Why Do Insurance Companies Don’t Always Want You to Hire a Public Adjuster?

why do insurance companies don’t always want you to hire a public adjuster

Dealing with an insurance claim can be a challenging and overwhelming process. Many policyholders choose to hire a public adjuster to help navigate the complex world of insurance. However, insurance companies don’t always want you to hire a public adjuster. Here, we will explore the reasons behind insurance companies’ reluctance to advocate for public adjusters.

What is a Public Adjuster?

Before we dive into why insurance companies are hesitant about public adjusters, let’s first understand who they are. A public adjuster is a licensed professional who works on behalf of policyholders to help them with their insurance claims.

Insurance Companies Don’t Want Your Cases To Go To Court

One of the primary reasons insurance companies prefer policyholders not to hire a public adjuster is to avoid legal battles. When a public adjuster represents a policyholder, they have the knowledge and experience to identify any discrepancies in the insurance company’s assessment. This often leads to higher settlement demands, which can result in litigation if not resolved through negotiations.

1. Conflicts of Interest

Insurance companies may argue that public adjusters have a conflict of interest because they are paid a percentage of the settlement amount. They claim that this incentivizes public adjusters to inflate the costs of damages and push for higher settlement amounts.

However, reputable public adjusters prioritize fair and accurate assessments, ensuring that policyholders get the compensation they deserve without compromising their integrity.

2. Reduced Profit Margins

Public adjusters have the knowledge and expertise to maximize policyholders’ claims, resulting in higher settlement amounts. This can lead to reduced profit margins for insurance companies, as they would have to pay out more in claims.

To protect their bottom line, insurance companies may discourage policyholders from hiring public adjusters.

3. Increased Settlement Amounts

Public adjusters are skilled negotiators who understand the intricacies of insurance policies and claim processes. They know how to submit thorough and accurate documentation to support policyholders’ claims, which often leads to increased settlement amounts. This can be a disadvantage for insurance companies, as higher payouts impact their financial resources.

4. Increased Claim Processing Time

Insurance claims can take time to process, especially when a public adjuster is involved. Public adjusters meticulously review and document damages, which can delay the claims process. Insurance companies prefer quick and efficient claim resolution to minimize their workload.

By discouraging policyholders from hiring public adjusters, they aim to expedite the process and reduce administrative burdens.

5. Negative Impact on Insurance Company’s Reputation

Public adjusters advocate for policyholders and ensure they receive fair treatment from insurance companies. In cases where insurance companies are unwilling to cooperate, public adjusters can alert the media or regulatory bodies about unfair practices, potentially tarnishing the insurance company’s reputation.

To avoid any negative publicity or regulatory scrutiny, insurance companies may discourage policyholders from hiring public adjusters.

How do Insurance Companies Benefit from Working with Public Adjusters?

Insurance adjusters often face criticism from policyholders for delays, low offers, and lack of transparency, leading to a tense relationship between insurers and the insured. However, many adjusters are now recognizing the value of having public adjusters, who advocate for policyholders, on the other side of claims. Public adjusters streamline the process by providing organized documentation, accurate estimates, and thorough communication, which helps insurance adjusters work more efficiently and minimizes delays.

Moreover, public adjusters bring a calm, professional tone to negotiations, diffusing emotions that can complicate claims. They understand insurance terminology and maintain timely, efficient communication without overwhelming adjusters with constant updates. This collaborative approach has shifted perceptions, showing insurance adjusters the benefit of working with knowledgeable professionals who help make the claims process smoother for all parties.

If you’re dealing with a situation where your insurance company discourages hiring a public adjuster, let Avner Gat, Inc. stand by your side. As seasoned public adjusters, we’re here to help you understand why having professional representation is essential for getting the full value of your claim. Don’t let the insurance company have the final word on your coverage—contact us at (818) 917-5256 for a free consultation and let us work to protect your rights and secure the settlement you deserve.

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