What is the Fee for a Public Adjuster?

When the time comes to file a claim with your insurance company, your world may be in chaos. More than likely, you have suffered a loss to your home, business or other property. Your insurance company will send a staff or independent adjuster to look at the loss after you file your claim. You may believe that the estimate of the loss is less than what you deserve. That may be the time to hire a public adjuster to assist you.

What is the fee for a Public Adjuster? Public adjuster fees fall into three categories. What an adjuster may charge is set by each state's law, and within those limits it varies by case. The three methods adjusters use to charge fees are:

• Hourly based fees
• Flat fees per claim
• Contingency fees

How much public adjusters actually charge or actually can charge is a complicated issue and deserves a more detailed look at each type of fee structure. You should have a clear understanding of what costs may be involved and what services the public adjuster will perform for those fees. In order to get the exact rate a public adjuster will charge based on your specific insurance claim, schedule a consultation with a public adjuster licensed in your state. Melo Property Claims works in the states we serve. Before you do, however, there are several things that you should consider and questions you should ask before you sign any contract.

A Few Notes on Public Adjusters

Each state in the US has different laws, rules, and licensing requirements for public adjusters. Some states don’t even recognize or license public adjusters at all and require you to use an attorney if you want representation in a claims dispute with the insurance company. You must first determine your state’s situation with regard to public adjusters.

The most reliable source is your state's department of insurance, which licenses public adjusters, can confirm whether an adjuster's license is active, and can tell you what your state does and does not allow and your rights when filing an insurance claim. The Insurance Information Institute has a list of every state's Department of Insurance.

Rate and Fee Structures

Many states also regulate the fee structures that public adjusters can charge. These vary widely across the United States. Before you begin your search for a public adjuster, it would be in your best interest to know how your state laws and regulations approach regulating public adjuster fees.

Some states cap the percentage a public adjuster may charge. Some set a lower cap for claims made after a declared disaster or emergency, and some limit what can be charged on money the insurer had already offered or paid before the adjuster was hired. Other states set no cap at all. These rules are amended from time to time, so check the current rule with your state's insurance department rather than relying on a figure you read elsewhere.

Where the law allows, these fees are often negotiable or work on a sliding scale tied to the size and difficulty of the claim. Make sure that you are clear with any terms and fees that may be part of your contract, including whether the percentage applies to the whole settlement or only to what is recovered after you hire the adjuster.

Will I Get More Money if I Hire a Public Adjuster?

That is a hard question to answer. There are many variables that can affect the amount that an insurance company will agree to pay out on an individual claim. Large claims can often become very complicated and may involve long negotiations. A few of the things that can affect what you will be offered as a settlement by your insurance company can include:

• The way your loss is valued – Much of the way your loss is valued is determined by your insurance policy. Policies pay either replacement cost or actual cash value, which is replacement cost minus depreciation.
• Depreciation – Depending on the type of insurance coverage you elected to purchase, the depreciation on your home and belongings may reduce the value the adjuster places on your property. If you have replacement cost coverage, you can usually recover the depreciation once repairs or replacements are done; see recoverable depreciation.
• Local Variables – Many variables that are considered in assigning value to a loss are controlled by the region or area that you live. Calculating replacement value on a home is influenced by building costs, which can vary greatly from one place to another. How these costs are calculated can be a big difference in your claim settlement.

Red Flags to Watch For

Be very wary of any public adjuster who guarantees that he or she can get you more money from the insurance company. This is a promise that an ethical and professional public adjuster won’t make. There is no way that a public adjuster can guarantee a better settlement before a claim is filed and an offer made by the insurance company.

Things to Consider

There are some things that you should consider when hiring a public adjuster rather than depending solely on the reports filed by an independent adjuster or a company staff adjuster.

• An independent adjuster or company staff adjuster works for the insurance company. Their loyalty and responsibility are with the insurance company. They have no vested interest in getting you more money.
• A public adjuster that you hire and you pay works for you. The public adjuster's loyalty and responsibility are to you. They have a vested interest in how much you get paid on your claim because, more than likely, what they get paid is directly tied to how much you recover.

In states where public claims adjusters are not licensed, there are alternatives available to you. You can hire an attorney to dispute the settlement offer from the insurance company. If the dispute is about the amount of the loss, many property policies include an appraisal clause, under which each side names an appraiser and an umpire resolves what they can't agree on; see when you might need a property damage appraiser. You must understand what is in your policy and the state laws where you live.

Ask a Few Questions Before Signing a Contract

Before you enter into any contract with a public adjuster, you should have a clear understanding of what the adjuster will do, how much he will be paid, and what part you have in the claims process once the contract is in place. Ask a lot of questions. Some things you should discuss are:

• Licensing – Is the public adjuster licensed in the state where the property is? This is critical. After major disasters like hurricanes or tornadoes, unlicensed adjusters and contractors sometimes go door to door. Check the license with your state's insurance department, and look for someone who knows local building costs.
• Who will handle the claim – The adjuster that you talk to on your first visit may not be the person who handles your claim. Some large agencies will shuttle your claim off to another adjuster in the office. Be sure you know who is responsible for your claim.
• Talk about experience and background – This is especially important for claims that involve the total loss or severe damage to your home. Experience in adjusting losses and in the construction trades brings valuable knowledge to the claims process.
• Get some references – Get references from people who have used the adjuster and then follow up on them. Ask them how well the adjuster handled the claim if they were satisfied with the settlement, and what problems they encountered.
• Talk about the fees – Before you sign anything, you should have a clear understanding of exactly how fees to the public adjuster will be calculated and paid. You should know how and when the fees will be paid.
• How involved will you be in the claims process – Can you still communicate with the insurance company? Can you attend any meetings between the adjuster and the insurance company? Will you be privy to all communications between the adjuster and the insurance company? Do your best to be as involved as possible.

Before you sign the contract, you should be comfortable with the adjuster you have chosen. There should be a good rapport, and you should have the feeling that the adjuster is involved in your claim. You want an advocate who will work for you.

The downside of hiring a public adjuster

There are arguments against using a public insurance adjuster. Before you decide to hire a public insurance adjuster to handle your claim, you should consider these issues.

• The insurance company and the insurance company adjuster will be performing much of the same work that your public adjuster will be doing. The insurance company adjuster will be free.
• Insurance companies may see your decision to hire a public adjuster as an adversarial position. This can make working with them more difficult and slow the process of getting your claim settled.
• If the settlement offer you get is not substantially larger than what you would have gotten from the insurance company without the public adjuster, you ultimately receive less in the settlement because you have to pay the public adjusters fees.
• Policy limits may dictate the total settlement involved. Your public adjuster cannot negotiate a settlement larger than your insurance policy dictates. In this case, the cost of the public adjuster reduces what may be an already underinsured loss settlement.

What Not to Say to an Independent or Company Claims Adjuster

The insurance industry is very competitive and developing a reputation of not dealing fairly with their clients is bad business. An argument can be made that it is in the best interest of the insurance company to settle claims fairly and quickly. In the event you decide not to hire a public adjuster and to work with the insurance company and the adjuster they send, there are some things you should do and not do.

• Be cautious – Be careful what you say and how much information you provide to the insurance company adjuster. You need to be honest and forthright, answer their questions fully, and cooperate. However, don’t try to be helpful and give more than what the adjuster asks for in the visit.
• Read Everything – Don’t simply accept what anyone tells you is in any document that you are asked to sign. Read everything carefully. If there are parts you don’t understand, ask for more information. If you still don’t understand what is being said, you may need to consult an attorney.
• Don’t get aggressive – The insurance adjuster sent by your insurance company is just doing his or her job. They rarely have any input into the actual decision by the insurance company on how much your settlement offer may be. Be cordial and professional.
• Be patient – Insurance claims take some time to process. Don’t expect overnight service. This may be hard to accept when you are living in a hotel or have been displaced due to a major disaster. Let the process work.
• Understand the Goals of the Insurance company – Your insurance company probably has two goals when they start to process your claim. Understanding your insurance company's position can give you a better grasp of what is happening. Insurance companies want to:
  • Settle your claim efficiently.
  • Pay no more than they believe the policy owes.

If your decision is to work with the insurance company and their claims adjuster, you need to remember that the company adjuster is not on your side. It is your responsibility to look out for your interests.

Some Quick Legal Stuff

Nothing in this article should be taken as legal advice. This article is presented for educational and informational purposes only. You should consult an attorney licensed to practice law in your jurisdiction whenever there is a question about contractual obligations or breach of contract.

No Matter the Decision

The insurance company has their goals, and you should have yours as well. Typically, your goals in the claims process are the same whether you hire a public adjuster or work with the insurance company and their staff adjuster.

• Settle the Claim as quickly as possible.
• Get as much and everything that you are entitled to in your insurance policy.
• Put your life back together as close to what it was before your disaster.

In the end, it is your peace of mind and your financial well being that is at stake when you have suffered a calamitous loss. Your aim should be to begin rebuilding your life with as few problems and as little stress as possible. Whether that involves hiring a public adjuster or handling your claim yourself is a decision only you can make.