An automobile accident totals your car, or your home and precious family belongings are swept away in a flood. You're already feeling a lot of strong emotions and get exhausted just thinking about all the things you'll have to do to get everything repaired or replaced.
And then it's time to file a claim with your insurance company.
In this situation, no one's in the right mindset to understand all the clauses and legal terms they have to navigate.
The last thing you want is even more frustration.
What Are Your Choices?
Immediately following your loss, your insurance company’s adjuster will appraise the loss and document the damage. After a period of negotiation between you and your insurance company, they will present their settlement offer. If you feel that this offer is fair, and you feel confident that all your expenses will be covered, then you can choose to accept their offer and close out your claim.
Easy peasy, right?
But what happens if you're less than impressed with the settlement amount they presented you? If you disagree with the insurer about what your policy should have covered, or you're just not sure, you might consider hiring a public adjuster.
Many public adjusters are veteran claims adjusters who have worked for insurance companies. They know the ins and outs of the claims process, so having them in your corner is a great asset.
What Does a Public Adjuster Do?
People tend to settle for less than they might deserve because the process of filing a claim can be an exhausting experience (for advice, see How to File a Claim that Gets Paid Sooner).
A public adjuster will take the headache out of the process. They will document and substantiate every detail of your damaged property, arrange for the inspections, file the paperwork, and do all the negotiating on your behalf to settle with your insurance company and get the maximum amount due to you. They cannot get you more money than you are entitled to under your insurance policy, but they might get you more money than you would have secured if you had negotiated on your own.
A public adjuster will also be aware of all the related expenses that come with property damage. They may also know about some coverage that the policyholder doesn't realize they have, like cost of temporary relocation, additional living expenses, or loss of business income.
Some insurance companies may ask you to sign a release on your insurance claim settlement. This releases them from any further responsibility for your losses. A public adjuster would advise you of your rights and recommend the best possible settlement for you (if this is the kind of job you'd like to do, see Insurance Industry Careers to learn more about breaking into the business).
Things to Consider Before Hiring a Public Adjuster
The downside of hiring a public adjuster is the fee. Fees vary between adjusters and in some cases are capped by local state law, so contact your state's Department of Insurance to find out if there is one and what it is.
Hiring a public adjuster will cost you somewhere between 10 and 50% of your settlement amount. That's a pretty big chunk, so the question is whether it paying the fee will get you more money out of your settlement than you could squeeze out of it on your own.
Luckily, you don't have to guess; studies have been done on the subject. Consumer Reports, for instance, cites a study done by the Florida Legislature’s Office of Program Policy Analysis and Government Accountability that looked at more than 76,000 homeowners’ insurance hurricane claims. When policyholders used a public adjuster, their settlements were 19 to 747% larger than those who didn’t.
Here is what you should know before hiring a public adjuster:
- Are they a member of National Association of Public Insurance Adjusters (NAPIA)?
- Check their reputation with the Better Business Bureau
- Check industry references
- Make sure they are licensed in the state in which the loss has occurred
- How long they have been in business?
- Do they have a CPA on staff to handle business interruption claims?
- Ask if they have errors and omissions insurance (it protects you if the public adjuster makes an error that affects your claim)
Do I Need an Attorney or a Public Adjuster?
When there is a dispute over a claim, the burden of proof is on the insured. For the most part, a public adjuster can dispute a claim for the policyholder. They can reopen a claim and file a supplemental claim for additional payments.
If negotiations between your public adjuster and your insurance company have come to a standstill, you should consider hiring an attorney. Look for one who specializes in plaintiffs insurance coverage or bad faith litigation. In some cases, your attorney might use your public adjuster as an expert witness (for related reading, see Insurance and Lawsuits: What Happens When You Are Sued).
With all that they can do for you, public adjusters can act as your insurance superheroes, swooping in to save the day and get you everything you are owed just when you need the most help. But their services don't come cheap, so carefully weigh their rate compared to what you expect to get from your insurer.
If you think you're being shortchanged, getting a public adjuster on your side will help you find out if you were and help you do something about it.