A major piece of misinformation is sometimes fed to policyholders about public adjusters (PAs), and we want to address it. Almost invariably, it comes from insurance adjusters representing one of the major carriers. This supposed “advice” usually gets offered to a policyholder – whether a homeowner or the owner of a business – who has suffered a catastrophic property loss and is about to start the insurance claims process.
What is this misleading advice? Here’s what some insurance adjusters like to tell insureds: “If you hire a public adjuster, it will only slow down your insurance claim.”
Allow us to explain why this is WRONG. This kind of advice is like a District Attorney telling a criminal defendant they don’t need to hire a defense lawyer for their upcoming trial. Or you might compare it to a high-powered owner of a professional sports team advising a young star athlete they don’t need a sports agent to help negotiate their first contract. With a public adjuster in your corner, your claim is more likely to capture costs you might have missed – and if things go sideways, you will have someone on your team who knows exactly how to fix those problems.
As in the above examples, there is a power dynamic in play here. The insurance carrier owns the advantage in the claims process, and that’s how they like it. By hiring a PA, an insured evens this power imbalance. Also, the measure of a successful claim is not necessarily speed. In fact, a speedy process might end up short-changing you in an insurance claim. When property damage is severe, and policy limits are a potential issue, that is the time to slow down the process and examine your options.
In our work as PAs, we regularly see cases where the insurance company rushes to clean up a damaged house or office after an event such as a fire or a flood. The insurance company adjuster might reassure the property owner that it’s helpful to go in and immediately remove all their damaged furniture and personal belongings – even the fixtures.
Fast? Arguably, a little bit – at least in the moment and in a short-term analysis. Helpful to the policyholder’s claim? Absolutely NOT. In the overall scheme of the claim process, it will very likely slow things down – a lot. Let’s take a look at how the carrier’s focus on speeding up the claims process can: 1. Actually slow things down; and 2. Cost the insured on their eventual payout from the carrier.
When you have a property loss, the first thing you will need to do is mitigate further damage. Then you will want to do a complete inspection “take-off” of the building damage. The insurance company adjuster, seeking a “speedy” resolution, might hire a remediation team to strip out the fixtures in a “full gut” maneuver. That’s fast, right? It also (conveniently for the insurance company) removes all the evidence of the property owner’s valuable fixtures. All of those custom countertops, the hand-crafted trim, and the grass cloth wallpaper that was specially ordered by your interior designer? Gone.
The same danger exists regarding your personal property. The insurance adjuster will want to throw away your charred sofa – just speeding things along, after all. But wait: you purchased that sofa from a high-end decorator, and it was made with imported fabric. If you don’t get a scope and price agreement with the insurance company for this unique piece of furniture, you will recover only the value of a department store model. But, hey – at least it sped the claim along, right? Before the insurance carrier steps on the gas pedal, make sure you preserve the evidence and get quotes for EVERYTHING. Only then can you make informed decisions about what gets tossed in the dumpster.
Do you have enough insurance to pay a restoration company to “gut” the entire house and then rebuild? They might charge two to three times the amount another contractor will charge. That payment gets taken out of your coverage, which is a limited pool of funds. If a huge chunk gets gobbled up by remediation – or worse, to send old and unwanted clothing to the dry cleaners – it can’t be used in other aspects of the process. If there is ample insurance coverage under the building portion of the claim, it may make sense – at any cost – to allow the involved restoration company to do the necessary selective demolition work. A good public adjuster will help you prioritize the buckets of coverage you will use.
After your coverage runs out, you’re personally on the hook for related expenses. These are issues where you’ll want to get advice from your public adjuster as one wrong decision could be detrimental to the claim – and your wallet. A public adjuster can help you create a realistic timeline from the very start, and make sure you’re staying compliant with policy requirements and statutes along the way. A PA can even be helpful to a policyholder who is under-insured, as they will diligently comb through the policy to find any and all useful coverages therein.
Think about it this way: after a fender-bender, you don’t take the dents out of your car until you know how much money you’re getting. Whether it slows down the process or speeds it up, having a PA helps ensure you get the highest possible payout on your claim.