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Public Adjuster Pros and Cons Every Homeowner Should Know

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Homeowner talking to Public Adjuster Regarding Insurance Claim

Nobody likes to pay for the insurance bill. But it is a necessity as a homeowner. The insurance provides the needed financial protection when something unexpected or catastrophic happens to your home.
When those unfortunate events happen for example, water damage from an overflowing toilet or storm damage to the roof, you need to call your insurance agent. 6% of homeowners made claims to their insurance company in 2017 for things like floods, lightning damage or home fires.
You have insurance to help cover the damages associated with those home disasters. But how do you as the property owner make a claim and come to an agreement on the amount you should be paid for the damage?
This is where claim adjusters come into the picture and help you handle your claim. You know the insurance company has adjusters. Have you heard of a public adjuster that you could hire for a claim to your insurance? What reasons would there be to hire a public adjuster?
Let’s take a closer look at the public adjuster pros and cons. Read on to learn all about making an insurance claim and using a public adjuster vs the insurance adjuster.

The Claim Process

Let’s use the water damage example to look at the claim’s process. A pipe bursts in your bathroom while you’re not home. The bathroom floods with water. Unfortunately, the bathroom is on the upper floor of your home.
Gravity takes over and water starts coming through the ceiling to your kitchen and landing on your new hardwood flooring. The burst pipe is causing significant property damage and you decide to file an insurance claim with your homeowner’s insurance to get repairs taken care of with insurance money.
To file a claim, you call your insurance company and report the incident. They send out their adjuster to survey the damages and come up with the cost estimates.
You are given money for repairs from the insurance company once the two of you agree on the amount proposed by the adjuster.
What happens if you cannot come to an agreement on the amount? This is often when homeowners choose to hire a public adjuster.

Difference Between a Public Adjuster and an Insurance Adjuster

So, what is the difference between an insurance company adjuster and a public adjuster?
The insurance adjuster works for the insurance company. He works on their behalf to get information about claims and come up with the proposed repairs and what it would cost for the repairs.
The public adjuster would be hired and paid by the homeowner.
Both do the same tasks of evaluating and assessing the damage. Both will write up proposals for repairs and their costs. The key difference is who employs them to do that task.
Let’s take a closer look at the pros and cons of both kinds of adjusters.

Insurance Adjuster

The insurance company employs adjuster to go to homes and survey damage. They are typically very knowledgeable about the trades of building or repairing a house. Often they are individuals who have a contractor’s license or who have worked in the field in the past.
They need to be highly knowledgeable about home construction as they evaluate damages and propose what it will cost to make the necessary repairs.

Positive of an Insurance Adjuster

There are a few positives to consider when thinking about using the insurance company’s adjuster.
The insurance company can afford to hire adjusters who have a vast range of experience in the field. The adjuster needs to be knowledgeable about everything from plumbing, heating and cooling, electrical to finish work like drywall and paint.
A big bonus of the insurance adjuster is that he or she comes at no additional cost to you as the homeowner.
Most people have stayed with the same insurance company for the life of their homeownership. There is no reason to suspect that this adjuster would not want to fix the problem and skimp to save the insurance company money.

Negatives of an Insurance Adjuster

The truth is though, they are employed by the insurance company. The work they do is on behalf of the insurance company, not the homeowner.
If you have had a big loss, like from a fire, the damages will be extensive. There might be some insurance companies who will want to save some money in the payout process. Ultimately, the insurance adjuster answers to the insurance company and needs to satisfy them.
Having said that, many insurance adjusters have professional reputations. Their goal is not to fix something on the cheap but instead to propose a plan that would get repairs done right.

Public Adjusters Work

Many homeowners don’t even know about public adjusters. They assume the work done by the insurance adjuster is done on their behalf.
A public adjuster is employed by the homeowner. They are also paid by the homeowner, typically a percentage of the claim amount. A homeowner might decide to hire a public adjuster if they have a potentially large claim and are worried about getting everything covered.
If you hire a public adjuster, the sooner in the claim process the better. It is best if they can take over to speak on your behalf and work with the insurance adjuster right from the onset of the claim.
You might be wondering how to find a reputable public adjuster. Not all of them have good reputations and can have the reputation of being “ambulance chasers” looking for a disaster to make some money from.
If you want to hire a public adjuster, start by looking at their credentials.

  • How are they skilled to assess damages?
  • What experience do they have in working alongside the insurance company towards a settlement?
  • How are their communication skills to work with all parties involved to get a settlement?

You might also look to see if they are members of the National Association of Public Insurance Adjusters. The NAPAI promotes standards for public adjusters.

Pro of Hiring a Public Adjuster

If you find yourself in the process of making a claim with your insurance company, you might find it worthwhile to hire a public adjuster. This might be especially true if you feel like the insurance adjuster is not including all the necessary costs for repairs from your claim.
Let’s take a closer look at the positives of hiring a public adjuster.
Knowledge and Professional Standards
Most states have strict standards for public adjusters. They can’t just decide this is a job they want to make money. The state requires careful training and knowledge to be licensed as a public adjuster. Often public adjusters are members of their professional organization which requires certain skill standards.
Public adjusters also must be:

  • Bonded
  • Fingerprinted
  • Pass a background check

You should also expect them to know the ins and out of insurance claims for home and business claims. They should also have some negotiation skills as they will be working closely with the insurance company adjuster to reach a mutually agreed-upon settlement.
Advocate Working on Your Side
Facing a catastrophic loss can involve some real stressors. You are faced with damage, loss and future repairs. There can also be an emotional toll on losing things in your home or business.
For many, hiring a public adjuster means they have someone to do the thinking and negotiating on their behalf. The public adjuster becomes your advocate, acting on your behalf.
This is especially important if you have experienced a huge loss like a home fire. It will be hard for you to think about all the things that were once part of your home and will need replacing. That becomes the task of the public adjuster to guide you through the process.
Possibility of Missing Part of the Claim
If you have a big claim, there could be things that need fixing you can’t see on the surface. Because of their experience and determination to find every possible thing, the public adjuster can help to make sure nothing is missed in the claim and claim settlement.
For example, if you had water damage on your wood floors from the upper-level bathroom. It might seem obvious that wood floors need to be replaced. But the water may have run down the inside of walls where mold could form or drywall damage could occur. This could impact how secure cabinets are on the walls.
More Claim Settlement Money
A public adjuster sometimes is able to land larger settlement claims for their clients. As a homeowner, you might not feel it’s your place or even confident to go back to the insurance adjuster and negotiate with them about the claim.
Certainly, you might not even recognize the possibility that something has been missed, so you don’t know to ask for more. Because of their experience, a public adjuster does know to ask. They will then negotiate on your behalf with the insurance company adjuster.

Cons of Hiring a Public Adjuster

There are some negatives to consider and many are associated with the reputation of public adjusters. Public adjusters, in some cases, have gained a reputation for chasing the money.
While they will advocate for you as the homeowner and there is some value to this, there are also some possible negatives to consider.
Let’s take a closer look at the negatives associated with public adjusters.
Many Only Do Major Claims
One negative of the public adjuster sector is the type of claims they are willing to work with. Many only want to work on large scale claims like a total loss house fire, for example.
Since they make their money based on the amount of the final settlement, they want to work on only the big cases, where there would be a big payday for them.
It might be harder to get a public adjuster involved in a claim worth only a few thousand dollars versus a claim for $20,000 or $200,000.
For the percentage they get, the might figure the smaller claims aren’t worth it. Before hiring a public adjuster, research the kind of work they do. Ask for references
Paying the Public Adjuster
In theory, you don’t pay the public adjuster out of pocket. They work on a contingency and get paid from the settlement amount they can get for you. The amount varies from area to area across the country. It also varies depending on the size of the claim.
It seems the average is around a 10% fee from the claim settlement. Some adjusters will lower their percentage for large cases, knowing the settlement amount is likely to be big. While some adjusters increase the percentage for claims on the smaller size, hinting they prefer to take those large settlement cases instead.
Time It Takes to Settle
In some cases, having a public adjuster involved helps move the claim along more quickly. They know the process and work with insurance companies all the time.
But like anything, the more people involved can sometimes slow down the process. There is likely to be more negotiation back and forth between the public adjuster and the insurance adjuster.
Sometimes when a claim can’t be settled the courts must get involved too. While they do act as your advocate, sometimes in their effort to raise the claim amount, the insurance company resists and it slows down the process. The more negotiation there is back and forth, the more time it is likely to take to get a settlement.

Public Adjuster Pros and Cons for Your Insurance Claim

Having damage to your home is stressful and difficult. Working through the claim process and getting repairs can be frustrating. As you work through the process, the public adjuster pros and cons are something you should consider.
If you trust your insurance company and feel like their adjuster is being forthright in helping to solve the claim, it’s likely you don’t need to get a public adjuster involved.
Do you have questions about your homeowner’s insurance? Do you need to discuss a claim you need to make? We are here to help take care of your insurance needs. Contact us today with your insurance needs inquiries.

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2 Responses

  1. As you mentioned, the public adjuster works for the homeowner. It seems like it would be an advantage to the homeowner to have their own adjuster. I will have to keep this in mind if I ever need an adjuster in the future.

  2. I was just informed to get a PA. Hope I’m not too late because my issue has been going on for way too long and when I told the insurance company/attorney that I’d back in touch with them, they wanted to throw me some mess I will NOT accept.

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