Introduction
Often, after a fire, flood, hurricane, or other disaster that causes damage to a property, policyholders make an insurance claim. But getting through the process of filing a claim can be complex, frustrating, and time-consuming. Policyholders often get lost in the details of policy terms, necessary documentation, and negotiation of a fair settlement with their insurance company.
This is where public adjusters come in. Unlike insurance company adjusters, who represent the insurer’s interests, public adjusters work exclusively for the policyholder to ensure they receive a fair settlement. But are they worth hiring? Let’s explore their role, responsibilities, advantages, and potential drawbacks to help you decide whether hiring a public adjuster is the right choice for your situation.
What is a Public Adjuster?
A public adjuster is an insurance professional who is licensed to help policyholders prepare, file, and negotiate their insurance claims. Their intent is to obtain the highest possible settlement for policyholders’ covered losses. Unlike insurance company adjusters, who may be driven by the need to contain claim payments, public adjusters have only their policyholder clients’ interests at heart.
How Do Public Adjusters Differ from Other Types of Adjusters? There are three primary categories of adjusters: These are:
- Company Adjusters: Since the adjusters are considered to be working for the insurance companies, they usually just present claims on behalf of their employer and have a tendency to keep the settlement of claims at minimum value possible.
- Independent Adjusters They are hired by the insurance firms but are independent of them, and they have to assess their claims from an insurer’s standpoint. 3. Public Adjusters Appointed by a policyholder, public adjusters represent the customer in maximizing recovery under the provisions of the given insurance policy.
Public adjusters work on behalf of the policyholder and not the insurance company, guaranteeing a claim process that is fair and just.
Key Roles of a Public Adjuster
Public adjusters assume numerous roles during the claims process, including:
1. Damage Appraisal
One of the first steps a public adjuster takes is conducting a thorough assessment of the property damage. They inspect the site, document visible and hidden damages, and estimate the total repair costs.
2. Reviewing the Insurance Policy
Most policyholders do not understand the language and jargon used in their insurance policies. A public adjuster analyzes the policy to find out the coverage, what is excluded, and how best to file a claim.
3. Documentation Collection and Submission
A public adjuster collects essential documents to back the claim, which include:
- Photos of the damage
- Detailed estimates of repairs
- Emergency repairs receipts
- Inventory list of damaged personal effects
- Reports from contractors, engineers, or other specialists
Accurate documentation can avoid denial and delay of the claim.
4. Filing and Managing the Claim
The adjuster fills out and submits the insurance claim on behalf of the policyholder. They ensure all forms and documentation are correctly completed, thus reducing the chances of errors or claim rejections.
5. Negotiating with the Insurance Company
Most insurance firms make low payouts as compared to the claims by policyholders. The public adjuster negotiates with the insurer using his information and documents and then presents these for a higher claim payout.
6. Facilitating an Appeal
If an insurance company denies a claim or offers an unreasonably low settlement, a public adjuster can help file an appeal, present additional evidence, and work toward a better outcome.
The Benefits of Hiring a Public Adjuster
Hiring a public adjuster can offer several advantages, particularly for large or complex claims. Here are the key benefits:
1. Higher Claim Settlements
Studies suggest that policyholders who use public adjusters receive significantly higher settlements than those who handle claims independently. Public adjusters understand how to maximize claim value by identifying overlooked damages and negotiating effectively.
2. Expertise in Insurance Policies
An insurance policy can be complex, riddled with technical terms and exclusions that most policyholders might not understand fully. Public adjusters have an in-depth understanding of policy terms and can help ensure that the claimant benefits fully from all that is included in the contract.
3. Saves Time and Effort
The process of filing an insurance claim is lengthy, as it involves frequent communication with the insurance company, gathering a lot of paperwork, and responding to requests from the insurer. Public adjusters handle the entire process, saving policyholders time and reducing stress.
4. Prevents Claim Denials and Delays
Errors in paperwork or missing documentation may result in claims delays or outright denials. A public adjuster ensures that all documentation is done and submitted without unnecessary obstacles.
5. Assists in Complex or Large Claims
For claims that involve significant damage, multiple aspects of coverage, or disputes with the insurer, a professional advocate can make all the difference in the claim outcome.
Potential Downsides of Hiring a Public Adjuster
While public adjusters offer significant benefits, there are some factors to consider before hiring one:
1. Fees and Commissions
Public adjusters typically charge a percentage of the claim payout, usually ranging between 5% and 20%. For very large settlements, this fee may be substantial. Policyholders should weigh the potential financial benefit against the adjuster’s fee.
2. Not Always Effective for Small Claims
For minor property damage claims, public adjusting services may not be justified cost-wise. If the claim is simple and it can be anticipated that the amount to be recovered will be low, then direct adjustment is the most practical course of action.
3. How to Find a Reliable Adjuster
Not all public adjusters work with the same skill and integrity. To avoid hiring fraudsters or novices, one must verify licenses, read reviews, and ask for references before hiring an adjuster.
4. Possible Conflicts with Insurance Companies
Some of the insurance companies may not like the idea of dealing with public adjusters. This may result in a protracted negotiation or even a dispute. However, this is not always the case, and you should factor this into your decision when hiring an adjuster.
When Do You Need a Public Adjuster?
Here are some instances when you need a public adjuster:
- Significant Property Damage Claims – For significant damages caused by fire, storms, floods, or hurricanes, an expert can help secure a higher settlement.
- Claim Disputes or Denials – If an insurance company disputes coverage or offers an unfairly low settlement, a public adjuster can negotiate on your behalf.
- Lack of Time or Knowledge – If managing the claim process feels overwhelming or time-consuming, a public adjuster can take care of everything.
How to Choose the Right Public Adjuster?
If you’ve decided that hiring a public adjuster is the right move for your insurance claim, the next step is selecting the right one. Not all public adjusters are created equal, and choosing an experienced, reputable professional can make a significant difference in the outcome of your claim. Here are some key factors to consider when selecting a public adjuster:
1. Verify Licensing and Certification
Public adjusters are licensed in most states. Before you hire one, find out if he or she has a valid license in your state. You can check the status of their license on your state’s Department of Insurance website.
In addition, you may want to find out if the public adjuster is certified by reputable industry organizations, such as: – NAPIA (National Association of Public Insurance Adjusters) – AIC (Associate in Claims)
- CPCU (Chartered Property Casualty Underwriter)
These designations mean that the adjuster complies with and adheres to industry best practice and maintains good ethical standards.
2. Verify Experience and Specialization
Not all public adjusters have the same amount of experience or expertise. Some specialize in particular kinds of claims: residential, commercial, fire, or hurricane. Ask candidates how much experience they have had in handling claims similar to yours, and get references from their former clients.
3. Know How They Get Paid
Public adjusters usually work on a contingency fee basis, which means they take a percentage of your final claim settlement. Before hiring an adjuster, make sure you understand their fee structure. Standard fees range from 5% to 20%, depending on the complexity and size of the claim. Some states impose limits on public adjuster fees. For example:
- Florida caps fees at 10% for claims related to declared disasters and 20% for other claims.
- Louisiana caps fees at 10% of the claim settlement.
- New York caps fees at 12.5%.
Always get the fee agreement in writing before signing a contract.
4. Read Reviews and Ask for References
Among the best ways of measuring the credibility of an adjuster is checking their online reviews and requesting references from past clients. Seek feedback about the following in the customers’ reviews: Google Reviews, BBB, Trustpilot, NAPIA website.
Beware of those who have complaints related to communication problems, excessive charges, or the failure to meet expectations.
5. Avoid Red Flags and Scams
There are dishonest public adjusters. This is a common red flag:
- Unsolicited Offers: Don’t let overly aggressive representatives show up at your doorstep after a loss, hawking their services.
- Upfront Fees: Legitimate public adjusters will not require payments upfront; they receive a commission based on the result of your claim.
- No Written Agreement: Always insist on a written contract outlining fees, services, and terms.
- Overpromising Results: If an adjuster guarantees an unusually high payout, be skeptical. Legitimate adjusters can estimate potential compensation but cannot guarantee a specific amount.
Final Verdict: Are Public Adjusters Worth Hiring?
For many policyholders, hiring a public adjuster can be a smart financial decision—especially for large or disputed claims. Their expertise in policy interpretation, documentation, and negotiation often results in higher settlements and a smoother claims process.
But for small claims, the cost of employing a public adjuster might not be justified for the increase in settlement. It is always upon one to critically analyze his or her situation and claim complexity and reputation of the adjuster before making such a final decision.
