While negotiating an insurance claim is overwhelming, the learning curve can be closed by understanding common insurance vernacular, as well as potential roles of industry figures. Contrary to widely-held belief, there are other kinds of adjusters other than those who work solely for your insurance company. Today, we are looking at a kind of adjuster who, in theory, holds the potential to help your claim, but in reality, also holds the potential to hurt your wallet—public adjusters. The good news is that unlike in the case of independent adjusters, you are in full control when it comes to public adjusters’ involvement in your claim.
However, much like in the case of independent adjusters, the name “public adjuster” is also misleading. Public adjusters are not government employees awarded to those who can’t afford the private alternative of insurance, nor are they private insurance adjusters who perform pro bono work. Rather, they are private entities that you must hire to advocate for your claim, and ultimately, that you must pay. Traditionally, public adjusters have charged contingency fees. In other words, an adjuster would take a percentage from your insurance check. Over time, as the practice was executed through predatory means, lawmakers either put caps on these percentages, or decreed that public adjusters must find more conventional ways to get paid. In Louisiana, for example, public adjusters must charge hourly rates. Unfortunately, while contingency agreements at least incentivized public adjusters to maximize your claim, hourly rates only incentivize drawing out the process.
Still, Louisiana implemented a compulsory hourly rate for a reason. No stranger to natural disasters that lead to exponential growth in claim numbers, the state has seen predatory vendors of all kinds come out en masse to exploit homeowners’ misfortune. Public adjusters, too, engaged in forms of disaster profiteering, selling themselves as non-profits or government workers to gain enough of your trust to get you to agree to a marked-up service cost. While lawyers, too, have been accused of ambulance chasing and other exploitative practices, the reality is that lawyers are held to a standard of transparency that public adjusters are not. For example, the Bar reviews and approves legal advertising and the state mandates the use of clear and concise engagement contracts. Public adjusters have been historically known to show up at doorsteps with contracts that leave hourly rates to be filled in later. While the law has tried to crack down on solicitation, there is still a fraction of public adjusters who choose to take business chasing into their own hands.
That’s not to say that all public adjusters are predatory. But, even if you have found the most law-abiding public adjuster, it is important to keep in mind that ultimately, there is only so much that they can do for your claim. Public adjusters are great because unlike traditional insurance adjusters, they are truly experts when it comes to claim writing in relation to construction and infrastructure. They know how to describe losses in a way that accurately captures the full extent of the damage. Unfortunately, there is one field in which they are not experts—law. Ultimately, it is the law that will award damages when your insurer isn’t budging. Even if your insurance company is receiving a report noting extensive damage, they are likely not going to pay out accordingly in less someone literally makes them.
Not only do public adjusters lack a legal scope, they sometimes don’t have much of a scope at all. In some areas, laws dictate mandatory use of an independent adjuster, or have drastically cut back on what a public adjuster can do in order to decrease predatory behavior. If, after doing some research, you find that public adjusters are not a feasible option, consider using legal counsel to maximize your claim. If the worst-case scenario has already occurred and you have found that your claim has been negatively impacted by a public adjuster, lawyers can assist you with damages in that case as well. At Insurance Claim HQ, we have a history of suing predatory vendors of all kinds. Of course, it ideal to avoid being in that situation in the first place. While it is a great idea to consider hiring a personal advocate during a loss, be sure to choose carefully so that your number of potential lawsuits doesn’t rise.