In most cases, the answer is a resounding yes. An exception is if the carrier has committed in writing to pay your claim in full to your satisfaction. As I will explain, when carefully considered, the reasons to have a competent, reputable professional in your corner as soon as possible far outweigh the reasons not to have one.
Some common hesitations for hiring a public adjuster early in the claims process are as follows:
- “The insurance adjuster will be adjusting the claim so why do I need my own adjuster”.
- “The carrier is going to pay something so why should I pay a public adjuster fee on money that I know I am going to receive”.
- “I want to wait and see what the insurance company does before hiring a public adjuster”.
- “My insurance carrier said a public adjuster was not necessary”.
We believe that a competent, professional, licensed public adjuster can be worth their weight in gold, even if they handle the claim from the beginning and charge a fee. The following is a laundry list of compelling reasons to hire a public adjuster early in the process. Though not exhaustive, these reasons are what I classify as critical.
Claim Documentation: Documentation from the beginning is crucial to ensuring a smooth claims process and prompt payment. Remember when you first arrived on the scene of your destroyed property. Debris was strewn everywhere, personal items and other contents were unaccounted for, water or soot had permeated the interior and your emotions were rampant. Thinking logically and taking steps to make sure you don’t spoil evidence for an insurance claim was the last thing on your mind. Photographing items and collecting strategic pieces of evidence were not the first things on your mind, but they should have been. Failure to properly document damage and inadvertently destroying evidence can be costly mistakes during a claim. Having a professional who knows what to look for collect details and photo-document the loss properly can make or break a claim. A quality public adjuster can not only document fully but also document with attention to items that support your claim based on your policy.
Policy & Coverage: A licensed public adjuster is trained in coverage issues and can read an insurance policy to determine what it actually covers and how much that coverage is. They can also point out the issues that are buried in your insurance policy that can affect how the claim presentation should be put together. It makes no sense to delay a claim in discussions over items that are not covered and likewise it would be a mistake for an insured to not claim coverages that are readily available to them under the policy. The insurance adjusters are not necessarily sent out to find items that fit your coverage. A public adjuster can disseminate what is covered, what is not and assemble a claims submission package in a fashion that meets the coverage requirements.
The Sailing Ship: There is an old cliché that says “that ship has already sailed.” The direction a claim takes from the beginning will set the tempo of how that claim proceeds and trigger all kinds of moving parts that are difficult to reverse once they have momentum. Once an insurance adjuster inspects, forms an opinion, writes those notes in the claims diary and reports to their superiors, that ship has just set sail. In order to move a claim along as efficiently as possible it’s best to have the ship pointed in the right direction when it leaves the harbor. It’s not impossible to re-direct the ship once it sails, but it is much more difficult than simply setting the right course up front. This is especially true when an independent catastrophe adjuster has a heavy work load and simply misses things because they are so busy and so overloaded. It never looks good for an independent adjuster to be called out for getting a claim wrong and using a Public Adjuster at the outset can help avoid this.
Loss Reserves: A reserve is the amount of money that an insurer sets aside when an insurance claim is filed and they make their initial determination of what they may owe on the claim. When an insurance claim is filed the adjuster dispatched by the insurance carrier suggests a reserve amount for the loss. Typically the insurer moves the reserve amount of money for the claim to a special account designated for paying losses. Most of the time that number is not disclosed to the policyholder because the carrier does not want to commit either way as far as amounts that may be due. The issue is when a claim is not assessed properly early on and the reserve amount is set lower than it should be. When the reserve is set low and the actual claim amount comes in much higher at a later date, red flags go up and the insurer begins searching for answers as to why the reserve was inaccurate. This results in delay, scrutiny and a slower claims process. Having a public adjuster work with the insurance adjuster to set a realistic reserve early on can make the claims process much more expeditious.
Proof of Loss: Almost every policy in existence today has a proof of loss form (POL) filing requirement. This one simple form can have dramatic consequences regarding how much you are paid on a claim, if you are paid on a claim and whether you could end up losing some rights if you fail to file this form or file it incorrectly. Policies will generally have different requirements for the filing of this form and different time lines required for filing. It is critical that you file this form timely, correctly and according to the requirements outlined in the policy. A trained and licensed public adjuster should be able to direct you to the terms in the policy that control the POL form, assist you in filling out the form and guide you on the time frames that you have to file the POL. (You are also encouraged to seek a legal opinion as to what the consequences of filing a POL could be and how it may affect your rights).
Presenting The Claim: What many policyholders are not aware of, is that in most cases the insured is responsible for documenting, proving damage and itemizing the claimed amount of the loss. This includes measuring the property, photographing the property, documenting damage, writing an estimate of damages and combining that data into a format that is acceptable to the insurer. Bear in mind that the insurance adjuster who is investigating the claim on behalf of the insurer, is accountable to and paid by the insurer. A claim that is presented properly from the beginning by a qualified public adjuster can shortcut a lot of red tape and place the insurance carrier in a position where they are hard pressed to delay prompt payment of the claim.
Hiring a Public Adjuster After the Initial Offer: Some policy holders choose to hire a public adjuster after the insurance companies first offer. This is a gamble. In today’s world, more often than not, claims are undervalued and underpaid on a regular basis. We have found that the deeper an insurer becomes in taking a defensive position, the more difficult it becomes to change the outcome. Policyholders who choose to wait and see how much the carrier offers can be in for a shock when the numbers come in and the short term savings of public adjuster fees on the initial payments often pale in comparison to the missed gains on the eventual claim settlement. In January of 2010 The Office of Program Policy Analysis & Government Accountability in The State of Florida released report #10-06 that studied public adjusting and the results of claims for consumers who utilized a public adjuster*.
OPPAGA report #10-06 stated as follows: “Policyholders with public adjuster representation typically received higher settlements than those without public adjusters”.
The report went on to state: “Policyholders that filed catastrophe claims in 2008 and 2009 generally received larger insurance settlements than policyholders that did not hire these persons.”….. “The difference in payments was larger for claims related to 2005 hurricanes, with public adjuster claims resulting in payments that were 747% higher.”
Our team members have been involved in adjusting and settling claims for more than twenty years. We have yet to see our involvement negatively affect the ultimate monetary recovery of an insured. While “wait and see” might be the right choice for some, we firmly believe that the OPPAGA study has merit and that having a professional on your side early in the process can truly be a policyholder’s best choice for the best eventual outcome.
Author: Clay Morrison
Morrison & Morrison, Inc.
*Source: Office of Program Policy Analysis & Government Accountability- January 2010 Report#10-06