While out on a storm, an adjuster will most likely come across all manner of people. Some will try to claim authority over the situations. Others will try to deceive or stretch the truth and some will be very helpful. It is up to the adjuster to know who these people are and what they are trying to do.
A common person used by the policyholder is a public adjuster.
In this area of Texas, public adjusters are not common, but in northeast Florida, an adjuster will deal with a public adjuster every day. It’s a common trend in those areas of the United States that people feel like it is necessary to have a public adjuster present, thus everybody has them.
These reasons include: the policyholder is too busy, the policyholder may not understand or know anything about the damages that have occurred to their property; the policyholder may want someone who knows how to handle insurance losses to handle the claim for them; or multiple other reasons.
What does a Public Adjuster do?
A public adjuster is a licensed adjuster just like an independent adjuster only he only works on behalf of the policyholder. So essentially the policyholder has hired the public adjuster to handle the claim on their behalf—could be for multiple valid reasons.
During hurricanes, public adjusters will always be there, but they most likely won’t be there at Ground Zero—the beginning of the claims for a storm. They don’t want to be a part of that portion of the storm. They want to let everyone—the IAs usually—get in there and deal with all the messy claims. Then after, usually about three months, that’s when the public adjusters come in and want to reopen the claims and work them.
A public adjuster is present to handle the entire claim. They are not there necessarily to handle the job or do the work. They are paid a percentage of the proceeds of the claim—typically 20%.
How to Communicate with a Public Adjuster
Only a few firms remain that give the adjuster—either the IA or the staff adjuster—authority to speak on behalf of the carrier and settle a claim.
When an adjuster is speaking to a public adjuster, the adjuster does have an obligation to speak to the public adjuster. In this situation, communication halts between the policyholder and the adjuster. The adjuster must now only communicate with the public adjuster—because the policyholder has given up the right to speak with the adjuster once they’ve hired the public adjuster.
In addition to this, the public adjuster accepts the proceeds being paid on the policy and, in turn, is responsible to pay the insured or for taking care of paying the contractor when the repairs are being made.
The adjuster does have an obligation to express what they are doing, what their thoughts are, and what they are going to submit to the carrier with the public adjuster.
The adjuster, however, is not required to agree with the public adjuster. They are also not required to meet what the public adjuster feels the requirement should be or what they feel the damages should be written as. However, there is an obligation to express how the adjuster will handle the file and how the damages will be submitted to the carrier.
People tend to get spooked about dealing with a roofer or more so a public adjuster because public adjusters tend to try to bully adjusters—IAs—into paying for things that shouldn’t be paid for.
IAs need to understand that they don’t have to agree with a public adjuster—in fact, if a public adjuster gets aggressive with you, you’re better off to go ahead and say ‘Okay, sure.’ And continue to document everything that the public adjuster wants you to document and just put it in the file whether you agree with it or not.
You don’t even have to tell the public adjuster that you disagree with him. You can say ‘I’m happy to document that for you, and I’ll include it in my report.’ When that’s done, you can then address in your report whether you think that the public adjuster was bringing forward solid stuff that should be addressed on the estimate.
If you do not agree with a public adjuster on-site, document what they are asking you to document; but when you submit your report to the carrier, put in your file note that you do not agree with them and why.
How a Public Adjuster is Paid
As mentioned before, a public adjuster is paid a percentage of the proceeds the policyholder receives from the claim. Because of this, some public adjusters may try to convince the adjuster that there is more damage than there actually is or increase the prices in order to receive more money.
If they do not try to raise the amount given to the policyholder, the public adjuster’s 20% comes out of the insured’s proceeds, and they have to pay the 20% out of pocket to get the repairs made.
This is not always the case though. There are legitimate public adjusters out there. And, in the world that we live in of insurance right now, the lack of quality adjusters has helped public adjusters be a little more honest and help them to be accurate in their scope of damages.
And—for the lack of better words—they still come out being the more honest guy because they found damages that were legitimate and should’ve been paid for that didn’t get paid. So the more adjusters can learn to be accurate and understand what they’re there to do, the less needed a public adjuster becomes.
As an IA, an adjuster is going to handle a public adjuster the same way he would handle a roofer. The only difference is that the adjuster is responsible and obligated to share information with the public adjuster and treat them as though they were the insured.
Whereas the roofer is an outside source, the public adjuster becomes the source—or representative of the policyholder.