A Public Adjuster is a professional claims handler claims adjuster who advocates for the policyholder in
appraising and negotiating a claimant's insurance claim. Aside from attorneys and the broker of record, 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. A
public adjuster will be most beneficial when it is clear that the insurer will
pay the claim and the only issue is the proper identification and valuation of
the loss. Most public adjusters charge a percentage of the settlement.
Primarily they appraise the damage, prepare an estimate and other claim
documentation, read the policy of insurance to determine coverages, and
negotiate with the insurance company's claims handler.
A
public adjuster is a representative of the policyholder who advises, manages,
and submits a claim to the policyholders insurance company.
There
are three classes of insurance claims 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.
Outside
the United States adjusters are commonly called (or translated into English as)
"insurance loss assessors"
(or simply "loss assessors") and staff adjusters or independent
adjusters are called or translated as "insurance loss adjusters" (or simply
"loss adjusters"). However,
there is a clear distinction between a loss adjuster, who works on behalf of an
insurance company, and a loss assessor who works on behalf of a policyholder.
Successfully Negotiate Property Damage Claims We can evaluate your existing insurance policies to determine what coverage may be applicable to your claim. We then research, detail, and substantiate damage to buildings and contents and evaluate any additional covered expenses, including business interruption losses and extra expense claims for businesses. In addition to recommending a good Public Adjuster it’s good to have an experienced Accountant and Attorney on your side.
Licensing
and regulation
Currently,
44 states (and the District of Columbia) have in place some form of statutory
and/or regulatory scheme which licenses public adjusters. The states that do
not are: Alaska, South Dakota, and Wisconsin.[5] In
addition, it is important to note that on October 14, 2005, the National Association of Insurance Commissioners (NAIC)
adopted the Public Adjuster Licensing Model Act (MDL-228), which governs the
qualifications and procedures for the licensing of public adjusters. It
defines a public adjuster as "any person who, for compensation or any
other thing of value, acts on behalf of an insured", specifies the duties
of and restrictions on public adjusters, including regulations for the
following: examination, bond or letter of credit, continuing education, public
adjuster fees, contracts, record retention, and standards of conduct. In
addition, the model act states that public adjusters may only act or aid on the
benefit of the insured in first-party claims.
Holding
a license in one state only permits the licensed to practice in that state.
Although the regulations vary from state to state, the model act states that a
non-resident can obtain a license in another state if their home state allows
non-residents to apply for a license on the same basis. This reciprocity agreement means that
in many cases one can apply for a license in another state without having to
pass that state's examination or pre-licensing education requirements. Generally, public adjusters only work
with insurance claims related to property damages and the business losses that
they trigger such as business income, builders' risk, mechanical and electrical
breakdown, extra expense and expediting expense, and leasehold interest.
Although it is uncommon for public adjusters to handle health insurance claims,
in some states such as Florida they are legally authorized to handle claims in
all lines of insurance except life and annuities.
Duties
The
public adjuster's main responsibilities are to:
·
Evaluate existing insurance policies in order
to determine what coverage may be applicable to a claim
·
Research, detail, and substantiate damage to
buildings and contents and any additional expenses
·
Evaluate business interruption losses and
extra expense claims for businesses
·
Determine values for settling covered damages
·
Prepare, document and support the claim on
behalf of the insured
·
Negotiate a settlement with the insurance
company on behalf of an insured
·
Re-open a claim and negotiate for more money
if a discrepancy is found after the claim has been settled
Typically
a policyholder hires a public adjuster to document and expedite their claims,
obtain a more satisfactory claim recovery, more quickly, and completely restore
their residence or business operations, and insulate themselves from the stress
of engaging in an adversarial role with a large corporation. However, the cost
of hiring outside experts, no matter how well-earned, can be an added burden
when they are borne entirely by the policyholder. The added burden can be
alleviated by the work of a public adjuster. However, policy holders who are
not properly indemnified by their insurance carriers may be left with little
choice but to hire professional assistance to recover the claim payment to
which they are entitled.
Public
adjusters must be able to recognize claims that may be insubstantial and
disputable and explain such problems to the client. The everyday meanings of
terms like "collapse", "partial collapse" and "extent
of physical damage" might be entirely different from their legal
interpretations, requiring the adjuster to clarify such terms for the client.[ Regulations
regarding the uses of these terms are constantly in a state of flux so it is important for public
adjusters to have a firm grasp of the law including the division of legal
responsibilities between insurance companies and policyholders.
Successfully Negotiate Property Damage Claims We can evaluate your existing insurance policies to determine what coverage may be applicable to your claim. We then research, detail, and substantiate damage to buildings and contents and evaluate any additional covered expenses, including business interruption losses and extra expense claims for businesses. In addition to recommending a good Public Adjuster it’s good to have an experienced Accountant and Attorney on your side.
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 being claimed under a policy of insurance. Higher percentages
are needed for smaller claimed 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 for the operating costs. All public
adjusters are not equal in their abilities to secure policy benefits. Skills of
performance can vary significantly between public adjusters ranging from basic
to elite expert. Fees of 10% to 12% are ordinary and typical for claimed 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, superior experts possess capabilities to obtain the
most effective results. Therefore, highly qualified adjusters can be expected
to be better skilled at achieving a greater increased benefits settlement
amount than an adjuster who is not an actual expert. Adjusters who are experts
must be classified and registered as an expert by the judicial system. Public
adjusters declaring themselves to be experts should be verified, because such
notice is not always factual. For those public adjusters who proclaim to be
actual experts, it's highly recommended that their credentials be validated to
prove such qualifications. Most public adjusters are not court-registered
experts, but instead just have claims experience. Experience is often not
expertise. Some public adjusters charge a flat percentage or a flat fee set
price, while others use a regressive scale. It depends, in part, on the State
Law where the loss occurred. For example, a regressive scale can be 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 claim 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 cost risk can be a shared expense with the client, but for a lower fee
which is a benefit for the client; 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 referred to as "new
money", being a partial claim value of an amount which exceeds the initial
$50,000 settlement, where fees apply exclusively to only the additional amount
recovered. However, this additional recovery method of "new money
only" means that the public adjuster assumes all of the cost risk and
expense, with no cost risk shared by the client, hence the higher fee. (For a
claim not covered by the Policy, the public adjuster could experience a business
loss from operating expenses spent on "new money only" claims that
are limited to only improved settlement recovery services). There are public
adjusters who contract for "new money only" services but charge fees
of 40% and 50% to accept that high risk, where any improved settlement benefit,
or the new money recovered, is essentially split about evenly between the
public adjuster and the client. 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 not accurate and cannot work. Such limitations
can cause public adjusters to avoid helping consumers with smaller claims
altogether when the services' costs can actually become a financial loss if not
providing a fair, reasonable and necessary business earnings' margin needed by
public adjuster firms in order to operate, just as with any business. Most
states do not cap fees for this reason, while nearly all states welcome public
adjuster services for their insuring public. Professional fees must be adequate
for public adjusters to cover operating and business costs while still
providing sufficient business income returns on those costs. Higher fees on
smaller claims having low recovery values are necessary to provide the adequate
compensation that a public adjuster needs to accept the costs of providing full
services. Regardless of the fee structure, the public adjuster professional fee
may, and will likely, be offset by an increase in the settlement amount on a
covered claim. 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, but public adjusters ―especially
experts― generally recover a better financial settlement benefit than the fees
charged to their clients, thereby leaving their clients with a net financial
improvement of benefits recovery after fees are paid. The indemnity promised
and provided for by an insurance policy, or the full potential financial
recovery value of an insurance claim, is often not obtainable without
professional assistance like that which comes from a very capable public
adjuster.
Successfully Negotiate Property Damage Claims We can evaluate your existing insurance policies to determine what coverage may be applicable to your claim. We then research, detail, and substantiate damage to buildings and contents and evaluate any additional covered expenses, including business interruption losses and extra expense claims for businesses. In addition to recommending a good Public Adjuster it’s good to have an experienced Accountant and Attorney on your side.
Loss recovery insurance
Loss
Recovery Insurance is an insurance policy devised by Lorega Ltd - which covers
the cost of an independent Chartered Loss Adjuster, who acts solely on behalf
of the behalf of the policyholder, in preparing, negotiating and settling an
insurance claim. Insurers always have the benefit of staff or independent
adjusters to act on their behalf, reducing the claim wherever possible. Loss
recovery insurance helps level the playing field by providing the policyholder
with independent expert advice. Lorega Limited is a Lloyd's Managing General
Agent, based in London, and distributes a number of assistance insurance
products which provide expert help, when it is needed, to policyholders in the
UK.
When to
contact
While
it is not always clear when a
policyholder may benefit from hiring a public adjuster, the most benefit is
likely to be realized if they are engaged immediately in case of a loss.
Shortly after the insurance company receives notice of a loss, an adjuster
representing the insurance company will visit the policyholder to gather facts
about how the loss occurred, the magnitude of the loss, and the possibility of subrogation. Incorrect, incomplete or
inadequately expressed answers to the adjuster's questions may reduce the
amount that can be claimed. A public adjuster engaged early in the process,
before the fact-finding stage, will have more opportunity to help the
policyholder receive a fair settlement for all losses legitimately covered
under the insurance policy. However, any time during
negotiations with the insurance company and even after a settlement has been
received by an insured, a public adjuster may be able to negotiate for a higher
amount.
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