because their earnings are based on the final settlement amount. It can be challenging to engage a private adjuster for smaller claims, as they may not find them financially worthwhile.

Selection Process

Selecting and hiring a private adjuster takes time and effort. You will want to ensure that the person you choose is capable of delivering the results you are hoping for. This includes checking their licensing and credentials, reading reviews, seeking referrals, understanding their fees, and evaluating their communication and relevant experience. All of this takes time and effort, and during this process, your claim is delayed while you continue to deal with the effects of the incident that led to the claim.

Complexity of the Claims Process

In some cases, the insurance company's adjuster may be very experienced and adept at guiding you through the claims process. With their help, you may find that the process is simpler than you expected and that you can navigate it without the assistance of a private adjuster. Your insurance agent can also guide and advocate for you throughout the process, offering the same guidance that a private adjuster would charge a fee for.

Frequently asked questions