Public insurance adjusters help policy holders receive payment from insurance companies. Public adjusters represent the policyholder for a small percentage of the resulting settlement money from the insurance claim.
Contents
What they do
Public insurance adjusters represent the policyholder during the insurance claims process. These individuals or companies can inspect property damage, but cannot advise homeowners on questions of the law. They also help in building the case that is argued against the insurance company.
Adjusters mostly represent clients who have been victim to property damage or loss. Most cases involve disasters including: fires, floods, hurricanes, frost damages, burglaries, and earthquakes.
Fees
Most public adjusters are paid based on a percentage of the total settlement. For example, one Georgia company states their fee is between 5% and 10% based on the type and amount of the insurance claim. However, lower percentages are used for larger losses. Higher percentages are needed for smaller losses. Smaller insurance claims can have similar costs as larger claims, but because the recovery is less on smaller claims the fee range must be adjusted to compensate the operating costs. Fees of 10% to 12% are ordinary and typical for losses of $100,000 or greater when handled by standard-rated public adjusters. Expert-rated public adjusters get a higher fee than standard-rated adjusters. For example, an expert public adjuster can charge 12% to 15% on a loss that exceeds $100,000. However, experts possess capabilities to obtain the most effective results. Therefore, highly qualified adjusters can be expected to be better skilled at achieving a better increased settlement amount than an adjuster who is not an expert. Adjusters who are experts must be classified and registered as an expert by the judicial system. Most public adjusters are not court-registered expert adjusters. Some public adjusters charge a flat percentage, while others use a regressive scale. For example, 25% of the first $100,000, 15% between $100,001 and $200,000, and 10% of any amount beyond that. Claims that are less than $50,000 are considered small losses. There are Public Adjusters who will not service smaller claims at all, while other public adjusters charge a normal range of a 30% to 35% fee rate for insurance claims with a settlement value that is less than $50,000. Public adjusters can charge a lower fee on the total settlement value of the claim, or they can charge a higher fee on an improved settlement amount that is beyond the initial settlement originally offered by the insuring organization. For example, for a $100,000 loss, a fee can be 12% on the whole claim value, where the risk is shared but for a lower fee; or alternatively, if the initial settlement was $50,000, then a public adjuster might accept a 25% fee not on the initial $50,000 but on any additional recovery settlement, a partial amount, exceeding the initial $50,000 regardless of the additional amount. However, this additional recovery method means that the public adjuster takes all of the risk, hence the higher fee. It's important to note that some states cap public adjuster fees at levels such as 10% or 20%, and some consumers opine that normal public adjuster fees are standardized, citing 10% on any claim regardless of its value. This is incorrect, and also because such limitations can cause public adjusters to avoid smaller claims altogether, since the services' costs can be a liability without providing a fair, reasonable and necessary business profit. Most states do not cap fees for this reason. Higher fees on smaller claims can provide the adequate compensation that a public adjuster needs to accept the costs of providing full services. Regardless of the fee structure, the fee may be offset by an increase in the settlement amount. In many jurisdictions, the fee structure must be disclosed up front. It is important to note that a public adjuster cannot obtain more than the policyholder is legitimately entitled to. However, the full potential recovery value of an insurance claim is often not obtained without professional assistance like that which comes from a very capable public adjuster.
Licensing
Most American states require public insurance adjusters to be licensed with a professional body before they can practice.
National body
A large collaboration of public insurance adjusters is the National Association of Public Insurance Adjusters, which helps to coordinate claims and make the business environment open to adjusters.