Public claims adjusters can level
the playing field for you
By Joe Frey
Your house has just been badly damaged by an earthquake: foundation cracking; wall collapsing; roof leaking. Many homes in your neighborhood have been hit just as hard and insurance company claims adjusters are becoming more prevalent than dog-walkers. You can’t remember the last time you looked at your homeowners policy. Do you know what you’re entitled to?
Unfortunately, most people don’t know the details of their policies because they are chock full of legalese. However, in the case of home or property damage (not auto-related), consumers can turn to public claims adjusters to decipher their policies and get them a fair settlement with their insurance company.
Public adjusters work for both individuals and businesses, but most cater to the individual policyholder. Jim Dilks, a public adjuster with Tri-State Public Adjusters, based in Bensalem, Pa., says that about 80 percent of his company’s business comes from homeowners.
“Insureds don’t need to hire an adjuster for a fire on the gas range and a little bit of smoke damage,” says Stephen R. Figlin, president of TAG-The Adjusters Group, based in Philadelphia. However, you should hire an adjuster if your lifestyle is significantly disrupted. That is, when you can’t handle finding new living arrangements, filing a claim, and arranging for a damage survey of your property, you should bring in a public adjuster.
Public adjusters have to follow the guidelines written in their state that say what they can and can’t do. Adjusters aren’t allowed to handle bodily injury claims, auto claims, or third-party claims (such as a trust or an estate). They also are obligated to give you timely service (states usually require a settlement within 10 to 15 days after liability has been established), make sure you’re given a reasonable offer from the insurance company, and disclose every part of the claims process to you.
Advantages of using a public adjuster
Public claims adjusters know the insurance process inside and out, so they can minimize the hassle that comes with collecting documents and evidence, and then negotiating with the insurance company. The adjuster will file all your pertinent paperwork with the insurance company, arrange for the inspections of your damaged property if needed, and then haggle with the insurance company if it refuses to pay your claim.
A good adjuster will also help control what you say to your insurance company. The adjuster will be forthright with your insurer, but won’t divulge any information that might damage your case. Remember, the adjuster is your employee and will pursue your interests only.
If you do decide to have a public claims adjuster help you out with your claim, expect them to take between 5 and 50 percent of your claim settlement. As the settlement amount goes up, the adjuster’s cut generally goes down. For example, if you settle for $5,000, the adjuster might take 30 percent of that.
Adjusters’ fees also depend on the nature of the claim and your marketplace. In Philadelphia, for example, a consumer will benefit from the competition among the 16 adjusting firms that operate in and around the city, and adjuster fees will be lower. However, in Montgomery County, Pa., where only four firms operate, you will probably pay more for your adjuster’s service.
You’ll have to sign a contract with your adjuster when you decide to hire him. You agree to give a portion of your settlement to your adjuster by signing the contract, but if you have second thoughts, you can terminate the agreement within 72 hours of signing. You also have the right to sue your public adjuster if he doesn’t perform his job correctly.
Do I need an adjuster’s help?
In some cases, you don’t need to solicit the services of a public adjuster. If you’re familiar with your homeowners policy and with construction costs, you can probably maximize the settlement your insurance company gives you. However, homeowners policies are often difficult to navigate because of the legalese and various named and unnamed exclusions.
Depending on who you talk to, you may or may not need a public adjuster. One piece of advice is to seek a public adjuster’s service right away. “It’s difficult for adjusters to come aboard in the middle of a case,” Dilks says. “[Negotiating your claim yourself] is like representing yourself in court,” Dilks says. “You can do it successfully, but your chances for error are greater.” Dilks says it’s nearly impossible for consumers to know what they can expect from their insurer in a homeowners’ claim situation, even after they read their policies.
Industry officials advise consumers to wait for the company’s first offer before deciding whether to hire an adjuster. “A lot of times a company’s first offer is just that, a first offer,” says John Eager, director of claims services at the National Association of Independent Insurers. “Insurers aren’t inflexible to settling claims higher than the first offer.”
From Barnett Bank Newsletter – Volume 2, No. 1, Winter 1996
Insurance: Why Hire a Public Adjuster?
Author: Jill Andresky Fraser
Sooner or later, every CEO confronts an insurance nightmare. Gerald Erlich, whose real-estate-brokerage firm, Hanover/Erlich Ltd., is based in Denver, faced such a nightmare last year, after a tenant in his condominium-loft project fell asleep while smoking. “The mattress caught on fire, but the real damage came from the sprinkler system that started automatically,” Erlich recalls. His original estimate of the damage was between $5,000 and $10,000.
But Erlich didn’t attempt to file the insurance claim by himself. “Years earlier I had had a loss experience that taught me how difficult it is for consumers to deal with insurers,” he says. In the course of his earlier claim, Erlich hired a public insurance adjuster to represent his interests. After last year’s fire, he decided to do the same.
Public adjusters are “insurance adjustment experts who work exclusively for the insured in cases where a fire or other insured peril occurs,” explains R. Scott DeLuise, of Matrix Business Services, the Denver firm that handled Erlich’s claim. What’s the advantage? “When you file a large claim, you enter a minefield,” DeLuise says bluntly. “A consumer needs to understand — before even filing a claim — that the goal of insurance companies is to pay out as little as possible.”
According to DeLuise, most consumers make the mistake of assuming that quantifying losses from, say, a theft or a fire is simply a matter of accuracy and precision: “This is an art. It’s not in the policyholder’s interest to assume that whatever loss estimate the insurance company comes up with is accurate.”
There is a good reason for the discrepancy. Following a loss, public adjusters scan policies to identify all possible sources of insurer reimbursements. “With the Hanover/Erlich fire, we tracked down extensions of coverage and endorsements that wound up covering much more than what appeared on the face of the insurance policy,” recalls DeLuise. “We ultimately were able to recover the cost of extra management fees that were incurred because of the fire; lost rent from apartments that suffered water damage; and the cost of hauling away debris.”
In fact, insurer reimbursements far surpassed Erlich’s original estimate. “We received more than $60,000, which I could never have achieved on my own,” he says. “I’m convinced that filing a claim without a public adjuster would be as impossible as performing brain surgery on yourself.” Typical fees are $150 to $300 per hour, or 10% of collected losses.