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What you need to know about public insurance adjusters

Home insurance claims for hurricanes, floods, fires and other disasters can be filled with red tape and headaches. That's why some homeowners hire public insurance adjusters to help cut through that red tape and alleviate those headaches.

But while you may not know a lot about the insurance claims process, you may not know much about what a public insurance adjuster does, either.

What is a public insurance adjuster?

A public adjuster works for you, not the insurance company. Your home insurer pays its own adjusters -- either in-house or independent -- to figure out how much the insurance company should pay for your loss. The insurance company offers its adjusters at no cost to you.

public insurance adjusters Michael McManigal, owner of Florida Loss Public Adjusters Inc., says a public adjuster will file your claim with the home insurance company, prepare a written repair estimate and negotiate with the insurer's adjuster on a claim payout.

“A public adjuster levels the playing field and acts as the insured’s representative in connection with the processing of the claim,” says Nicole Vinson, an insurance attorneywith Merlin Law Group in Tampa, Fla.

What kinds of disaster losses do public insurance adjusters handle?

Public adjusters tackle property damage stemming from hurricanes, wind, fire, smoke, floods, earthquakes, theft, vandalism, sinkholes and other perils.

“The insurance adjuster has usually handled thousands of individual losses and isn’t intimidated by an insurance company,” says Keith Hayman, a public adjuster and catastrophe coordinator at Adjusters International in New York.

When can a public insurance adjuster contact me?

Rules about this differ from state to state. In New York, for instance, public adjusters can’t solicit your business between 6 p.m. and 8 a.m.

When should I hire a public insurance adjuster?

Hayman says you should consider hiring a public adjuster if your property sustains a loss that appears to be valued at more than $10,000.

If the claim amount is close to your deductible, you probably shouldn't use a public adjuster, Hayman says. In that situation, “it might be best not to even place a claim to prevent your rates from increasing,” he says.

McManigal says any claim that has two or more elements (like floor and drywall damage) is well-suited for a public adjuster.“If a claim is only for the roof, a homeowner can usually negotiate that claim,” he says.

The best time to bring in a public adjuster is before you call your home insurance company, McManigal says. “This way, you have representation from the very beginning,” he says.

You can bring in a public adjuster after you’ve started the claim-filing process, but McManigal says that might cost you more. "Usually, the fee is a bit higher," he says, "because it is a bit harder to get the insurance company to pay after they have already dug their feet in the ground and settled on a number or once work already started."

John Huff, director of the Missouri Department of Insurance, has a different take on this.

Huff says that if a consumer reaches an impasse with a home insurance company on resolving a claim, hiring a public adjuster may be an option. However, Huff says, consumers should first work on their own with their insurers to settle claims.

The services of a public adjuster "can be valuable at times, but in many cases, consumers will be just as successful working directly with their insurance company, and they won't have to pay a fee," Huff says.

How much does a public insurance adjuster charge?

A public adjuster is paid by the policyholder once the insurance company has paid a claim. The fee normally ranges from 10 percent to 15 percent of your claim payout; the percentage usually is capped by state insurance regulators. Hayman says the fee may be negotiated higher or lower, depending on the size of the claim.

Sometimes after a disaster, your state insurance department sets the percentage that public adjusters may charge, according to the Insurance Information Institute.

A public adjuster's fee is not covered by your homeowner's insurance policy.

Where can I find a good public insurance adjuster?

In most states, public insurance adjusters are licensed and regulated. To find a reputable public adjuster, contact the National Association of Public Insurance Adjusters for a list of adjusters in your state. Also, call your state insurance department to check out an adjuster's qualifications (or the insurance department in the state where an adjuster is from).

The Insurance Information Institute suggests asking your insurance agent, your lawyer, your friends and your co-workers for names of public adjusters they would recommend.

The Coalition Against Insurance Fraud points out that most public adjusters are honest and competent. However, some crooked adjusters prey on disaster victims, going door-to-door to try to bilk homeowners. Among the schemes that shady adjusters employ are charging a large fee, then vanishing without handling your claim; referring your repair to a dishonest contractor for a kickback; and filing false or inflated claims.

Can I cancel my contract with a public insurance adjuster?

In most cases, you can cancel a contract with a public adjuster; the agreement should spell out the adjuster's fees. However, the amount of time you have to cancel a contract varies by state. In Maryland and New York, for example, you can cancel a contract with a public adjuster within three business days of it being signed.

What if I'm having trouble with my public insurance adjuster?

Experts advise you to contact your state insurance department if you have a complaint about your adjuster. The National Association of Insurance Commissioners website lists contact information for every state insurance department.

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