What Is A Public Adjuster, And Do You Need One?
- Jacob Moss
- May 31, 2022
- 5 min read
Updated: Jun 4, 2022
Yes, yes you do. But not necessarily for the reason you think.
Public adjusters are licensed insurance adjusters who can investigate insurance claims to determine coverage and scope. But rather than working for insurance companies, they’re hired by homeowners directly to represent them on their claims.
But what exactly do they do? How much do they charge? And is it even worth hiring a public adjuster when you can just file your own claim?
What is a public adjuster?
We actually have an entire article on the different types of insurance adjusters, including public adjusters. But at their core, public adjusters are insurance adjusters, just like field and desk adjusters, but with one key distinction: public adjusters do not work for insurance companies in any way, shape, or form.
Related article: What Are Insurance Adjusters?
Public adjusters are separate entities that homeowners can retain to guide and represent them and their interests throughout the entire claim process. They have no financial interest in denying or undervaluing your claim and have the same expertise as field or desk adjusters in terms of insurance prowess. (Many public adjusters start their careers as field or desk adjusters and choose to pursue a P.A. license so that they can directly help homeowners.)
Public adjusters typically handle the following tasks at minimum:
Filing your claim
Reopening a previously closed claim
Writing an estimate or valuation for the replacement and actual cash values of your damages
Determining cause of loss and insurance coverage
Preparing and filing proof of loss forms
Scheduling and attending any inspections requested by your carrier
Submitting all documentation mandated by your carrier
Negotiating with your insurance company on your behalf for a fair coverage decision
Reporting supplementary damages
Representing you in insurance appraisals (when appraisal is requested)
Providing litigation support (should litigation become necessary)
Loss consultancy (if relevant to your claim)
This all sounds overly complicated (and some of it is), but insurance companies put a lot of hurdles in between you and the settlement you deserve. Public adjusters know what these hurdles are and jump over them for you.
One perk to public adjusters is that before you hire them, they'll inspect your property, examine your policy, and review your claim for free, no contract or obligation required. Even if you have no plans of hiring one, you can still get a free opinion regarding your claim from a professional in the industry.
Insurance claims can proceed in many ways, and a good public adjuster will guide you through every potential hurdle to get you your settlement as quickly as possible. This doesn't mean that you'll hire a public adjuster and get paid the full amount of your claim in two weeks; however, the amount you'll be paid is usually much higher than what you would have received on your own, and that money tends to be issued faster on average compared to self-representation on your claim.
If the only method of proceeding further on your claim is suing your carrier (which is unfortunately necessary from time to time), public adjusters often have connections with attorneys specializing in insurance law. No one wants to sue, but a public adjuster can make finding a quality attorney easier, less stressful, and usually much more affordable (oftentimes free of charge).
Many public adjusters work long hours and weekends but tend to be happy with their careers. The job comes with a mix of desk and field work, making it a career that attracts people with the desire to handle every aspect of each claim.
Should I hire a public adjuster for my claim?
Public adjusters may be a vital part of the insurance industry, but they must be hired by the homeowner, technically making them optional. How much do they charge, who pays, and is it worth it?
Public adjusters are paid for by the homeowner directly. Hiring somebody to represent you isn't free, but most public adjusters in Florida operate on a contingency basis; they don't charge upfront and only accept a percentage of each check as the checks are paid and mailed by the carrier. This means that public adjusters are rarely paid until the carrier starts paying out, and that they don't get paid at all if they're unable to recover any money for you.
Florida public adjusters usually have a contingency fee of 20% of all monies they earn for you, and they drop their rates to 10% in the year following a state of emergency on relevant claims (e.g. hurricane claims immediately following the storm).
But when you can file your own claim, is it worth the price?
Yes, easily. Here's why.
Compare hiring a public insurance adjuster to hiring an accountant to do your taxes. Rather than doing a tedious and technical process yourself, your taxes are handled by a professional who does it every day. Accountants are more efficient, know every quirk that can benefit you, and can save you more money than what they cost to hire. Even if they don't save you money, they do a service so you don't have to do it yourself. For many people, accountants for taxes are an easy decision.
Public adjusters are similar in concept. Filing a claim on your home is almost a full-time job for you and can be incredibly stressful. Offloading that work onto someone who knows the ins and outs can reduce your stress levels considerably, and the amount they can get from your carrier is often much higher than what you would have received on your own.
On average, public adjusters can get their clients anywhere from 75% to 850% more than they would have received otherwise.
"...OPPAGA found that claims with public adjusters were paid 747% more on average than claims without."
Those percentages taken out of context can seem extreme; a public adjuster who earns you $47,500 after an initial payment of $5,000 has gotten you 850% more. (You should always seek context for any percentages provided to reduce the risk of misinterpretation.) However, the initial shock that comes from reading such high percentages is warranted; it's not uncommon for public adjusters to help homeowners go from a few thousand dollars to five- or six-figure settlements on legitimate claims.
These numbers are backed up by Florida’s Office of Program Policy Analysis & Government Accountability (OPPAGA), a large part of the Florida legislature’s investigative body. Its study on the insurance industry showed that claims with public adjusters were paid 747% more on average than claims without representation. (You can get context for that percentage by reading OPPAGA's study here.) OPPAGA found extremely low instances of complaints levied against public adjusters, and even lower instances of fraud perpetrated by public adjusters.
OPPAGA also discovered that insurance companies attempt to discourage homeowners from hiring public adjusters, sometimes via illegal means like suggesting that public adjusters fraudulently inflate estimates or pursue claims with no coverage. As a for-profit industry, insurance carriers have a financial motive to keep public adjusters out of claims, so clearly there’s tangible benefit for policyholders to retain one. And since public adjusting is an ethically-sound industry, the increased settlement you may receive from retaining a public adjuster isn't just extra money pulled from nowhere: it's legally justified by the terms of your insurance policy, and is owed to you by your carrier.
Public adjusters also come with close connections with contractors and attorneys, all of which are helpful tools on your claim. Look at your damages to determine if a public adjuster is worth it, but there's little reason not to call one to schedule a free inspection and go from there.
Where do we go from here?
If you ever experience damages to your property, you're likely stressed out of your mind. Fortunately, property damage is what your insurance is for. You're paying your premiums for a reason, so don't let the claim process scare you. Consulting a public adjuster (even without hiring one outright) before or during your claim may help calm you down, and you might find that a public adjuster is a good fit for you.
Hopefully this article has been helpful in defining how public adjusters can help you. If you feel that you would benefit from a free inspection and consultation, consider reaching out to your local public adjuster.
In the meantime, why not learn about the other two types of insurance adjusters? The other two may not work for policyholders, but understanding all aspects of the insurance process will help you work through your damages and get a fair settlement from your carrier.
Related article: What Are Insurance Adjusters?
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