Fire Damage: The Public Adjuster

2/10/2017 (Permalink)

House Fire

If you have ever filed an insurance claim, whether it be for your home, auto or health, you know it can be a very stressful process fraught with uncertainty and questions.  Will I be covered?  How much will I be covered for?  How will it impact my premiums?

Because of this confusion and uncertainty, many turn towards a Public Adjuster to get them through their ordeal.  But, before engaging a Public Adjuster, there are a few things you need to be aware of.

What happens first?

After you’ve taken care of your loved ones, you will need to get your home back in order.  When you have a damaging event to your home, for which you wish to submit a claim, one of the first things you should do is to contact your agent or your insurance company directly.

Your insurance company will record your loss and issue you a claim number.  They will also assign an internal or independent adjuster to review your claim.   This adjuster works on behalf of the insurance company.  This adjuster will schedule a visit to your home to inspect and assess the loss to determine coverage.  This is a benefit to you as a policyholder and does not cost you anything. 

Once coverage is determined, the insurance company’s adjuster will then discuss actions which need to be taken immediately, such as getting the home dried out or possibly boarded up if needed.  They’ll then provide you with their assessed value of the loss.

So now comes the question of whether or not to use a Public Adjuster.  Let’s go through this.

First, exactly what is a public adjuster?

A public adjuster is someone that you pay to help you with your insurance claim.  They are an insurance claims specialist who interprets the homeowner's policy, assesses the damage and how much it will cost to repair, and negotiates with the insurance company on behalf of the homeowner until the claim is settled.

The Public Adjuster does not represent your insurance company nor is he/she assigned by your insurance company.  Public Adjusters are sought and hired by you to be your representative and deal with your insurance company.   For their services they will charge you a fee, typically a percentage of the total award amount that they negotiate with your insurance company.

Remember, a Public Adjuster can assist with the claims process, but cannot get you more money than you are entitled to under your insurance policy and will not be able to get your claim settled any faster. You are simply paying them for a service.

OK, so when should I use a Public Adjuster?

Many will hire a Public Adjuster simply because they don’t have the time to deal with the claim.  Remember, though, you are paying a fee for this convenience. 

Typically, the Public Adjuster will charge a fee of 10%-15% of the final claim awarded.  This can be a sizable fee, so be sure before you sign any paperwork.  It’s also important to know that this fee can be negotiated depending on the size of the loss.

If you chose to deal with the claim personally, there are steps you can take before bringing a Public Adjuster in.  Your insurance company is a reputable business and they want you to continue to be a policyholder.

If you feel you can justify additional damages, speak with your insurance company’s assigned adjuster and present your case.  If you are not getting anywhere, ask to speak with a more senior representative.  You may find that these steps yield good results.

If you still feel that you need more representation, this is when you may consider working with a Public Adjuster.  It’s really a judgment call as to whether or not you believe your loss, and the associated damages you claim, are fairly reflected in your insurance company’s assessment.

Before you proceed, do some simple math. 

Let’s say you had a fire loss, for which your insurance company has assessed a $200,000 payment to cover the loss, but you feel you are entitled to $20,000 more and you have not been successful with your discussions with your adjuster.  So, you hire a Public Adjuster with a fee of 10%.  At the end of it, he argues and wins $10,000 more from your insurance company for a total payment of $210,000. The fee will be $21,000 to the Public Adjuster, netting you $189,000.  You would have been better off accepting the initial payment offered by the insurance company.

How can I find a good Public Adjuster?

As with anything else, a Public Adjuster can be found by doing some internet searches.  Another place to start would be going to the NAPIA website.  They have a vetting process and require their members to be licensed and to have been in business for at least 2 years.

Some steps you should think about:

• Always avoid any Public Adjuster who tries to pressure you into signing a contract. Remember this a business transaction.
• Interview several.
• Get reference lists and check with their prior clients.
• Check their company websites.
• You can also ask friends and colleagues who they might recommend.
• Avoid single practitioners or small firms unless they demonstrate a good track record.

Before signing anything, make sure your rights are protected:

• Determine how long you have to cancel any contract you sign. New Jersey protects consumers with a 72-hour cancellation provision under the Consumer Fraud Act.
• Verify that the Public Adjuster will remove any lien once the contract is terminated.
• Limit the contract to no more than six months.

Once you’ve identified your Public Adjuster, you will sign a contract between you and them, which obligates your relationship with them until the claim is settled.  The Public Adjuster will likely place a lien on your insurance claim, naming them as additional payee on all payments from your insurance company.

What role with the Public Adjuster play in the process?

So now you’ve hired a Public Adjuster.  Here’s what you can count on him doing and what you should not expect.

You will still be very involved in helping the Public Adjuster document the loss.  He will need details of the event and information about content damage and their value.

A public adjuster will assess your losses and help you get every penny you deserve, but don't expect miracles.  Understand the insurance company may not agree to everything you want just because you hired a public adjuster.

The Public Adjuster will be your representative and negotiate every aspect of the loss with your insurance company until a final agreement is made.  Once the negotiations are completed, your Public Adjuster’s job is done.  They do not perform or manage the restoration portion of this project.

The next and final step is to begin the restoration process by hiring the various contractors needed to perform the cleaning and repairing of your home.  This could start during negotiations between your Public Adjuster and your insurance company, depending on the urgency and what may have been agreed to. 

Remember, the Public Adjuster may provide you contractor referrals to do the work, however, you are under no obligation to use them, after all, this is your home and you have every right to decide who performs the work. 

Always consider using SERVPRO of Wayne for your cleaning and restoration needs, regardless of any contractors your Public Adjuster may insist on using. SERVPRO of Wayne is a full service restoration company, providing everything from board-up and drying, to cleaning and rebuilding.

Summary

I hope this has helped you in understanding the role and costs surrounding using a Public Adjuster.  There is always risk in any decision.  Minimize your risk by doing your research first by working with your insurance company.  It will be well worth it to go down this path first.

Always feel free to contact SERVPRO of Wayne at 973-546-4977 to discuss this before making your decision.  We’re always glad to help.

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