When Do I Need A Public Adjuster

Karl wanted to SCREAM. It had been two months since the fire and nothing had happened. He was crammed into a hotel room with his wife and three kids, five restoration contractors were hounding him daily to hire them for the job and the insurance adjuster wouldn't return his calls to tell him if the claim was even covered. If something didn't happen soon, he was going to explode.


When a fire or flood damages your property, most insurance companies are quickly on site offering assistance and helping to resolve the owners problems. Restoration contractors also have the knowledge and experience to guide a family through the process of repair and claim resolution. With the insurance adjuster working in tandem with a good contractor, most claims are settled in a manner and time that is acceptable to all. But, occasionally, this type of care and service is just not there. When that happens, an owner needs additional resources to protect their interests.


A public adjuster (PA) is an independent adjuster that is hired by the owner. Just as the insurance adjuster looks after the interests of the insurance company, the public adjuster looks after the interests of the insured. Many Insurance companies do not pay for the services of a PA, so they will usually charge you a percentage of the claim, much like a personal injury lawyer. Some states mandate that they charge an hourly rate for their services rather than a percentage. 


It is important to discuss their terms and conditions before hiring a public adjuster. Without exercising due diligence, you can find your claim settled, finalized with the insurance company and not have enough money to make your repairs after the PA is paid.


There are fundamental differences in the approaches of public adjusters versus insurance adjusters. Insurance companies like to take a minimalistic approach to repairs. They want contractors to only estimate what obviously needs to be done and nothing more. Because this initial estimate may seem low, many owners are concerned that they will end up on the short end of the stick and not have all the work done. 


To compensate for this, the insurance companies leave claims open for a period of one to two years from the date of the loss. Any additional work that is required or undisclosed damage that comes to light within this period, is usually always covered by the claim and repairs will be paid for.

Public adjusters, on the other hand, want to finalize the total claim up front. Their estimates usually reflect everything that could possibly be wrong, or could go wrong, in the course of the reconstruction. This would include several items that might need to be done, but actually never are done. Because insurance companies never want to pay for something that didn't happen, and many policies stipulate that they are only obligated to pay the actual costs of repairs; long, drawn-out legal battles can ensue before an amount is agreed upon. 


It is not uncommon for claims handled by public adjusters to end up in court or arbitration. Once the claim is settled and the PA paid, the owner must know that there will still be enough left to adequately make the repairs.


Most insurance companies are concerned about their long term relationship with a policy holder and do their best to settle a claim with fairness and integrity. In most insurance claims, a public adjuster is not needed.