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Public claims adjusters can level
the playing field for you

By Joe Frey

Your house has just been badly damaged by an earthquake: foundation cracking; wall collapsing; roof leaking. Many homes in your neighborhood have been hit just as hard and insurance company claims adjusters are becoming more prevalent than dog-walkers. You can't remember the last time you looked at your homeowners policy. Do you know what your entitled to?

Unfortunately, most people don't know the details of their policies because they are chock full of legalese. However, in the case of home or property damage (not auto-related), consumers can turn to public claims adjusters to decipher their policies and get them a fair settlement with their insurance company.

Public adjusters work for both individuals and businesses, but most cater to the individual policyholder. Jim Dilks, a public adjuster with Tri-State Public Adjusters, based in Bensalem, Pa., says that about 80 percent of his company's business comes from homeowners.

You should hire an adjuster if your lifestyle is significantly disrupted.

"Insureds don't need to hire an adjuster for a fire on the gas range and a little bit of smoke damage," says Stephen R. Figlin, president of TAG-The Adjusters Group, based in Philadelphia. However, you should hire an adjuster if your lifestyle is significantly disrupted. That is, when you can't handle finding new living arrangements, filing a claim, and arranging for a damage survey of your property, you should bring in a public adjuster.

Public adjusters have to follow the guidelines written in their state that say what they can and can't do. Adjusters aren't allowed to handle bodily injury claims, auto claims, or third-party claims (such as a trust or an estate). They also are obligated to give you timely service (states usually require a settlement within 10 to 15 days after liability has been established), make sure you're given a resonable offer from the insurance company, and disclose every part of the claims process to you.

Advantages of using a public adjuster

Public claims adjusters know the insurance process inside and out.

Public claims adjusters know the insurance process inside and out, so they can minimize the hassle that comes with collecting documents and evidence, and then negotiating with the insurance company. The adjuster will file all your pertinent paperwork with the insurance company, arrange for the inspections of your damaged property if needed, and then haggle with the insurance company if it refuses to pay your claim.

A good adjuster will also help control what you say to your insurance company. The adjuster will be forthright with your insurer, but won't divulge any information that might damage your case. Remember, the adjuster is your employee and will pursue your interests only.

Pay up

Expect to pay between 5 and 50 percent of your claim settlement to your public adjuster.

If you do decide to have a public claims adjuster help you out with your claim, expect them to take between 5 and 50 percent of your claim settlement. As the settlement amount goes up, the adjuster's cut generally goes down. For example, if you settle for $5,000, the adjuster might take 30 percent of that.

Adjusters' fees also depend on the nature of the claim and your marketplace. In Philadelphia, for example, a consumer will benefit from the competition among the 16 adjusting firms that operate in and around the city, and adjuster fees will be lower. However, in Montgomery County, Pa., where only four firms operate, you will probably pay more for your adjuster's service.

You'll have to sign a contract with your adjuster when you decide to hire him. You agree to give a portion of your settlement to your adjuster by signing the contract, but if you have second thoughts, you can terminate the agreement within 72 hours of signing.

You also have the right to sue your public adjuster if he doesn't perform his job correctly.

Experience is a prerequisite

Check certification
Before hiring an adjuster, it's a good idea to do a background check. Public adjusting is a word-of-mouth, business so find out who's worth hiring from people who've used an adjuster in the past. It's also a good idea to see whether the adjuster is licensed in your state.

To check on the licensing of a public claims adjuster, call your state's insurance department. In addition, you can contact one of the directors of the National Association of Public Insurance Adjusters (NAPIA) for more information about your claims adjuster. Contact information for NAPIA directors can be found at

Adjusters must be licensed by their state except in Louisiana, Kansas, Iowa, South Dakota, Tennessee, Virginia, North Dakota, and Nebraska. Certification comes from passing an exam and taking certification-update classes. The exams, according to Dilks, are very difficult. "The tests have extremely convoluted questions," he says. Each question, according to Dilks, could have more than one answer and only people with hands-on experience will know the answers.

"From experience, [good adjusters] can provide the information that the company is looking for the first time," says Dilks, who worked for MetLife as an adjuster for 10 years. This serves both the interests of the adjuster's client and the insurance company.

The industry also tries to police itself. "We try to look out for the occasional guy who's doing liability claims and calls himself a public adjuster," says Art Jansen, president of Jansen & Co., a public adjusting firm based in Houston. "Those guys are the ones who give reputable public adjusters a bad name, and if we catch one, we try to make him adhere to our code of ethics."

Do I need an adjuster's help?

In some cases, you don't need to solicit the services of a public adjuster. If you're familiar with your homeowners policy and with construction costs, you can probably maximize the settlement your insurance company gives you. However, homeowners policies are often difficult to navigate because of the legalese and various named and unnamed exclusions.

Depending on who you talk to, you may or may not need a public adjuster. One piece of advice is to seek a public adjuster's service right away. "It's difficult for adjusters to come aboard in the middle of a case," Dilks says. "[Negotiating your claim yourself] is like representing yourself in court," Dilks says. "You can do it successfully, but your chances for error are greater." Dilks says it's nearly impossible for consumers to know what they can expect from their insurer in a homeowners claim situation, even after they read their policies.

Industry officials advise consumers to wait for the company's first offer before deciding whether to hire an adjuster. "A lot of times a company's first offer is just that, a first offer," says John Eager, director of claims services at the National Association of Independent Insurers. "Insurers aren't inflexible to settling claims higher than the first offer."

"We feel public adjusters are an unnecessary cost to policyholders."

Insurers assert that their claims staffs are professionals who are going to make the claims process as easy for their policyholders as possible. Dave Hurst, a spokesperson for State Farm Insurance, says the company doesn't believe policyholders regularly need public adjusters and that it's questionable whether a policyholder comes out ahead in a settlement when the adjuster's fee is figured in.

"It's our goal to settle with the consumer rapidly and equitably," says Dennis Schain, a spokesperson for the Travelers. "We feel public adjusters are an unnecessary cost to policyholders."


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