A public adjuster is an insurance claims adjuster who is an advocate for and paid by the policyholder in appraising and negotiating an insurance claim. Public Adjusters exist because of the unequal bargaining power between homeowners who have suffered a devastating loss and the insurer who holds their insurance proceeds pending resolution of the claim. Aside from attorneys, Public Adjusters licensed by state departments of insurance are the only type of claims adjuster that can legally represent the rights of an insured during an insurance claim process.

There are three classes of insurance adjusters: staff adjusters (employed by an insurance company or self-insured entity), independent adjusters (independent contractors hired by the insurance company) and Public Adjusters (employed by the policyholder). "Company" or "Independent" adjusters can only legally represent the rights of an insurance company.

In the United States, a Public Adjuster can only work with insurance claims related to personal, business and automobile property damages. Life insurance and other types of health insurances claims cannot be handled by a Public Adjuster. Also, most states require every Public Adjuster to be licensed and bonded in order to represent any policyholder in the respective State. Public Adjuster are required to have taken classes and be tested on the many aspects of handling claims, insurance companies, and policyholders.

In the United Kingdom, Public Adjusters are called Insurance Loss Assessors.

Among other things, it is the Public Adjuster's responsibility to:

• Evaluate the existing policy in order to determine what coverage may be applicable to an insurance claim;
• Make recommendations to improve on the insured's existing policy to make certain that the policyholder has the best coverage for his situation. Any changes to the policy are made by the policyholder's insurance agent;
• Research, detail, and substantiate every aspect of a claim, including building damage, contents, and additional living expense claims.
• Determine the appropriate values for settling all covered damages;
• Negotiate the best possible settlement with the insurance company on behalf of an insured.
• Conduct a policy consultation and inspection of the policyholder's property to identify any damage that the policyholder may not be aware of at the time.
  1. This inspection and policy review is usually done by most Public Adjusters at no cost to the policyholder.
  2. It is recommended that policyholders have this policy consultation and inspection prior to any claims in order to insure he has the best coverage in the event of a claim.
  3. This relationship is also important to establish prior to any claim, so in the event that damage is incurred to the policyholder?s property, he has at hand the Public Adjuster's knowledge and skills on his behalf from the beginning of the claim negotiation process.

Typically, most Public Adjusters are paid based on a percentage of the total settlement they negotiate. The Public Adjuster's fee may be justified by success in these negotiations. It is not uncommon to see a significant increase in the settlement amount once a Public Adjuster is hired by the policyholder.

Equally important is that a Public Adjuster is educated in the same fashion as insurance company adjusters and independent adjusters. The reason that this fact is notable is that many homeowners are not familiar with what damage to look for after a property damage incident or what their policy covers. Thus the policyholder can come up short when paying to have the damages taken care of and/or have hidden damage go unnoticed and cause the policyholder problems in the future

In short, a Public Adjuster has the knowledge and skills to work with the insurance companies to make certain the policyholder gets the maximum amount of reimbursement for both easily noticeable damage and more hidden damages. They obviate certain difficulties in negotiating with insurance companies. A Public Adjuster fosters the policyholder's best interests in the case of an insurance claim.

Many policyholders are unaware that Public Adjusters exist as an option; rather, policyholders assume that they must deal directly with the insurance company representatives. A professional, conscientious Public Adjuster can make a tremendous difference in the amount of a policyholder's settlement as well as reduce or eliminate the stress and hassle of dealing with property insurance claims.

Typically, most Public Adjusters are compensated based on a percentage of the total settlement they negotiate. Through such negotiation, the Public Adjuster's fee is justified in many cases. It is not uncommon to see a 60 to 80% increase in the settlement amount after a policyholder hires a Public Adjuster is hired. In other cases, the Public Adjuster's fee can be less than any increase in settlement, leaving the homeowner worse off than if he or she had dealt directly with the insurance company.

In some cases, a Public Adjuster can re-open a claim and negotiate for more money if a discrepancy is found after the claim has been settled. The fees for a re-opened claim are higher due to all the extra work involved but in the end the Policyholder may end up with more money to take care of their claim then if they did not have a Public Adjuster working on their behalf.

When to contact a Public Adjuster

It is best to head off a situation of underinsurance through a proper analysis of coverage needs ahead of time. Nonetheless, there are still many avenues available to policyholders to maximize their financial recovery and minimize their underinsured losses after a loss occurs. The experience and creativity provided by the assistance of a Public Adjuster are key to developing the best possible strategy for presenting an underinsured claim.

Shortly after notifing the insurance company of a loss, an adjuster representing the policyholder's carrier will visit the policyholder to gather facts about how the loss occurred, the magnitude of the loss, and the possibility of subrogation. The policyholder should take care in answering these questions, especially if the policyholder's knowledge of property insurance in general and the specific nature of their coverages is limited. Incorrect, incomplete or inadequately expressed answers may reduce the amount that can be claimed. In the absence of a public adjuster, a policyholder, unfamiliar with the basis for the exclusions, may accept the adjuster's position, which would result in his not getting paid for a loss that is legitimately covered under the insurance policy.

Policyholders find it increasingly important to employ their own outside consultants to help document and expedite their claims if they are to obtain a satisfactory claim recovery and restore their business operations as quickly and completely as possible. However, the fees of these outside experts, no matter how well-earned, can be an added burden when they are borne entirely by the policyholder.

Increasingly, insurance companies employ experts to support their side of a claim settlement, so it behooves today?s policyholder to take advantage of similar professional resources to help prepare, support and settle their claims. Understanding and utilizing the coverages available for this purpose can help protect the policyholder not only against financial loss, but for the cost of recovering it.^[1]

The Difference Between Public Adjusters and Attorneys

Homeowners also need to consider that Public Adjusters are not attorneys. There are areas of the claims process where a Public Adjuster cannot help the homeowner without engaging in the unauthorized practice of law. Construing contract language in the context of case law and statutory requirements is one such area. If the insurer might deny the claim by invoking certain clauses in the policy, you will need an attorney and not a Public Adjuster. If you are positive that the insurer will pay the claim and the only issue is the proper identification and valuation of the loss, then a Public Adjuster is a viable choice for the homeowner.

Because Public Adjusters are not attorneys, they are not subject to the same rules of professional conduct as that profession. States have therefore enacted by statute certain rules guiding the conduct of Public Adjusters. Illinois rules governing the conduct of Public Adjusters can be found here. Illinois Public Adjuster Rules

References

*

---

Source: Wikipedia | The above article is available under the GNU FDL. | Edit this article