Public Insurance Adjusters: When To Hire One And Why

Public Insurance Adjusters: When To Hire One And Why

Find Cheap Homeowners Insurance Quotes in Your Area

Currently insured?

After your home is damaged by an incident like a fire or a windstorm, an insurance adjuster will be responsible for evaluating the damage. Your insurance company will send their own adjuster, but you can also hire a public insurance adjuster to evaluate the property loss on your behalf and help you file insurance claims.

You'll have to pay a fee to hire one of these licensed professionals, but a public adjuster can save you a lot of money by ensuring your insurance company pays the full amount it's responsible for, based on your coverage.

What is a public insurance adjuster?

Public insurance adjusters work on behalf of policyholders. Individuals and businesses hire these licensed professionals when they need help filing a claim or if they believe a claim amount offered by their insurance company was incorrect.

Public adjusters can file and negotiate claims for flood, fire, smoke, wind and hurricane damage, as well damage due to other perils, and even loss of business income if it's caused by property damage.

What A Public Adjuster Does For You

Public insurance adjusters are experts in the details and language of insurance policies, as well as filing and adjusting claims. They often have prior experience in construction or a related field, Here's what they do:

  • Use sophisticated software to perform an independent evaluation of a client's property loss.
  • Gather highly detailed claim information that can be challenging for a policyholder to compile.
  • Log and submit initial and supplemental claims on a policyholder's behalf.
  • Help clients negotiate with contractors and insurers.

Having an adjuster throughout the process saves the policyholder significant time and labor, and protects them from any pitfalls due to inexperience.

Sample insurance adjuster claim information

The process of evaluating, completing and submitting a claim for a policyholder is remarkably detailed. It can be difficult for a policyholder to complete these forms accurately, but a Public Claims Adjuster can prepare and submit this information for each policyholder's unique claim.

Item Description
Quantity
Unit Cost
Total Cost
Replace Partial Wall Insulation206.00 Square Feet$1.25$257.00
Replace Drywall Walls328.00 Square Feet$3.00$984.00
Replace Base & Trim52.00 Square Feet$7.50$390.00
Replace Wood Floor165.00 Square Feet$10.50$1,732.00
Replace Carpeting22.00 Square Feet$36.00$792.00
Replace Electric Outlet9$90.00$810.00
Prime Paint Ceiling & Walls601.00 Square Feet$0.55$330.55

Public adjusters versus company and independent adjusters

Regardless of who hires an insurance adjuster, their job is to evaluate property loss and determine the dollar amount a claim should pay out. But there are three main categories of insurance adjusters, and each one is employed by a different group. Here's a breakdown:

  • Company adjusters are employed by insurers, and they're sent to evaluate claims filed by the company’s policyholders.
  • Independent Adjusters do contracted work for insurance companies, and are usually hired on an as-needed basis when there's a surge in demand, or for their specific expertise.
  • Public adjusters and hired by individuals to assist in assessing damages, filing claims and negotiating with insurers to get the maximum payout for their claim.

Should I use a public adjuster?

Anyone who wants to file a property insurance claim should think about hiring a public adjuster, especially if the claim is for a large amount. As a policyholder, you have little to lose: Many public adjustment firms will visit properties free of charge, to help determine the severity of damage and whether an insurance claim should be filed.

Even if a policyholder is confident in the dollar value of their property loss, it's good practice to get a second opinion. Adjusters often find that a policyholder's loss estimate is far too low upon visiting the property. A policyholder might forget, or not be aware, of all the costs they can include in a claim, but public adjusters are professionals and they're unlikely to overlook any cost.

For example, if part of a roof is destroyed by wind, a homeowner is likely to miscalculate the cost of a new roof, and may even neglect major expenses like the cost of removing the damaged roof.

Submitting an accurate, detailed claim is crucial to getting the right amount of money from your insurer, and being able to cover the full property loss. Remember, even the best homeowners insurance companies never voluntarily pay more than the amount claimed. Policyholders need to be confident they are claiming the correct amount, and hiring a public adjuster is the best way to get it done.

How much does a public adjuster cost?

Many public adjusters will visit the site of a loss for free, in order to determine whether they will work with a policyholder on a case. However, they do charge a fee for their subsequent work, which includes filing insurance claims.

A percentage of the total claim

The public adjuster's fee is often a percentage of the amount the insurance carrier pays for the policyholder's claim. The fee percentage varies between adjusters and is usually capped by local or state law. As an example, fees in the state of Florida cannot exceed 20% of a reopened or supplemental claim limit. There also is a 10% fee limit for claims resulting from an official state of emergency, as declared by Florida’s governor.

For example, let's say a policyholder hires an adjuster who has a 10% fee. If the insurance company ultimately pays $100,000 for their claim, the policyholder will owe the public adjuster $10,000.

Policyholders may also be able to negotiate a lower percentage fee for large claims, such as property losses of $1 million or more.

Fee caps

Public adjusters also cap the dollar amount they will charge for fees on each claim. Generally, public adjusters with less experience might cap fees at $5,000 per claim, but experienced adjusters can range as high as $15,000.

In some cases, a high cap can still save a policyholder a lot of money. If the insurer pays out a $350,000 claim, for example, a 20% fee which would amount to $70,000, but with a $15,000 cap, the policyholder saves $55,000.

How to choose an insurance adjuster

There are a number things you should look into before hiring a public adjuster. But first, check their credentials. Public insurance adjusters must be licensed in every individual state where they practice, and like some other professionals, they're required to participate in continuing education courses to maintain their licensure.

Never hire an unlicensed contractor or attorney for claim adjustment services if they are not licensed. Practicing without a license is against the law and the license is an important benchmark of knowledge and qualification. Here are some additional considerations:

Will your adjuster be handling your claim personally?

Some public adjustment firms send one adjuster to do an estimate and another to follow up and thoroughly analyze a claim. As a policyholder, you might prefer to work personally with a single adjuster, but having a firm send more than one person can be a good thing. One particular adjuster might take over the claim simply because they have more experience with a certain type of damage, like fires or flooding.

Can you get a referral?

A referral from an acquaintance can be highly valuable. If you don't know anyone who can recommend an adjuster they've personally worked with, ask your potential adjuster for the contact information of some of their previous clients. Make sure others have had a good experience working with them.

You can also read reviews of public adjusters online. The National Association of Public Insurance Adjusters (NAPIA) has an Online Directory of Public Adjusters though membership does not preclude someone from being a licensed or qualified adjuster for your claim.

How much experience does your public adjuster have?

Depending on the severity and complication of a claim, a policyholder might want to seek out a more experienced public adjuster. Here are some questions to ask:

  • What types of claims have you worked on?
  • Do you have experience with my insurer?
  • How long have you been in practice?

Generally, more experienced adjusters charge a higher fee. Remember, the number of years an adjuster has practiced or the volume of claims they handle each year are not necessarily indicators of their experience level. A very experienced adjuster might only take on a dozen claims per year, but they might be choosing to work on large, complicated claims for high dollar amounts.

What are the adjuster's terms of communication?

A public adjuster generally handles the entirety of a claim for their clients, including communication with the insurer, but some policyholders might still want some level of involvement. Discuss this with your public adjuster before you hire them. You want to hire an adjuster with whom you are comfortable communicating throughout the process.

When you need an attorney instead

If you file a claim, and receive a proposed insurance settlement that seems unfair, you might be thinking about hiring an attorney who can help you dispute an insurance claim. But you probably don't need to work with a lawyer.

In fact, policyholders commonly hire public insurance adjusters to handle their disputes. A public adjuster can assist in reopening a claim with the insurer, and file a supplemental claim for additional payments.

However, if your adjuster negotiates with an insurance company and still believes you're owed a larger settlement, you may have to turn to litigation. If the cost of hiring an attorney is worth the desired settlement, then a lawsuit could be the next step.

It's also possible that an insurance company might refuse to negotiate with a public adjuster or refuse to pay the desired settlement. In that situation, hiring an attorney and litigation would be the only option. Fortunately for policyholders, this is fairly uncommon.

Editorial Note: The content of this article is based on the author’s opinions and recommendations alone. It has not been previewed, commissioned or otherwise endorsed by any of our network partners.