Three Reasons to Hire a Public Adjuster
Not long ago, I was attending a deposition when the insurance company’s lawyer questioned my client about why he had hired a public adjuster.
The non-verbal reaction of my client spoke volumes. With wide eyes, he leaned closer to the attorney and explained that his world was turned upside down the day of the loss and he was not just completely overwhelmed by the destruction to his home, but, more than that, he was concerned for the wellbeing and care of his family. He knew he needed professional assistance because of the magnitude of the loss and his experience in dealing with his insurance company on a prior loss.
As more was learned about the circumstances of the loss, the sincere appreciation and respect the insured held for his public insurance adjuster was clear. At the time of the loss, he had more questions than answers and did not know where to turn until he hired his public adjuster.
Recently, I came across a blog written by KDhulkonen criticizing homeowners and cautioning against hiring public adjusters. The post, 3 reasons not to hire a Public Adjuster, lists three of the author’s opinions about public adjusters. However, insureds should not be discouraged from hiring a PA.
KDhulkonen’s Reason 1: Maximizing Settlement
KDhulkonen asserts “Homeowners adjusters pay whatever it costs (less deductible) to get your home and your personal property back to the way it was prior to the loss. This is really not an item in which a public adjuster can ‘maximize’.”
The author correctly quotes the principle of insurance, but the author provides no authority to support his assertion that seems to state that all claims are handled properly by insurance companies. This is an overreaching statement. If this information was correct, I doubt that public insurance adjusters would have a profession. However,there is data in Florida that shows the use of a public insurance adjuster does increase the final amount of the claim payments. I discussed this data and the OPAGGA report in my post “Public Adjusters and Sinkhole Claims.” The claim payment increase referenced in the OPAGGA report, however, is not limited to insureds who hire public adjusters for one particular kind of claim. Several insureds have explained that, but for the assistance of their public insurance adjuster, they would not have received the amount of their claim payment for their loss.
KDhulkonen’s Reason 2: The PA is paid a percentage of your recovery
Yes, a public adjuster is paid for his or her services. I don’t think homeowners are usually surprised or against paying for a professional to assist with the claim. Many public adjusters who assist claimants are paid on a contingency fee basis only, meaning, the insured is not paying an hourly rate for the services or having to pay any money for the services to begin. When an insured pays a public adjuster a small percentage of the claim payments collected by the PA or ultimately recovered, the PA can get started helping right away and should work diligently because he has a desire to see you get properly paid for your claim so that he receives payment for his services. If a public adjuster is wrong or doesn’t work hard to obtain a payment, he likely will not be paid. If this happened with great frequency, the work of public adjusters would be extinct.
KDhulkonen’s Reason 3: The Grief of the Claim
KDhulkonen argues that the grief caused to homeowners is not caused by the insurance company’s actions but by the traumatic loss itself.
No one doubts that damages to a home cause stress and grief to the homeowners. These difficulties are only compounded when a claim is not properly handled and the insured feels the insurance company is not standing behind the promises in the policy. Because a claim can be emotional for insureds, many policyholders hire help with their claims and the emotional burdens.
Other readers also pointed out why public adjusters are necessary-
Insurance expert said:
A public adjuster is licensed in the state they do business in by the State Dept. of Insurance. I have known several people that have suffered major fire, water and wind losses that received a huge recovery from their insurance policy verse what they might have gotten by not using a public adjuster. HIRE A PUBLIC ADJUSTER IN EVERY MAJOR INSURANCE CLAIM!
Another reader explained the need for representation by a PA:
Public Adjusters exist because of the inherent conflict of interest that exists when one person or entity attempts to represent two sides of a financial transaction...
If you have suffered a property loss to your home or business and are considering hiring a public insurance adjuster to assist with your insurance claim, you can rest assured that if you do a little research, you can likely find a public adjuster who will help you. As the PA will likely be paid a contingent percentage of your claim, the PA will work to increase the amount of the payment you are rightly owed from the insurance claim. Further, the PA will take over dealing with the insurance company and at least relieve part of your stress.
Chip:
When I first entered the claims profession as a trainee adjuster with GAB in the mid 70's I was trained to adjust a claim. That meant sitting down with an insured and explaining their coverage to them and actually looking for ways to cover a loss. As my career progressed and I got into claims management I trained my adjusters to do the same thing.
Back than I would have whole heartedly agreed with KDhulokonen's views. By and large I truly believed that on the great majority of the claims I was involved in the insurer did the right thing. They paid the insured fairly and quickly and I saw no reason why a public adjuster was needed. There were exceptions but that is exactly what they were - exceptions. However somehow after Hurricane Andrew the way insurers handled claims changed. Adjusters were sent out not looking to find coverage but rather looking for a way to deny coverage.
I became disillusioned with what I saw and eventually moved from representing insurers to becoming a public adjuster. I can honestly look at myself in the mirror and know that I am providing a much needed service to each and every one of my clients. If I did not think that my client would benefit from retaining me I would not represent that client and I think the majority of the professional PAs out there feel the same way. Sure there are some bad apples that reflect poorly on our profession but show me a profession that doesn't have bad apples.
To sum up I know one thing for certain. There are very few insureds out there who have the expertise to match the claims professionals working for the carriers. Without the assistance of a professional public adjuster the insured is simply outgunned and stands no chance of knowing whether their claim is being adjusted fairly or not.
Nicole:
I think your advise for a policyholder considering on hiring a public adjuster to do some research is right on point.
Knowledge is power and the more knowledge and information a policyholder has, the better prepared they are to deal with the many issues and difficult decisions they will have to make following a property loss.
For obvious reasons, the insurance industry always focuses on the public adjuster percentage fee coupled with the belief that this in and of itself will result in over reaching. From my experience, the service aspect of this profession is the most important reason an insured should retain a professional public adjuster. Having an experienced, skilled and trained advocate on your side at the very difficult time of a loss is of immense value. Someone to answer questions, help with the decision process, document the loss and detail the road ahead to recovery all on a personal basis based on years of experience cannot be attacked.
There simply is no good argument that can be made to dispute this.
Thanks Don for reading and posting.
Also, thank you for explaining how the industry has changed and your own personal experience. I think your point about matching expertise is very important. Many people hire tax professionals to help file their taxes or real estate agents to help sell their home. Real estate agents and accountants are hired because consumers know they need to have an expert help with the complexities of the processes.
On the surface, some types of insurance claims may seem straight forward or perhaps, the insureds do regard the insurance company as their hired pro. It is advocacy and comments like yours that help insureds understand that if they want to know if the claim is being properly handled, it is worth consulting with a professional policyholder avocate.
Hi Dick-
Thanks for reading and for your comment. The service provided by public adjusters is very important. There is no disputing that a loss to a home or business causes policyholders stress and worry. In my experience, the worry and concerns of the insureds start with questions-- what happens next and how do I get back to normal?
I think that an experienced public adjuster can be instrumental in ensuring that the policyholder can get back to a normal life and that is so important after a loss. Getting the property back to its pre-loss condition does take time as the adjustment process is done, but the insured can rest and handle their own personal affairs because they can trust the professional hired to help them is advocating and adjusting the claim with their insurance company. This is a very valuable service.
Interested in becoming a Public adjuster. I run a small home improvement/repair buss. I recently had a job that involved water damage due to a improperly installed roof. The insurance adj. was so off base that it got to a point that he would pay an additional 3 day or so without even coming back to review the situation. I would not deal w/ the home owner in person, I ended up dealing with the agent personelly. We really do need more independent Public adj.