What is a Public Adjuster and What Do They Do?

By Ron Reitz In California, there are three types of licensed Insurance Adjusters According to CAPIA, the California Association of Professional Insurance Adjusters a Company Adjuster is employed by the Insurance Company to represent the company in dealing with your loss and damages. The Company Adjuster's main responsibility is to protect the interests of the Insurance Company. An Independent Adjuster is hired by the Insurance Company to represent the company in dealing with your loss and damages. The Independent Adjuster's main responsibility is also to protect the interests of the Insurance Company. A Public Adjuster is the only Adjuster specifically licensed by the State of California to represent you, the Insured. The Public Adjuster's main responsibility is to protect you and your interests in claims against a loss with the Insurance Company. In addition to California, currently more than 43 other states and the District of Columbia require an adjuster to hold this licensure in order to represent the insured. According to NAPIA, the National Association of Public Insurance Adjusters, "Public Adjusters are professionals who are employed exclusively by a policyholder who has sustained an insured loss. They handle every detail of the claim, working closely with the insured to provide the most equitable and prompt settlement possible. A Public Adjuster inspects the loss site immediately, analyzes the damages, assembles claim support data, reviews the insured's coverage, determines current replacement costs and exclusively serves the client, not the insurance company." What does that mean? If you are overwhelmed by a process of determining what coverages you have and then calculating the amount of your loss, you may consider speaking with a Public Insurance Adjuster. Insurance policies can be very complex and difficult to understand. Often coverage is excluded in one section of the policy and then granted back to you in another section. It is also very important for the insured to meet all of the policy conditions in order to be paid on their claim. If you have ever had the unfortunate experience of suffering a loss and going through the claim process, you will understand what a daunting ordeal it can become. However, after a disaster, insurance companies often discourage claimants from hiring a Public Adjuster. According to United Policy Holders, a non-profit, tax-exempt organization dedicated to educating the public on insurance issues and consumer rights, "This happens all the time. Insurance companies don't want the insured to be on an even playing field. They want to control the situation and not deal with someone as or more knowledgeable than they are. Insurers are predisposed to minimize claim payments. Public Adjusters are predisposed to maximize claim payments." Public Adjusters help you get your life back. Instead of using up all your waking hours battling with the insurance company, your Public Adjuster does that for you. A good Public Adjuster works with you to maximize your time so that you can get your daily life, your family life, and your work life back in order while the Public Adjuster and the Insurance Company negotiate to get your home and possessions as close as possible to the state they were in before the disaster. Experienced Public Adjusters are familiar with the local insurance companies, their representatives and their regional adjusters. They may have worked together before and may be able to effectively come up with a plan that will maximize the insured's insurance claim payment without requiring a lot of heated discussion and argument. It makes sense to let two professionals amicably settle your claim while you go ahead and live your life. The insurance company adjuster knows that the Public Adjuster is an expert with the intricacies of insurance policies and negotiation, and therefore he or she is much more likely to come up with a larger, more accurate and acceptable offer. Like with most business negotiations, the easier and more professional the discussion (i.e. no emotion), the more likely the settlement to be biased towards the policyholder. How a Good Public Adjuster Can Help Save Your Family and Your Emotions One of the biggest challenges in coming to a solution that is acceptable to all parties in a disaster insurance case is emotion and anger. For the homeowner who has lost everything, this is a very emotional time. Your spouse may be devastated and angry. Your children are devastated, lost and confused. Everything they know is gone. You may have even lost your family pet in the disaster. This emotional roller coaster can tear families apart. Now, add the stress of compiling all necessary rebuilding costs and the strain of negotiating with the insurance company and the insurance company's adjusters and you will find yourself in a very difficult environment. It is common to feel helpless and desperate after a fire destroys all of your possessions. Having to then suffer through the indignity and endless questions from a seemingly uncaring insurance claims representative is enough to send the most sane and calm person over the edge. By letting a qualified public adjuster work on your behalf, you will be saving yourself a great deal of emotional turmoil. Most insurance policy holders who have been through the process say this is the biggest benefit of using a Public Adjuster. Yes, getting a big payout is good but the fact they are once again able to live their lives while the adjustment and negotiation is in process is often the most valuable part of the entire process. Public Adjusters will keep you from signing documents that you shouldn't, and they will make sure you keep the right documentation of your expenses. They will also do their best to make sure you do not make any mistakes that will delay or damage your claim. Good Public Adjusters understand your tears, fears and anger. They won't cut you off or walk away from your emotions. A good Public Adjuster will take the time to listen; they will help make your life as livable as possible while the claim adjustment is underway. One of the most difficult and challenging aspects of filing a claim is creating an inventory list of your possessions and assigning correct replacement values to those items. A good Public Adjuster will show you how to do this - tips and tricks that will help the property owner recall what was lost as well as the best ways to figure out and calculate replacement costs. Many Public Adjusters can actually do this work for you - researching the value of particular items you lost and how much it will cost to replace them. Doing this kind of research can consume many hours a day. For many disaster survivors it is much more efficient and less heartbreaking to have their Public Adjuster do that for them. Ok, lets talk about money. Your Public Adjuster will work with you and various construction, restoration and repair professionals who know LOCAL conditions, prices, and current building codes in order to develop an accurate estimate of what it will take to truly rebuild your property to its previous condition. This includes various improvements and additions that you have made to the property, as well as upgrades that are now required to meet local building codes - as long as you have the appropriate coverages. Your Public Adjuster will also review the costs of rebuilding your outbuildings and additional structures such as a garage, patio, pool house, etc. Public Adjusters will also review and prepare estimates to restore your landscaping based upon your specific coverage. Many people forget the many tens of thousands of dollars they had spent on plants, materials and labor required to create a well-landscaped yard. Your homeowners insurance policy should cover that restoration as well. A good Public Insurance Adjuster understands a wide range of insurance policies. They have seen plenty of insurance policies and have been trained to understand the various policy language, endorsements, exclusions riders and schedules. The language is often so convoluted that even the professionals may not agree on what the policy is actually saying. This is when an experienced and educated public adjuster can make all the difference. According to NAPIA, " The typical fire policy contains hundreds of provisions and stipulations - various forms and riders that are constantly changing and many complex details about your requirements in case of loss. Most people do not know or understand these policy provisions - and most do not realize that the burden of proof is on them, the policyholder. Most insurance company representatives actually prefer to work with an experienced accredited public insurance adjuster rather than an inexperienced insured." Unlike an insurance company adjuster, a good Public Adjuster will take the time to go through ALL your policy documents to make sure you are getting ALL the money that you are entitled to. What if you are under insured? As a result of the wildfires that swept through Southern California in 2003 and 2007, it became evident that many homeowners were not properly insured. Sometimes it was their fault - they deliberately made a decision to not pay for the insurance they needed. However, in many cases, as their homes had increased in value, as they added improvements, and as overall repair and replacement costs skyrocketed, their policy was not reviewed to see if it had appropriate amounts of coverage to meet the replacement cost burden of the home. A good Public Adjuster understands the impact and reality of under insurance and in certain cases, can work with the insurance company to get you monies for coverage that you should have had but were not offered or provided. Why does a property owner need a Public Adjuster? According to NAPIA, "The highly stressful period following a loss is a difficult time for individuals and businesses. A Public Adjuster can take those major headaches away and let you get back to your home or business. A typical fire or flood policy contains hundreds of provisions and stipulations, constantly changing forms and endorsements, and many complex details such as inventory appraisals and real estate evaluations that are required in case of a loss. Most policyholders do not know that the burden of proof is theirs. Public Adjusters know the insurance business and are familiar with all procedures so they can work quickly to expedite payments." By using a good Public Adjuster, not only will you get properly compensated for your insured losses, but you will also be able to avoid much of the conflict, anger and helplessness that can sometimes arise when adjusting an insurance claim on your own. Consider your family - your spouse and children. Consider your job. Do you have the available time and energy necessary to deal with the insurance company? A good Public Adjuster will get you what you are owed and may save both your career and your family by not monopolizing your time. http://www.qualityclaims.com Ron Reitz is president of San Diego-based Quality Claims Management Corp., a nationally licensed public insurance adjuster, providing hazard claim recovery services to investors, mortgage servicers, homeowners and businesses. Earlier, he pioneered the national hazard insurance claims business of GMAC-RFC (now GMAC-ResCap). He is the past president of the California Association of Public Insurance Adjusters and currently serves on the board of the National Association of Public Insurance Adjusters. Contact Quality Claims Management at (866) 45-1183 or http://www.qualityclaims.com.

Why Hire a Public Adjuster?

By Michael Birzon


You've seen the television commercials warning you 'not to speak to the insurance adjuster!'. Attorneys and public adjusters caution the public that insurance companies have their attorneys fighting for them and you need an attorney or public adjuster fighting for you!

However, there is a big difference between an attorney and a PA. Attorneys are required to graduate college, attend 3 years of law school and pass a rigorous state bar examination. Adjusters who represent property owners against insurance companies must pass a 100 question licensing test with no prerequisite course of study at all.

During the 2004-2005 storms the University of Central Florida received call after call from candidates, particularly in South Florida, who wanted to qualify for a 3-20 license. NOTE: Adjusters who represent property owners are paid a percentage fee from any monies recovered on behalf of the client.

SOLICITATION

When callers were asked if they had any claims experience, it was often the case that the new applicant was going to serve as a 'sales person' rather than an adjuster, but they needed a license to solicit clients.

What that meant was that the new licensee was going to personally call on disaster victims trying to sell them on a PA firm's services. Making that sale meant that the sales person would receive a percentage of any insurance recovery.

Now attorneys are not allowed to go to someone's house and solicit clients, so the question must be raised, why does Florida allow Public Adjusters to solicit clients in person? Honestly, there is no good answer to that question.

Disaster victims are vulnerable and for that reason, attorneys may not engage in solicitation. Public Adjusters argue that property owners need that information, but the same argument could be made for legal services as well.

LICENSING AND APPRENTICESHIP

As of January 1, 2009, new licensee candidates will no longer be allowed to just take the state licensing examination. They will be required to serve a 12 month apprenticeship under the guidance of a licensed 3-20 Adjuster. Sounds good, except there is no requirement that any licensed PA actually provide an apprenticeship.

The Catch 22 is that while new Public Adjusters must serve an apprenticeship, there are not likely to be many, if any at all, available. PA's are not required to actually provide apprenticeships to new applicants. If there are few or no apprenticeships, there will be no new public adjusters competing with existing firms for those contingency fees.

ATTORNEYS VS PUBLIC ADJUSTERS

Why would a property owner hire a PA rather than an attorney? Public adjusters will claim that they know the claims process better than attorneys. This may be true in some instances, since some public adjusters come from an extensive claims background, however many do not.

One thing is absolutely true...all attorneys come from extensive legal training and no public adjuster is empowered to file a lawsuit or litigate a claim that cannot be settled. If you are considering hiring a public adjuster, here are some guidelines to consider:

1. What is the adjusters background and training?

2. What types of cases have been successfully settled and are there references you can contact?

3. What complaints, if any have been filed against the adjuster or firm?

TIP

Find out what the insurance company's position is before employing a public adjuster. If you are the insured you have an obligation to cooperate and assist in the settlement of your claim. It may well be that you can resolve your claim without pay a percentage to either an attorney or a public adjuster.

In the end, whether you are hiring a public adjuster or an attorney, find out all you can about that individual before signing a contract. You are your own best advocate!

ABOUT THE AUTHOR
Dr. Michael Birzon is an attorney and adjunct professor with Florida Insurance University/University of Central Florida. Dr. Birzon has litigated claims for over 30 years and is the author of the Accredited Claims Adjuster Designation approved by the State of Florida. You may contact Dr. Birzon at (407) 927-1235 or email at: flainsu@mail.ucf.edu