Welcome to a new series of posts on North Carolina Property Insurance Law and Trends. In 2012 alone, North Carolina policyholders were impacted by Hurricane Irene, Superstorm Sandy, and an earthquake. North Carolina policyholders with property damage claims have rights, options, and obligations that deserve specific attention.
One of the most crucial things for policyholders to understand is that they can hire a public insurance adjuster to help with the preparation, presentation, and settlement of an insurance claim.
Insurance carriers will not encourage you to hire your own adjuster and may improperly imply that hiring a public adjuster is unnecessary or will make the claim take longer. If you are hearing this from an insurance company representative, you should consider the motivation for such a comment. Will the representative have to do more work when you present your own damage estimate through your public adjuster? Yes. Ask this representative whose interest they are protecting. The answer, 100 percent of the time, will be the insurance company.
North Carolina licenses public insurance adjusters, and Statute §58-33A-65 governs the contractual obligations between public adjusters and policyholders.
One of the statutory requirements mandates that public adjusters give a disclosure, separate from the contract, that explains the role of the public adjuster versus the role of the company adjusters and independent adjusters.
The roles and the impressions policyholders can be given by an insurance company’s adjusters deserve a disclosure. Insurance companies should be required to send this explanation in their first introductory letter to the insured, but I have never seen a letter that explains and insurance or independent adjuster’s role of and specifically states that the company and independent insurance adjusters are to deliver a claim response that is, overall, in the best interest of the insurance company. Don’t be fooled by the title independent adjuster—these adjusters just work for various insurance companies and their allegiance lies with the company that hired them. They are hoping to be hired again for future claims.
Here is the information a public adjuster will provide to policyholders in North Carolina:
(f) Before the signing of the contract, the public adjuster shall provide the insured with a separate disclosure document regarding the claim process that states: (1) Property insurance policies obligate the insured to present a claim to his or her insurance company for consideration. There are three types of adjusters that could be involved in that process. The definitions of the three types are as follows: a. “Company adjuster” means the insurance adjusters who are employees of an insurance company. They represent the interest of the insurance company and are paid by the insurance company. They will not charge you a fee. b. “Independent adjuster” means the insurance adjusters who are hired on a contract basis by an insurance company to represent the insurance company’s interest in the settlement of the claim. They are paid by your insurance company. They will not charge you a fee. c. “Public adjuster” means the insurance adjusters who do not work for any insurance company. They work for the insured to assist in the preparation, presentation, and settlement of the claim. The insured hires them by signing a contract agreeing to pay them a fee or commission based on a percentage of the settlement or other method of compensation.
Statute §58-33A-65 is correct, you do not have pay a fee to independent or company adjusters because they are paid by insurance companies. Public adjusters are paid by policyholders because they are working to represent policyholders’ interests. For more posts on the difference between adjusters, check out:
- What’s in a title? Why Policyholders Need to Know the Difference Between an Independent Adjuster and a Public Adjuster, Part I
- What’s in a title? Why Policyholders Need to Know the Difference Between an Independent Adjuster and a Public Adjuster, Part II
Next time, we will take a look at North Carolina specifics for claim presentation of insurance losses and learn from the decisions that have already been decided by our courts.