If you’ve found yourself exploring the pros and cons of using a public adjuster, it’s likely that you’re planning to file a homeowners insurance claim. Before we can fully evaluate the benefits and disadvantages of working with a public adjuster, we need to take a moment to differentiate the kinds of ‘adjusters’ that you might meet throughout the course of your claim.
Corporate Adjusters – These individuals work for your insurance provider. They may be the first adjuster that you meet in the claims process. As an employee of the insurance company, they are motivated to offer the smallest possible settlement.
Independent Adjusters – Unlike corporate adjusters, an independent adjuster doesn’t work for your insurance provider as an employee. They are typically hired as independent contractors to provide an outside opinion, cover for a shortage of corporate adjusters, or to provide a second opinion. As an independent contractor, they do not have the power to settle claims on behalf of the insurance carrier.
Public Adjusters – A public adjuster exclusively represents the policyholder. They have the same knowledge of insurance policies as other adjusters, but they use it to advocate for you. They work on contingency. As such, they are motivated to ensure you receive every dollar you’re owed under your policy.
Now that we’ve reviewed the differences between the different kinds of insurance adjusters, we’re ready to examine the process of working with a public adjuster!
THE PROS OF USING A PUBLIC ADJUSTER
They even the playing field by advocating for YOU.
Public adjusters are highly skilled, and they must fulfill strict licensing requirements. In California, these requirements include an apprenticeship period before an individual can be licensed to work on their own. They are also required to pass background checks, provide fingerprints, and they are insured & bonded. As a result of years of claim experience, public adjusters can help you read and interpret policies to determine your maximum entitlement.
They make the insurance claims process less stressful.
Public adjusters bring the outside perspective that an independent adjuster would provide, but they are motivated to protect you. When you’re dealing with an extremely emotional property loss, they can remain clear-headed and collected.
Public adjusters will manage your claim and minimize the time you spend dealing with adjustment issues, including meeting with the insurance company, their contractors, and various other vendors. They understand what the insurance company is looking for, so they quickly organize the documentation to support the amount of your loss. Your public adjuster will present that evidence to your insurance company and can help you resolve your claim with less hassle and stress.
They often obtain larger settlements than unrepresented homeowners.
According to a report by the Office of Program Policy Analysis & Government Accountability (OPPAGA) in Florida, policyholders that work with a public adjuster receive settlements that are 747% times higher than unrepresented homeowners with similar claims. While the study did not determine the exact cause of these increased settlement amounts, it is likely because the adjusters know precisely how to read your policy and what to expect from different kinds of property damage.
THE CONS OF USING A PUBLIC ADJUSTER
You may have an extended claims process.
When you work with a public adjuster, your overall claims process may take longer than an unrepresented homeowner. There are a number of reasons for this difference. Public adjusters can quickly identify signs of hidden damage to your property, which will extend the life of the claim because those damages must be investigated. For example, after a fire damage claim, the insurance company may offer a settlement that covers only visible damage. If you were working with a public adjuster, they might realize that the fire suppression efforts have caused water damage to the interior drywall. Receiving compensation for this ‘hidden’ damage will require further investigation, negotiations, and additional time.
You will pay a relatively small fee for their services.
Public adjusters provide their services on a contingency basis. This means that you won’t be responsible for paying them at the beginning of your claim. They don’t get paid unless you do. Instead, public adjusters make their living by working for a relatively small percentage of the total settlement amount. For many homeowners, this type of compensation is preferable because it doesn’t further strain their financial resources right after an accident.
They may not be available for small claims.
The truth is, not every claim requires the intervention of a public adjuster. It can be difficult to find representation for claims worth only a few thousand dollars. This is because public adjusters work on contingency. They make more money from significant property damage because the total settlement amount is higher.
However, this doesn’t mean that public adjusters are unsympathetic to small claims! At Avner Gat, we put our clients first. In some cases, this means declining to represent you if we feel that our fee will jeopardize your ability to pay for repairs. Regardless of the size of your claim, we would be happy to speak with you about your case and provide you with guidance, if possible.