Understanding The Role Of Public Adjusters In Insurance Claims

A public adjuster is an independent insurance professional that a policyholder may hire to help settle an insurance claim on their behalf. When you file a claim, your insurance company will assign a claims adjuster to evaluate your property damage and determine a fair payout amount. However, some policyholders choose to hire a public adjuster instead. Like a claims adjuster, a public adjuster will assess the damage to your property, help determine the scope of repairs, and estimate the replacement value for those repairs. The key difference is that a public adjuster works for you, the policyholder, and advocates exclusively for your interests. They can help ensure that your payout is fair and accurate, saving you time and providing expertise in the claims process.

When to hire a public adjuster

A public adjuster is an independent, trained insurance professional who helps individuals with the insurance claim process. They are licensed experts in the details and language of insurance policies, as well as filing and adjusting claims. They can be hired by homeowners, business owners, and other policyholders to represent their interests in the claims process.

So, when should you hire a public adjuster? Here are some key indicators:

• Large or Complex Claims: If you're filing a large or complex insurance claim, especially for high-value, significant, or complex damage to your home, such as fire, flood, or storm damage, a public adjuster can guide you through the process and ensure your claim is thorough and accurate. They can also help you understand your policy and identify covered damages.
• Inadequate Assessment or Payout: If you feel that the assessment performed by your insurance company's adjuster is insufficient or that your payout is not fair, a public adjuster can provide an independent evaluation of your property loss. They work exclusively for the policyholder and can negotiate with your insurance company to achieve a fairer settlement.
• Difficulty Understanding Policy Language: Insurance policies often contain complex provisions, processes, clauses, and legal terms that can be challenging to understand. Public adjusters are trained to interpret these policies and can help you maximize your settlement by ensuring you claim all relevant expenses.
• Time Constraints: Dealing with insurance claims can be time-consuming, especially when managing the aftermath of property damage or business interruption. Public adjusters can save you time by handling all the paperwork, communications, and negotiations with the insurance company, allowing you to focus on other priorities, such as business recovery or personal matters.
• Lack of Timely Response from Insurance Company: If your insurance company is not responding to your calls or addressing your concerns in a timely manner, a public adjuster can step in and communicate directly with the insurance company on your behalf. They can expedite the process and ensure your claim doesn't get neglected.
• Quick Payoff Offers: Sometimes, insurance companies may try to settle claims quickly with low-ball offers, hoping that the policyholder will accept without fully understanding their rights. A public adjuster can assess if such offers are fair and help you avoid being short-changed.

Remember, there's no specific rule for hiring a public adjuster, but they can be a valuable asset in navigating the complex world of insurance claims and ensuring you receive a fair and full settlement.

How to find a good public adjuster

A public adjuster is an insurance professional that a policyholder may hire to help settle an insurance claim on their behalf. They are independent and work for the policyholder, unlike a company adjuster who works for the insurance company.

• Get referrals: Ask friends and family for recommendations. You can also find adjusters in your area through the National Association of Public Insurance Adjusters (NAPIA).
• Check licensing and qualifications: Ensure the adjuster is licensed in your state and has the necessary qualifications. Many state insurance departments allow you to verify licenses online.
• Check their experience: Look for an adjuster with experience handling claims similar to yours. Ask them about the types of claims they have worked on, their experience with your insurer, and how long they have been in practice.
• Check reviews and references: Look for online reviews and ask the adjuster for references from previous clients to gauge their reputation and level of satisfaction.
• Understand the fee structure: Be clear about the fees upfront. Public adjusters typically charge a percentage of the final claim payout, ranging from 5% to 20%. However, they may also charge a flat or hourly rate.
• Communication and availability: Choose an adjuster who is responsive and keeps you informed throughout the process. Assess their communication style to ensure it aligns with your preferences.
• Review the contract carefully: Take the time to read and understand the contract before signing. Ask questions if anything is unclear.

Pros and cons of hiring a public adjuster

A public adjuster is a professional who can be hired by homeowners, business owners, and other policyholders to represent their interests in the claims process. They work for the property owner, not the insurance company, and their role is to help policyholders receive the maximum settlement possible under their insurance policies.

Pros

• Advocacy and reduced stress: Public adjusters act as advocates for policyholders, taking on the burden of negotiations and reducing stress levels by dealing directly with the insurance company.
• Expertise: Public adjusters are trained professionals with a thorough understanding of policy language and the insurance claims process. They can use their knowledge and experience to guide policyholders through the complex process of filing a claim and ensure that all damages are accurately documented and properly valued.
• Thorough claim assessment: Public adjusters can help uncover hidden or less apparent damages, ensuring that no aspect of the claim is overlooked. For example, they can identify issues like mould formation or drywall damage resulting from concealed water damage.
• Larger settlements: Public adjusters often secure larger settlements for their clients. Policyholders may not feel confident in negotiating with insurance adjusters, and they might not even recognize overlooked claim possibilities. Public adjusters, with their expertise, know how to negotiate and request additional compensation where necessary.
• Less paperwork and hassle: Public adjusters handle all the paperwork and communications with the insurance company, making the process less cumbersome for policyholders.

Cons

• Specialising in major claims: Public adjusters often focus on substantial claims with significant payouts because their earnings are based on a percentage of the final settlement amount. It can be challenging to engage a public adjuster for smaller claims, as they might not find them financially worthwhile.
• Payment arrangements: Public adjusters typically work on a contingency basis, receiving a portion of the settlement amount. This fee varies by location and claim size, with an average of around 10%. Some adjusters may adjust their percentage based on the claim size, which can influence their preference for certain cases.
• Claim settlement time: While public adjusters can expedite some claims, involving more parties can potentially slow down the process due to increased negotiations. In some cases, if settlements cannot be reached, legal proceedings may be necessary, further extending the time it takes to resolve the claim.
• Conflict of interest: There may be a potential conflict of interest if the public adjuster is focused on securing a high fee. While they work for the policyholder, they may also have a vested interest in maximising the settlement, which could create tension if their goals do not align with the client's objectives.
• Limited scope of services: Public adjusters primarily handle insurance claims and negotiations. They do not provide legal representation or advice on other matters related to the loss. Policyholders may need to seek additional assistance from an attorney for issues outside the scope of the public adjuster's services.

How much a public adjuster costs

A public adjuster is an independent insurance professional that a policyholder may hire to help settle an insurance claim on their behalf. They are useful if you think your claim was poorly handled, if your damage is severe, or if you simply want an insurance professional to navigate the claims process for you.

Public adjusters typically charge a percentage of the total claim payout, which could be anywhere from 3% to 30% of your insurance settlement. This percentage depends on the size of your claim, with larger claims attracting smaller percentages. For instance, if your final claim payment is $250,000 and your adjuster charges 10%, then you’d pay approximately $25,000.

Other common fee structures include a flat rate or an hourly rate. Flat rates are usually charged for large and straightforward claims with obvious outcomes. An hourly rate will depend on the state, the public adjuster's experience and expertise, their operating costs, and the type of policy your claim falls under. Hourly rates can vary from $325 an hour to $750 or more.

It's important to note that public adjuster fees are regulated at the state level, and there may be predetermined rules and restrictions on when, how much, and the methods allowed for their fees. For example, fees in the state of Florida cannot exceed 20% of a reopened or supplemental claim limit. There is also a 10% fee limit for claims resulting from an official state of emergency.

When hiring a public adjuster, it is crucial to settle a fee rate and way of payment before entering into any agreements. Ask them to tell you upfront what their rate is and which method they use, and make sure this is added to your signed contract.

What a public adjuster does

A public adjuster is an independent insurance professional that a policyholder may hire to help settle an insurance claim on their behalf. They work for the policyholder, ensuring their claim is settled in a fair and efficient manner.

When you file a claim, your insurance company will assign a claims adjuster to evaluate your property damage and determine a fair payout amount. Instead of using the insurance company’s adjuster, some policyholders choose to hire a public adjuster. Like a claims adjuster, a public adjuster will assess the damage to your property, help determine the scope of repairs, and estimate the replacement value for those repairs. The difference is that a public adjuster works for you, not the insurance company.

• Evaluating damages and estimating the cost and time it will take to repair or replace property or structures.
• Helping you understand your insurance policy, tracking the claim, filing documents, and meeting deadlines.
• Acting as a liaison between you, the insurer, and any other third parties such as attorneys or witnesses.
• Negotiating with your insurance company to achieve a fair payout.
• Communicating with the insurance company on your behalf to negotiate a settlement.
• Using sophisticated software to perform an independent evaluation of a client's property loss.
• Gathering highly detailed claim information that can be challenging for a policyholder to compile.
• Logging and submitting initial and supplemental claims on a policyholder's behalf.
• Helping clients negotiate with contractors and insurers.

Frequently asked questions