What is a public adjuster?
A burst pipe that floods your home or a fire that torches the garage may require thousands of dollars in repairs. Homeowner's insurance is supposed to ride to the rescue in such situations.
So, how can you be sure to get every cent of coverage to which you are entitled?
If you file a claim, your insurance company will assign its own insurance adjuster to the case at no charge to you. An adjuster surveys the damage related to a claim, interviews claimants and witnesses, looks at police reports and performs additional research to determine how much the insurance company should pay you after a loss.
But you also could hire a public insurance adjuster.
Hiring a public insurance adjuster provides you with one crucial advantage over relying on an insurer's adjuster, says David Barrack, executive director of the National Association of Public Insurance Adjusters NAPIA).
"Public insurance adjusters are trained professionals that work for the policyholder, not the insurance company," he says.
Some public adjusters are solo, self-employed workers while others work for public adjusting firms.
What do public adjusters do?
Many policyholders feel at a disadvantage when dealing with their insurer, says Amy Bach, executive director at the nonprofit consumer advocacy group United Policyholders.
"Insurance is a foreign language to the average person," Bach says. "Having a representative who speaks that foreign language puts the policyholder in a better position."
Some of the services that a public insurance adjuster provides include:
- Taking an inventory of damages and getting appraisals for fixing such damages.
- Making sure you meet all provisions for filing a claim according to the terms of your insurance policy.
- Talking to your insurance company on your behalf and working to get a satisfactory adjustment.
Adjusters make their living by charging you a percentage of the settlement, typically about 10 to 15 percent of the total, according to Barrack.
Should you hire a public adjuster?
Carole Walker, executive director of the Rocky Mountain Insurance Information Association, believes policyholders usually are better off skipping a public adjuster and instead working with the adjuster assigned to them by the insurance company.
Hiring a public adjuster usually means your insurance company will work exclusively with that adjuster, leaving you outside of the process, she says. By contrast, if you don't hire an adjuster, you'll be the point of contact for any questions and information coming to you from the insurance company and the adjuster the company assigns to you. Some people prefer to have this more direct role in the claims process, Walker says.
Walker also says that using the services of a public adjuster has a financial cost.
"You need to understand it will likely cut into your settlement," she says.
Bach agrees that if you have a straightforward loss, you may not need an adjuster.
As an example, she cites a husband and wife who just built a home and have all their receipts and records handy.
However, in other cases, it may make sense to hire a public adjuster. Your insurer will assign its own adjuster to your case, but the adjuster will be working on behalf of the company. Some policyholders may see that as a conflict of interest, and worry that they may not get the full amount due to them in a claim.
Public adjusters also provide expertise that gives you peace of mind if you have an especially large claim, or if your claim is especially complicated. For example, someone who owns a business, such as a restaurant, that burns to the ground has to consider not only the loss of the property, but also an interruption of business activity and concerns about meeting payroll.
In such cases, it would be wise to consider hiring an adjuster, Bach says.
"The larger and more complicated the loss, the more likely it would be that hiring a public adjuster was a good decision," she says.
Barrack says some people may be too traumatized by their loss to handle a claim properly.
"An insured might be injured, or have lost a family member as a result of the event," he says.
In other cases, policyholders may have to file a claim in a faraway locale, such as for a second home or a business office branch.
In such circumstances, a public adjuster can step in and take over the claims process.
Bach points out that the relationship between the public adjuster and the insurance company does not need to be adversarial. She says insurance companies want to settle the claim as quickly as the policyholder, and a public adjuster can help push the process along.
"If the interests of the insured, the insurance company and the public adjuster are all aligned, that's best for everybody," she says.
How to find a public adjuster
Bach says it's crucial to do your homework before choosing a public adjuster.
NAPIA offers accreditation to public adjusters. In virtually every state, members must be licensed, bonded and authorized to practice as adjusters.
In addition, NAPIA member adjusters can earn two other certifications:
- Certified Professional Public Insurance Adjuster CPPA). Adjusters must have at least five years of experience and pass an examination.
- Senior Professional Public Adjuster SPPA). Adjusters have a minimum of 10 years of experience and must pass an examination.
Bach says people who suffer a loss may jump at the first public adjuster in sight. But she recommends taking time to do thorough research.
"We always caution people not to hire a public adjuster in the first couple of days after a loss," she says. "Give yourself a chance to evaluate all your options and decide whether you need to hire a public adjuster."
Walker urges homeowners to use caution when hiring an adjuster, particularly in the wake of an event like a natural disaster that may spur public adjusters to go door-to-door looking for business.
"It draws in good adjusters and bad ones," she says. "Be careful you know who you're working with."
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