Insurance companies have never embraced people or professionals helping their own customers obtain what they are owed or laws that may expose insurance claim abuses by insurers. The obligation to treat the insurance customer with utmost good faith is one that is taught, but not one the insurance claim industry wants to be held accountable to follow. They especially do not want their own customers to have free-market accountability through private lawsuits enforcing this agreed to obligation. Instead, it appears to many that insurance executives want customers that are “sheep” and take what the insurance claims department determines is owed without question.

This is understandable from their viewpoint. An example of a wrong claims philosophy is from one of the largest insurance companies which developed a Jewish Lawyers List in the 1990s which I discussed in Hindin v. State Farm – The Landmark Claims Practice Case That Few Know About Finally Ends.

In the Hindin case, State Farm automatically sent claims to the fraud (SIU) claims department if the claimants were represented by Jewish, Hispanic, or Black attorneys or attorneys with a foreign-sounding name. Pretty shocking, but this was discovered only because of a private bad faith lawsuit brought by a Jewish lawyer, Todd Hindin. In California, where the lawsuit was brought, the Department of Insurance never knew this claims practice discrimination was going on.

So, the property insurance industry naturally tries to prevent policyholders from hiring those which may challenge their views and expose various unfair claims practices. Contractors, public adjusters, and policyholder attorneys are the natural scapegoats for the property insurance claims industry.

The Zelle law firm is a fine law firm with many good lawyers who have traditionally represented the insurance industry. Steve Badger is an opposing colleague who I have written about in this blog as recently a few weeks ago in Steve Badger and Chip Merlin Clash Again Over Appraisals, Umpires, and Appraisers! Come to the Show in San Antonio on October 1 and 2!

I am not certain if Steve Badger is going to be invited to debate me at future public adjuster events because his firm made the following statement in a teaching webinar of the Property Loss Research Bureau (PLRB):

What is a Public Adjuster?

A person that often makes the claims process difficult, whose sole purpose is to inflate claims because he or she works on a percentage.

“Often makes the claims process difficult” may be a fair statement from the insurance company view. Public adjusters usually challenge coverage interpretations which the insurer finds no coverage. Public adjusters often make claims for benefits that the insurance company adjuster never explained to the customer were available. They make claims for values that are often overlooked and reflect pricing higher than insurance company adjusters. I have personally seen the results over and over again. If “difficult” means paying more to the insurance company customer, the best public adjusters get an A+ for that.

“Their sole purpose is to inflate claims” is going to enrage the best public adjusters. Many public adjusters are going to be thinking that I should write something like the following:

The sole purpose of the insurance company claims department is to underpay their own customer and get away with it without regulatory penalty or lawsuit exposure.

But that would not be a true statement and one that I do not believe. The entire purpose of insurance, the transfer of financial risk in the event of a loss, would be undermined. I have also seen many examples of caring and good insurance company adjusters fully paying their customers and even doing it despite claims office red tape which would seem to prevent this from occurring. I am certain that some claims departments have a philosophy of looking for ways to pay claims and provide greater benefits because I have reviewed their training and spoken to those who have left those organizations.

I have said in many speeches to public adjusters and contractors that many in the insurance claims industry literally hate them because public adjusters and contractors make adjusters look bad. Both trades call out insurance company mistakes. Often, the positions and initial findings of insurance company adjusters are made to look silly.

We see claim philosophy memos and directives in bad faith lawsuits. As in this case, we see how insurance companies are taught to view all public adjusters and contractors. In most instances, licensed public adjusters are viewed as the enemy of the insurance claims department. This training webinar is just further proof.

Still, those watching out for policyholders suggest hiring public adjusters. Consumers Reports, in an article about problems that people face when making claims, noted the following:

If you reach an impasse, consider getting help from a public adjuster. You’ll pay a hefty fee, typically 10 percent of the policy payout. But a Florida study of more than 76,000 claims found that policyholders who used one got payments that were 19 to 747 percent larger than those who didn’t, though the cases took longer to settle.

Public adjusters can only respond to criticism, wrong or right, by raising the bar of professionalism, endeavor to uphold high ethical behavior and push for the competence of all of those in the business. It has been my pleasure to help contribute whatever little I may to the education of those dedicated to being the best they can when helping policyholders who need all the help they can get.

Thought For The Day

Being the best at whatever talent you have, that’s what stimulates life.
—Tom Landry

  • “What is a Public Adjuster? A person that often makes the claims process difficult, whose sole purpose is to inflate claims because he or she works on a percentage.”

    SOLE purpose? That’s rather like saying that, because insurance agents usually work on commission, their sole and only purpose is to sell insurance, needed or not, that boosts the premium and their income.

    No doubt there are agents like that. I’ve come across them. But that is the rare exception, not the rule. I suspect most insurer disdain for public adjusters comes from the ‘bad apples’ that get all of the publicity.

    Perception is often not reality.

    I’ll be addressing this when I speak at the NAPIA mid-year conference in Orlando in December.

    • Edward Fako


      It was a pleasure to listen to your Webinar yesterday on the topic of the premise of your book, “When World’s Collide: Resolving Insurance Coverage And Claims Disputes”, although either I had intermittent internet glitches or the Webinar Software was fading in and out.

      May I request a Link for the Rebroadcast of the discussion please? Or would it be more expeditious to request that directly from Mr. Chip Merlin?

      I definitely will be ordering a copy of that book now also. I look forward to getting an opportunity to either speak with you or meet you someday in the near future, as reasonable fair minded souls in this industry should be admired and emulated.


      Ed Fako
      (224) 735-5144

    • Chip Merlin


      Thanks for your comment.

      You make a great point.

      Many public adjusters are looking forward to your presentation.

      They and the insurance claims industry should buy your book, When Words Collide. It would teach better adjustment and claims handling.

  • Chip- This might be one of your best ones yet. If carrier adjusters did their job, we’d be in a different line of work. For example, in a claim that you & i worked on, the carrier side stopped at $600,000, when we got done fixing the wrong’s it ended up being $4,300,000. So I guess that’s why they don’t like us.

    • wmerlin

      Chris—we also had a bad faith case in that claim that settled confidentially against the deductible buy down carrier!

  • Edward Fako


    Zelle should be ashamed for perverting the perception of the Honorable Field of Public Adjusting, whose truer Sole Purpose would better be likened to a Figurative Shield, protecting disadvantaged Consumers from certain bullying claims handling tactics readily on display daily.

    That is an unfortunate mindset that the Zelle Law Firm is attributing towards the Public Adjuster Community, by asserting in a widely followed arena through the PLRB by stating that PA’s “Sole Purpose Is To Inflate Claims Because He Or She Works On A Percentage.”

    I tend to feel that Attorney Steve Badger and the Zelle Law Firm are only focusing on the rarer occasions found in the Claims Settlement Resolution Process, and that a few instances of Bad Actors Does Not Accurately represent the realities witnessed claim upon claim etc…

    Steve Badger seems to be a fairer man than his Law Firms Statement Paints A Picture Of, and I hope he is allowed to, and chooses to offer a dissenting view, or at least paint those allegations into a better fitting set of circumstances, rather than lump an entire Licensed Profession into a stigmatized disillusioned portrayal.

    Those allegations alone, would seemingly invite an engaging discourse between Attorney Steve Badger and Yourself, as they seem to be Materially Disingenuous on their face, when the factual realities observed actually reflect that a nill claim, before and after a Licensed PA was involved more accurately reflect the Unconscionable Low-Balling of the claims process by intent and design by typically obtaining claims benefits that minimally double the Insurers “Final Settlement Offer”, and frequently arrive at more adequately paid benefits being agreed to at 10X the previously offered benefit amounts, both by utilizing the services if a reputable Public Insurance Adjuster or the Insurance Appraisal Provision.

    Those are facts that no one can deny the results of.

    I look forward to hearing from you again in the near future Chip.


    Ed Fako
    (224) 735-5144

    • Chip Merlin


      It is always good to hear from you and your viewpoints.

      Steve Badger has reached out and I understand he is writing a response guest blog.

      I only printed this to back up what I have been saying in my speeches — independent contractors, public adjusters and policyholder attorneys are not liked by the insurance claims industry. I get to see this in internal claims training
      materials, bulletins and claims files. People in the industry tell me the same thing.

      Now, they say this and point to examples of really rotten conduct to back up their views.

      So, for those that are about being the “best” rather than being about being about “how much money they make,” we have an obligation to raise the bar of our respective trades. Otherwise, those who are in our industries to make as much money as possible and pay lip service to honesty and ethical behavior will have a really bad impact upon what we do for a living and ultimately harm

      Rene Sigman and I have discussed how the insurance laws passed in Texas harmed policyholders more than anybody. That was the consequence of the bad examples which lead to bad public policy being enacted into law.

      I am looking forward to Steve Badger’s guest blog.

      • Edward Fako

        Thank You Chip,

        I surely hope that Attorney Steve Badger notes that I offered an opportunity to set the proper stage for who those Presentation Slides were targeting.

        QUOTE HERE:
        “Steve Badger seems to be a fairer man than his Law Firms Statement Paints A Picture Of, and I hope he is allowed to, and chooses to offer a dissenting view, or at least paint those allegations into a better fitting set of circumstances, rather than lump an entire Licensed Profession into a stigmatized disillusioned portrayal.”

        Otherwise, I just would like to point out just one very recent example of investigating a loss properly, from my own perspective on a current Appraisal I am assigned on, where I am Exhaustively taking measures to ensure that additional Consequential Damages either can be proven or disproved to be related to the Appraised Cause Of Loss.

        Too often, parties outside of a claim are inappropriately led to believe that although Appraisers and Representatives such as myself may be hired by the Insured, the bottom line is that I still am seeking the truthful analysis of the assessed amount of loss due specifically from that Claim.

        In this instance, I spent yesterday afternoon using a garden hose on top of a decimated Cedar Shake Roof to either attempt to determine if the wall step flashings were improperly maintained and may have been the source of the water intrusion entering the wall cavities and contaminating the basement with fresh coincidental damages, or if the recent inspection by several other 3rd parties called in could have extenuated the severity of the already fragile materials. I will be onsite again, to further inspect with a Flir to view possible patterns behind hidden walls and other obstructions on my next trip.

  • A Public Insurance Adjuster’s sole purpose is to… #ProtectTheInsured against just such myths, and those who would falsely promote them for a financial gain.

    • Chip Merlin

      Spot on!