What is a Public Adjuster

What is a Public Adjuster

What is a Public Adjuster?


George N. Skidis, Jr.

President and Founder of Illinois REIA

You had a fire! Things are not looking good for your claim settlement. What are your options?

  1. Settle for less
  2. Develop an ulcer
  3. Hire an attorney.
  4. Request “Appraisal” of the Loss
  5. Hire a Public Adjuster
  6. Hire a Company Adjuster
  7. Hire an Independent Adjuster

Over this series of three articles we will discuss options 3, 4 and 5. If you settle for option 1 or 2 the problem is yours. Options 6 and 7 are not even options at all as I will explain.

There are three types of insurance claims adjusters: Independent, Company and Public. Each serves a vital role in the claims handling process. Most adjusters are honest and hardworking men and women who will try and do their best. Once in a while you run into an adjuster who is a total problem for you and every other person they have contact with. We will call him “Pete”.

Company Adjusters: These are employees of your insurance company. The drive a company car, wear shirts with the company logo, receive a company check and are somewhere along their career path. Most new hires don’t last. This is a tough job and not for everybody. They get raked over the coals by both upper management and the clients they deal with.

Here is my example. Early in my adjusting career I was on “Storm Duty” helping settle flood claims in the Northwest Chicago area. On one particular claim I was out of my element. This family had money and I wasn’t sure how to behave in a million dollar home back then. After looking around for some common ground to break the ice I had nothing. On the walls were law degrees from Yale and Harvard. The furniture was too expensive to look at let alone sit upon. I was desperate to find something in common with my new client and failing terribly. We walked down into the basement to see the damages and there were rows and rows of bookshelves from floor to ceiling.  Fate granted me a reprieve. On the shelf was a Spanish textbook ”Que mi Quenta” that I had used in college to learn to speak Spanish. My mouth opened and I told my client about this book. His response, “Really, my wife wrote that”. The ice was broken and we got along fine. He even wrote a letter to my divisional claim superintendent telling them what a great young man I was and he would love to hire me if I ever left Mother Mutual. This caused an internal investigation into my ethical behavior to see if I overP.A.id the claim. Imagine their surprise when I settled the entire claim for only $925.00 even. Company adjusters get raked on both sides of the grill. Cut them a break and be polite.

Company adjusters are paid either by the hour or salary. They don’t get a bonus for ripping you off. Their check doesn’t change until their next salary review. Do you think they get the best raise for overpaying claims?

Independent Adjusters: These are sub contractors that handle and settle claims for insurance companies. They might be independent, but the insurance company writes their check. Unless you run into “Pete” these guys and gals are usually pretty swell.

Independent Adjusters bill by the hour, mileage and expenses. They do not receive a bonus for the stress and savings they put you though. If they overpay claims the insurance company can hire some other independent adjusting company

Word to the wise: Treat every insurance adjuster politely; it is so rare for them it will help you settle you claim easier.

Second Word: If you are a confrontational type A personality, let your spouse meet with them or hire a P.A. immediately.

Public Adjusters: Also known as Public Insurance Adjusters and the initials P.A. These are individuals who are there to serve you the policy holder and help you achieve the greatest possible insurance settlement without lying or breaking the law.  Hiring a qualified P.A. can increase your claim settlement 5 to 40 percent sometimes more. The reason this happens is their knowledge and training when dealing with an insurance company.

Once you hire a P.A. the insurance company is supposed to deal with them and leave you alone. Unfortunately there are “Pete’s” in this world and they will try and get you to cancel your P.A.’s contract during the contract cancellation period. This can be 3 to 10 days and varies from state to state.

Most states require a P.A. to pass a test, become licensed and be bonded. Some states now require a P.A. to take continuing education as well. In Illinois the requirement is 24 hours every 2 years and must include 3 hours of classroom ethics instruction.

Many states do not allow a P.A. to solicit business between Dusk and Dawn. This is interesting because it seems the large losses always occur in the middle of the night.

P.A.s normally represent insured’s for property damage, involving damage to real estate or personal property. Their purpose is to represent the policy holder or “Insured”. They do not represent auto accident victims in liability claims as that would border on the practice of law.

What does a P.A. charge? A Public Insurance Adjuster charges a percentage of the claim settlement. The average is 10% but there are variations. In fact during Hurricane Katrina Louisiana required a published fee chart and does not allow a P.A. to charge a percentage.

How is the percentage calculated? The percentage charged by a P.A.  starts at dollar one of the claim. It doesn’t matter if you have already been offered $100,000.00 and the P.A. only got the claim up another $25,000.00 for you. Ten percent of $125,000.00 is $12,500.00 due right then and there. That is their fee. Think about it this way, The P.A. was actually handcuffed by your attempt to settle the claim yourself and had to single handedly undo everything you had agreed to.

When should you hire a P.A.?  Whenever you are out of your element it is always good to hire a specialist. However, getting a P.A. to help you on a $4,000.00 loss might be a little tough. Many P.A.s will not take on smaller claims because the work is very time consuming. Would you travel 6 hours spend two days in a hotel working out a settlement with the insurance company for a fee of $400.00? Neither will the P.A. unless you are a regular client. They especially won’t if they have to deal with a Pete!

Throughout my nearly 40 year adjusting career I have been an independent adjuster, company adjuster and then in 1994 I travelled over to the dark side and became a. PA. The Dark Side was more fun but even that was a lot of work. Sure glad I became a landlord and never had to argue with anybody ever again. Oh Wait!

The next article will cover the Insurance Appraisal Process and what it means to you.

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