By William J. Burns, S.P.P.A.

Anyone with commercial or residential property insurance has a powerful ally after suffering an insured loss such as fire, flood, water/wind damage, business interruption, earthquake, or burglary/theft — the public insurance adjuster. This little known professional who works as an advocate of the insured, not the insurance company, can usually help insureds recover much higher insurance settlements than insureds would otherwise recover on their own.

Three Kings of Adjusters

To understand public adjusting, you must know about the three different types of adjusters. Company adjusters work for a single insurer and adjust claims that company’s insured. Independent adjusters are licensed to represent only insurance companies which hire them on a project or freelance basis to adjust claims on their behalf. Both company and independent adjusters represent only the interests of the insurance company, not the claimant. Public adjusters represent only the insured.

In the distinct contrast, public adjusters are licensed by the State of California to represent only the policy holder. In California and typically elsewhere as well, public adjusters are treated as claimants. The most experienced public adjusters have earned the designation of Senior Professional Public Adsuperior level of competency and acceptance of a stringent professional code of ethics.

Public adjusters help insureds interpret policy language, and make sure that they comply with all the terms, conditions and obligations imposed upon them by insurance policies. This encompasses a great deal of valuable work and counsel.

Seven Crucial Steps in Adjusting Process

Reputable public adjusters execute a number of steps in the adjusting process:

1. Assess all the loss and damage.
2. Conduct and prepare physical inventories.
3. Determine the extent of loss of income and/or loss of use and how damage will affect future income or use.
4. Use accounting records or compute the inventory missing due to the loss.
5. Coordinate estimates of building repairs by determining with insurer the scope of loss and coordinate the contractors’ bids.
6. Package all of this in a form and fashion that insurance companies are accustomed to seeing, and submit that package to the insurer.
7. Negotiate on behalf of the insured with the insurer to arrive at an equitable settlement.

In exchange for performing these services, the public adjuster is compensated in the insurance settlement recovered. The percentage varies, usually depending on the size and complexity of the claim.

By getting involved at the beginning of a claim, public adjusters can help to eliminate or diminish any coverage or value (coinsurance) problems, and any other insurance related problems that can arise during the claims process.

Can Be Broker’s Ally, Not Adversary

It is also vital to emphasize that public adjusters are allies, not adversaries of insurance brokers. Public adjusters serve as valuable intermediaries between insurers and their insured. Brokers benefit when public adjusters represent their clients because the public adjuster’s knowledge of the claims process and insurance policy language helps to minimize conflict between the insured and the insurance company. This leads to a more satisfying claims experience for the Insured, and reflects well on the broker.