Public adjusters are a necessary part of many commercial property owners’ insurance claims process. These licensed professionals can help ensure that the insurance company is paying out what it owes and not ignoring any pertinent details to delay, defer, or minimize payment on a property damage claim.
Hiring a public adjuster is more complicated than hiring other types of professionals because:
- They must have proper experience with the size, type, and location of your claim
- They must be licensed with your state’s Department of Insurance
- Most people don’t have a lot of experience hiring an adjuster, and so don’t know what to look for and what questions to ask
- Anxiety and pressure can be high (your property or business just got hit), which is usually never a good time to make important decisions
- The stakes are high. The difference between having an adjuster and not can mean the difference between getting a $200,000 low-ball offer that doesn’t begin to cover your costs, or getting a $1.4M settlement that takes into account not just repairing the property but lost income and other intangibles.
You need to know what you’re doing before hiring a public adjuster. Most business owners and / or property owners don’t have significant experience hiring adjusters, so this lengthy guide is designed to equip you with the knowledge and resources to make smart decisions.
We will discuss how to determine if you need a public adjuster, how to hire the right adjuster for your needs, as well as some things that you should expect when working with them or their firm on an insurance claim.
Public vs. company and independent adjusters
Insurance adjusters are hired by all kinds of companies, businesses, and individuals to investigate property loss and determine the number of payments needed to cover damages. Public adjusters are one of three main categories of insurance adjusters.
Staff adjusters or claims representatives are employed by insurance companies to resolve claims. These employees represent the interests of the insurance company (they are the insurance company’s adjuster), so they are friendly, but at the end of the day, they are working for the company.
They will want you as an insured or claimant to accept less money than your claim deserves in order to settle it quickly and painlessly without more effort from either party involved. Do not forget this reality while negotiating with a company claims adjuster — its the insurance company giving them a paycheck, and that’s naturally where their allegiance will be.
An independent adjuster is hired by insurance companies and does not represent policyholders’ interests. They can be located in a company’s headquarters or on-site, depending on what type of adjuster they are – field staff adjusters specialize in accident claims or workers compensation cases.
The independent adjuster serves as an intermediary between the covered party (or its insurer) who has filed a claim with them and another entity liable for damages resulting from an incident covered under the insurance policy, which may entitle one or both parties to receive payment(s).
Independent adjusters may work for adjusting companies that assign teams of adjusters to handle insurance claims in the event of a catastrophe, such as a hurricane, flood, or tornado. These adjusters are referred to as “catastrophe” adjusters.
Insurance adjuster licenses in a number of states are listed as “Property and Casualty,” “General Lines,” or “All Lines” licenses. Note: all of these titles refer to Independent Adjusters working on behalf of insurance companies.
Public Insurance Adjusters
Finally, public adjusters are hired by property owners (policy owners) who need expert advice in making sure an insurance company pays what’s due on a claim. They are the ONLY adjuster who represents the policyholder, and many times the only one in a position to advocate on their behalf in this complex process.
Reasons to hire a public adjuster
The Public Insurance Adjuster is an option to get a second opinion and attempt to negotiate with insurance companies for more. The adjusters have experience in the industry that will help you understand documents, as some are complex without explanation. They can also be used if your policy has many restrictions or requirements because they know how to determine cost savings on building supplies or property repairs.
The Public Adjuster can help in many ways:
- Negotiate with the insurance company on your behalf
- Resolve personal injury issues that may be related to the property damage caused by a storm, fire, or other disasters
- Work for you in an advisory capacity when filing insurance claims and hiring contractors
How much does a public adjuster cost?
Public adjusters can be a great help if you want to make sure that your claim is handled properly. Public adjusters work on contingency fees (or a flat success fee on occasion), meaning they only get paid when the insurance company pays out your settlement.
Most public adjusting firms charge 5% – 15%. However, these rates are negotiable and depend heavily on what type of loss or situation it is for you specifically.
In Texas, PA fees are capped at 10% of settlements received from insurance companies based on time spent working with them and the complexity of cases taken up by the PA to work out. Before hiring a public adjuster, ensure that their fee will not take away from money already agreed upon in writing by an insurer.
When should I hire a public adjuster to manage my insurance claim?
When you hire a public adjuster, you finally have someone that is strictly on your side (not the insurance company) and will manage a number of processes to reach a final resolution and payment. It’s a good choice for busy companies and property owners that are already dealing with the crisis of the damage happening in the first place, let alone the stress of managing an insurance claims process. They examine your claim thoroughly and ensure it is properly investigated and all the areas of damage are fully accounted for.
In addition, those who have failed to file a lawsuit will sometimes use a public claims adjuster to dispute claims that have been rejected.
Here are a couple of common scenarios where a Public Adjuster makes sense:
You don’t understand the insurance policy’s language or depth of coverage
Public Adjusters are for you, the policyholders, to help you recover your losses financially. Insurance claims typically cover a variety of complex clauses, processes, and terms.
Basic terminology such as Actual Cash Value, Proof of Loss, business interruption coverage, business rupturing period, and replacement costs have a very specific meaning in the context of an insurance claim.
Understanding these terms and how your claim hinges on their values is critical for maximizing the size of a claim.
Possibility of missing part of a complex claim
Public adjusters can help in the settlement of a claim to make sure nothing is missed. For example, a basic water damage claim could include:
- Depending on how much water is running down interior walls, there could be mold or drywall damage.
- The impaired safety of the walls could impact the claim amount.
- If you suffered damages on wood floors from the bathroom or the upper floor, the wood floors might require replacement.
- The water may have run inside the walls, where it may have caused mold.
All of the above will drastically change how your claim is paid by the insurance carrier and requires skill to articulate in a language they have to respond to.
Request for a Proof of Loss Form
The demand or request for proof of loss can be a huge red flag. It means you are now responsible for coming up with and documenting the value of your loss, which must be noted on the proof of loss form. Do not fill out this form without talking to a professional, and beware of any high-pressure tactics from the insurance company’s adjuster.
The Insurance Company is unresponsive
You can’t reach your insurance company which can happen for a number of reasons.
- We see delays in claim payment during large catastrophic (CAT Losses) events such as hurricanes, large-scale flooding, and fires that create losses community-wide. The insurance industry is overburdened, and as these claims take longer to resolve, we see more adjusters involved, meaning the process starts over every time a new adjuster is brought on.
- Time value of money. The longer the insurance company can hold onto your money, the longer they collect interest; that’s money in their pocket.
- Hoping you give up and just accept a low-ball offer.
A low settlement offer or outright claim denial
You don’t feel your carrier is offering you a fair settlement or undervaluing your claim. Unfortunately, this is common, where the insurance company may offer a lowball offer to see if you will take it. This behavior is then followed by:
- The insurance company stops responding to you, and begins dragging its feet.
- The insurer starts blaming the damage on pre-existing conditions or using a technicality within the policy to say that your loss is not covered.
What should I expect from hiring a public adjuster?
There are three main areas a public adjuster is going to work with you to speed up the insurance claim process and maximize the size of your settlement. Here’s what you can expect from hiring a public adjuster, they will:
Carefully review your insurance policy.
The insurance industry is a maze of rules and regulations. Carefully reviewing your insurance contract can make all the difference in an otherwise complicated process, but how do you know that it’s meeting every requirement? That answer should come from a public adjuster who has worked with thousands of people like you to help them get their claim approved.
Thoroughly document your loss.
Your public adjuster should prepare and estimate all that is lost, take photographs of the damage to prove it, inventory what was taken from you to assess how much money is needed to “make you whole.”
Work with the insurance company to find out how much is owed and settle as quickly as possible.
Having a team on your side to negotiate with insurance company’s adjuster, and defend the line items in a detailed estimate and / or proof of loss to maximize your settlement amount.
How do I find a public adjuster?
Each public adjusting firm in its state or jurisdiction is required to be licensed. When looking for the right public adjuster, consider the below:
State Licensing Board.
The licensing process for public adjusters varies from state to state. Some states, like Texas, require a license with the Department of Insurance to practice as an agent, while others do not have specific boards that oversee this profession. Therefore, be sure your licensed professional is willing and able to work within the confines of your jurisdiction before hiring them!
National or State Association Memberships.
The National Association of Public Insurance Adjusters is one of many public adjuster associations in the United States, with state and local branches. Membership counts for something when it comes to commitment; however, anyone who wants to be a public insurance adjuster can join an association if they wish.
References from Friends, Family, or Local Construction and Roofing Firms
Word of mouth through friends and family can be invaluable when finding a trustworthy firm. In addition, roofing companies, general contractors, and other construction professionals will have experience working with public adjusters in the area and may be able to recommend a group with the right experience.
How do I choose a public adjuster?
An adjuster needs to be licensed in the state where the property is located. Do not work in a way that does not have a licensed professional to manage the process or to provide claims advice. You can generally find if an adjuster is properly licensed by looking at your state’s insurance bureau website and searching for the business or individual adjuster’s name.
Like anything, asking the right questions is key to determining the right adjuster for your situation. For example, ask about their experience level, what kind of claims they handle, how many cases per year they handle, and how often they have worked on insurance claims in your area. As a general rule, the more specific they can be in discussing their experience, the better; be wary of vague claims and statistics.
More experienced public adjuster fees are higher but typically “you get what you pay for”. When looking at online reviews, complaints they handled each year do not always reflect the quality of the firm, so take them with a grain of salt.
Residential vs. Commercial Insurance Claims Adjusters. Many only work on major claims.
One thing to ask a public adjuster is the kind of claims they specialize in: large-loss (typically commercial) or consumer (typically residential properties). Many adjusters just want specialized work with large cases, such as a total loss fire in a house. So if a large-loss adjuster – who usually focuses on claims of $500,000 or more – takes on your claim for $30,000, how much attention do you think you’ll receive?
Conversely, suppose you do have a large loss ($500,000 or more in damage) and / or a complex claim that requires sophisticated knowledge. In that case, you’ll want someone with the experience, breadth of professionals, and experts to bring to the table to manage your claim – not something a firm focused on smaller, residential claims will have the resources to do.
In the case of a large loss, and / or complex property damage, a public adjuster can help coordinate a number of professionals, including contractors, engineers, legal, and meteorologists, to bring the relevant expertise to defend the value of your property insurance claim. An adjuster’s breadth of relationships is an important point to ask questions about before deciding on who to hire.
Finally: On-Site Inspections and Signing an Agreement Letter
For larger, complex claims, you may want the adjuster to evaluate the damage before signing an agreement letter. If you don’t opt for an on-site inspection, make sure to have the adjuster provide you with a scope of work that includes an on-site inspection, which is typically free. You should receive an initial estimate based on that inspection, which may be generated from Xactimate or another claims software, and details the line items and projected costs associated with them.
The Insurance Adjusters Agreement Letter
The agreement letter is typically straightforward; here’s an example from the Texas Department of Insurance. It should be clear and cite the location of the damaged property and the scope of work associated with the property damage claim.
Ensure that it covers everything clearly, so there’s no confusion on either side about compensation and payment options. Beware overly complex language or terms that seem overly complicated; this can be a sign of bad faith on the insurance adjusters’ part. The goal should always be clear communication between parties involved to avoid any problems.
If you’re a business owner in need of commercial property damage insurance coverage, it is important to be diligent when choosing the public adjuster that will work with your company. This decision can affect how quickly your claim is processed and the final outcome of your case.
When you choose Citizens Public Adjusters, we provide free on-site inspections for all types of properties so that our experts can identify any damages before they are repaired or replaced.