What is a Public Adjuster
A Public Adjuster is a private adjuster who works for the homeowner rather than the insurance carrier, meaning they are employed by the claimant, not the carrier. They are required to be licensed in many states, especially in Florida, Texas, and North Carolina, where natural disasters such as hurricanes and hailstorms are common.
The decision to hire a public adjuster is ultimately up to a homeowner, but there are many factors to consider, such as:
- The experience level of the public adjuster
- The costs associated with their service
- The potential benefit vs an Insurance consultant or General Contractor
- Legal entanglementÂ
- Inclusion of the Public Adjuster on the claim settlement payment
We will explore these factors in depth to help anyone experiencing a claim make a more informed decision about how to navigate the claim process.
What Do Public Adjusters Do
Public Adjusters will handle a homeowner’s claim after the homeowner signs a contract, often called a Letter of Representation. They will complete many of the same duties as the Insurance Adjuster who inspects your home. They will document any storm-related damages or damages they think are storm-related, review your policy, contact the adjuster, submit supplements on your behalf, negotiate to get additional items covered, and follow up on claim payments.
Do Public Adjusters Work with All Insurance Companies
Generally, Public Adjusters will work with any insurance carrier a prospective client may have, as doing so increases the potential business they can obtain. I have never heard of a Public Adjuster refusing to work with a homeowner who has a certain carrier, but I have also never worked as a Public Adjuster.
Should I Hire A Public Adjuster For My Insurance Claim
The decision to hire a public adjuster should never be taken lightly, as it often becomes a legally binding agreement that is difficult to undo once done. Public Adjusters may also claim that they can get you more money for your insurance claim, which may be true if a person doesn’t understand the claim process or lacks a competent contractor who has handled insurance claims before.
But a public adjuster will not be able to obtain anything over and above what the insurance policy will owe on a claim, and that same result can be achieved with a homeowner who advocates for themself or a contractor who can accurately document additional storm damage that may have been missed during the initial inspection of your home.
A public adjuster will also have multiple homeowners they work for, with no limit on the number of clients they accept, since each client can mean additional revenue, whereas an insurance adjuster who works for a carrier will be load-balanced, and more complex claims will be routed to more experienced adjusters.
Public Adjuster Vs Insurance Adjuster
Public adjusters vs. insurance adjusters, there are some major differences between the two. The 1st major difference is that one works for the insurance carrier or an independent adjusting firm, and the public adjuster works for themselves or a public adjusting company. They both will be regulated by your state’s Department of Insurance. An Insurance Adjuster will undergo training by the carrier they are employed by. This training will include customer service, claims systems, and estimating. If the insurance adjuster is an independent adjuster, they will complete carrier certification, which consists of specialized training provided by the carrier they handle claims for and by the independent adjusting firm they work for. Insurance adjusters will also have their claims reviewed for accuracy and quality control.
A public adjuster may not have any specific training related to claims handling unless they previously worked as an insurance adjuster. Their claims are also not subject to any kind of audits or quality checks to ensure accuracy. They will have to take a licensure test and complete continuing education credits to maintain their license, as required by the states in which they are licensed.
How Do Public Adjusters Get Paid
Public Adjusters will take a percentage of your final claim amount and, in many states, will be included as a payee on your insurance claim settlement check. If you have a mortgage on the home that was damaged, you may also have the mortgage holder on as a payee, which will create additional processing time on the redemption of your claim settlement check.
The industry standard is 10% of your total claim amount before your deductible, which creates additional out-of-pocket expenses on top of your deductible. For Example, let’s say you get $25,000 to replace your roof. If you have a $5,000 deductible and hire a public adjuster who charges 10%, you have to pay an additional $2,500 to the public adjuster, leaving only $17,500 for a $25,000 roof replacement.
Many public adjusters have preferred restoration contractors, roofers, and water mitigation companies, and may steer you toward their preferred vendors rather than the contractor you prefer. Having a public adjuster listed on your payment gives them additional leverage over the restoration process that some property owners may not be comfortable with.
Home Insurance Claim Process
An insurance claim can seem daunting to a property owner who has never gone through it before. But in reality, it is a process that involves a series of steps to report, document, and indemnify the homeowner for covered damages sustained during a loss.
This initial and most important step is to promptly report your loss to the carrier and take the steps needed to mitigate any further damage, e.g., placing a tarp on a damaged roof. Document all the damage yourself and schedule an inspection with the adjuster your insurance company sends out. Find a reputable local contractor that you want to complete the repairs and have them provide a detailed estimate that covers the restoration of the property to pre-loss condition. Your insurance will cover like-kind and quality materials. Depending on state laws, there may be an allowance for uniform appearance or matching. Code upgrades may or may not be covered depending on your policy. If multiple trades are involved, you may have more than one contractor, or a General Contractor coordinating different subcontractors to handle the different trades.
If there are any differences in the estimate your insurance company provided, be sure to notify them immediately to resolve any differences before making any repairs. Do not make any permanent repairs before the insurance company has an opportunity to inspect the damage. Have your contractor submit the needed documentation to resolve any differences.
Insurance Claim Supplements
Supplement claim payments are issued in a majority of claims and happen regardless of who is managing the claim, whether it be the homeowner, a PA, a contractor, or a 3rd-partylicy and any applicable endorsements added to the policy. Anytime additional covered damages are found, your insurance carrier will indemnify you once you notify them and provide the additional requested documentation.