A Public Adjuster is a professionally licensed insurance claims adjuster who advocates for the policyholder in appraising and negotiating an insurance claim. They are typically employed by a claimant, such as a property owner, especially in the aftermath of significant property damage.
Role and Responsibilities
Advocate for the Insured
Public adjusters work exclusively for the policyholder, not the insurance company. Their primary responsibility is to ensure the claimant receives a fair settlement.
Claims Process Management
Public adjusters manage the entire claims process, including documentation, communication with the insurer, and negotiating the settlement.
Damage Assessment
They conduct thorough inspections of the damage, quantify the loss, and prepare an estimate that represents the true cost of restoring the property to its pre-damage state.
Types of Adjusters
- Public Adjusters: Represent the insured party.
- Staff Adjusters: Work directly for the insurance company.
- Independent Adjusters: Contractors hired by insurance companies on a case-by-case basis.
Special Considerations
Licensing and Regulation
Public adjusters must be licensed by the state’s insurance department. Requirements include passing an exam and maintaining continuing education credits.
Fees and Payment
Public adjusters are typically compensated through a percentage of the insurance settlement. This fee structure incentivizes them to maximize the claimant’s recovery.
Examples
Example Scenario
Imagine a homeowner experiences extensive damage to their home due to a storm. The insurance company offers a settlement that seems insufficient to cover the necessary repairs. A public adjuster is hired to reassess the damage, file the claim, and negotiate with the insurance company to achieve a fairer settlement amount.
Historical Context
The profession of public adjusting emerged in the United States in the early 20th century as a response to perceived biases in claim settlements made by insurance companies’ adjusters. As the insurance industry expanded, so did the need for claimants to have professional representation in complex claim negotiations.
Applicability
Residential Claims
Public adjusters are commonly hired by homeowners dealing with claims related to fire, water damage, theft, and natural disasters.
Commercial Claims
Businesses often engage public adjusters for commercial property claims involving extensive losses and potential business interruption.
Comparisons
| Public Adjuster | Staff Adjuster | Independent Adjuster |
|---|---|---|
| Represents Policyholder | Represents Insurance Company | Temporary Contractor for Insurer |
| Paid by Claimant | Paid by Insurance Company | Paid by Insurance Company |
| Advocates for Maximum Settlement | Aims to Minimize Payout | Balances Interests |
Related Terms
- Insurance Claim: A formal request to an insurance company for payment based on the terms of the insurance policy.
- Settlement: The final agreement reached between the insurer and the insured on the amount to be paid for a covered loss.
- Loss Assessment: The process of determining the extent and value of damage following an insured event.
FAQs
What qualifications should a public adjuster have?
How do I find a reputable public adjuster?
When should I hire a public adjuster?
References
- “Public Adjuster”, National Association of Public Insurance Adjusters, NAPIA.
- “How Public Adjusters Work”, Insurance Information Institute, III.
- “Public Adjusters: Your Personal Claim Advocate”, United Policyholders, UP.
Summary
In summary, a Public Adjuster is a crucial advocate for insurance claimants, especially property owners facing significant damage. They ensure a fair settlement by managing the claim process, assessing damages, and negotiating with the insurer. By understanding their role, licensing, and fee structures, claimants can make informed decisions to safeguard their interests in the aftermath of a loss.
