What Is a Public Adjuster, and What Role Can They Play in Your Insurance Claim?

After serious damage to your home or business, filing an insurance claim can quickly become another source of stress. You may need to document what was lost, understand what your policy covers, obtain repair estimates, communicate with an adjuster, and respond to requests from your insurance company, all while trying to recover from the event itself.

Some policyholders handle that process directly with their insurance companies. Others choose to hire a public adjuster to assist them.

But what exactly does a public adjuster do? And when might you want one involved in an insurance claim?

What Is a Public Adjuster?

A public adjuster is an insurance claims professional who represents the policyholder rather than the insurance company.

That distinction is important when comparing the different people who may become involved in a property insurance claim. An adjuster employed by or working for the insurance company evaluates the claim on behalf of the insurer. A public adjuster is hired by the policyholder and works on the policyholder's behalf, subject to applicable state laws and licensing requirements.

Public adjusters are commonly associated with homeowners, commercial property, fire, storm, water, and other property-loss claims. The types of claims they may handle can differ from state to state.

Depending on the claim and the law where you live, a public adjuster may help:

• Inspect and document property damage
• Prepare an inventory of damaged or destroyed property
• Review the insurance policy and applicable coverage
• Estimate the value of a covered loss
• Organize documents required by the insurer
• Communicate with the insurance company or its adjuster
• Present supporting information concerning the amount of the loss
• Negotiate the value of the insurance claim

A public adjuster is not the same as an attorney. Public adjusters generally cannot provide legal advice or represent someone in litigation unless they are also appropriately licensed to practice law.

Do I Need a Public Adjuster?

Many policyholders successfully handle straightforward insurance claims directly with their insurance companies. Hiring a public adjuster may be worth considering when a loss is large or complicated, when documenting the full extent of the damage is difficult, or when the policyholder does not have the time or expertise to manage the claims process alone.

A public adjuster may also become involved after disagreements arise over the scope or value of a loss. However, there is no universal rule that a public adjuster must be hired before an insurance claim is filed.

Regardless of whether you plan to hire an adjuster, you should pay attention to the deadlines and notice requirements contained in your policy and under applicable state law. Waiting to report a loss simply because you are searching for professional assistance could create additional complications.

What Is the Difference Between a Public Adjuster and an Insurance Company Adjuster?

The primary difference is whom they represent.

An insurance company adjuster works for or on behalf of the insurer. Their job generally includes investigating the loss, reviewing the policy, evaluating documentation, estimating covered damage, and determining what the insurance company believes it owes under the policy.

A public adjuster is retained by the policyholder. Their role is to evaluate and present the claim from the policyholder's perspective and advocate for the amount they believe is supported by the policy and evidence.

Neither title alone tells you whether a particular person's assessment is correct. Disagreements can arise over repair estimates, the cause of damage, depreciation, the scope of necessary work, whether particular losses are covered, and many other issues.

That is why documentation and a careful review of the policy can become especially important when significant amounts of money are at stake.

How Is a Public Adjuster Paid?

Public adjusters typically charge the policyholder for their services. Compensation may be structured as a percentage of the insurance recovery or in another manner permitted by state law.

The rules vary considerably from one state to another. Some states limit the percentage a public adjuster may charge, and additional restrictions may apply following hurricanes, wildfires, or other declared disasters.

Before signing a public adjuster agreement, make sure you understand:

• How the adjuster will be compensated
• What services are included
• Whether the fee applies to the entire insurance payment or only additional amounts recovered
• Whether state law limits the fee
• What happens if the insurer does not increase its payment
• Whether and how you can cancel the agreement

A public adjuster's fee generally comes out of the policyholder's recovery, so the cost should be weighed against the assistance the adjuster is expected to provide.

How Do I Find a Qualified Public Adjuster?

Start by determining whether public adjusters must be licensed in your state and checking the adjuster's licensing status with your state insurance department or other appropriate regulator.

Do not rely solely on advertising, referrals, or an individual's representation that they are authorized to handle insurance claims.

You may also want to:

• Ask how long the adjuster has handled claims similar to yours
• Request references
• Ask for a written explanation of the fee
• Review the entire contract before signing
• Check whether your state provides a cancellation period
• Find out exactly who will perform the work on your claim
• Be cautious about anyone pressuring you to sign immediately after a disaster

Professional organizations can also be a source for locating public adjusters, but membership in a private organization should not replace verification through the appropriate state licensing authority.

What Is the Difference Between a Public Adjuster and an Insurance Attorney?

Public adjusters and attorneys can both assist policyholders, but their roles are different.

A public adjuster focuses primarily on preparing, documenting, valuing, and negotiating an insurance claim within the scope permitted by state law.

An insurance attorney can advise you about your legal rights, interpret disputed policy language, evaluate whether an insurance company may have violated the law or the policy, handle coverage disputes, negotiate on your behalf, and file a lawsuit when appropriate.

That difference can become particularly important when the disagreement is no longer simply about how much repairs should cost.

For example, you may want to speak with an attorney if your insurer:

• Denies a claim you believe should be covered
• Substantially underpays a covered loss
• Unreasonably delays investigating or paying a claim
• Disputes coverage based on exclusions or policy language
• Accuses you of misrepresentation or fraud
• Requests an examination under oath or takes other steps that could have legal consequences

If you already have an attorney representing you in an insurance dispute, speak with your attorney before hiring another professional to work on the claim.

Can I Hire Both a Public Adjuster and an Attorney?

Whether hiring a public adjuster and an attorney makes sense depends on the claim, the stage of the dispute, and the laws of your state.

A public adjuster may have already helped document and value a property loss before a legal dispute develops. An attorney may later become involved if questions arise about coverage, claim handling, contractual rights, or litigation.

Because hiring both can involve separate contracts, responsibilities, and fees, policyholders should understand exactly what each professional will be doing before signing an agreement.

What if My Insurance Company Denied or Underpaid My Claim?

A disagreement with an insurer does not automatically mean the insurance company acted unlawfully. Claims can involve legitimate disputes about coverage, the cause of a loss, the extent of the damage, repair costs, depreciation, deductibles, exclusions, and other policy provisions.

But an insurer is still required to handle claims in accordance with the policy and applicable law.

If you believe your insurance company has improperly denied, delayed, or underpaid a valid claim, consider preserving copies of your policy, photographs and videos, estimates, receipts, correspondence with the insurer, claim documents, and any reports prepared by adjusters or contractors.

An insurance attorney can review those materials and help determine what options may be available.

Morgan & Morgan Can Help With Insurance Disputes

Insurance exists to provide financial protection when covered losses occur. When a major property loss happens, policyholders should be able to understand what their policy provides and receive the benefits to which they are entitled.

Public adjusters can play a useful role in that process for some policyholders and some claims. For others, working directly with the insurer may be sufficient. And when a dispute involves coverage, claim handling, or other legal issues, it may be time to speak with an attorney.

If your insurance company denied, delayed, or underpaid your claim, Morgan & Morgan may be able to help. Contact us today for a free case evaluation to learn more about your legal options.