When disaster strikes a homeowners association such as fire, flood, hail damage etc., and a claim needs to be filed, a public insurance adjuster is the association’s advocate and can usually save an association thousands of dollars and in some instances hundreds of thousands of dollars. A public insurance adjuster is an insurance claims adjuster who represents the association in appraising and negotiating the claim. A public adjuster principally appraises the damage claim, prepares an estimate and other claims documentation, reviews the insurance policy to determine coverage, and negotiates with the insurance company to maximize the association’s coverage.
Typically the board of directors retains a public adjuster to document and expedite their claims, obtain a more satisfactory claim recovery, more quickly, and restore the damaged property more promptly. Another huge benefit of utilizing a public adjuster is that the board of directors insulates themselves from negotiating an insurance claim in the event they are not proficient in the complicated claims process.
Legally, only a public adjuster, aside from attorneys and your insurance broker, can represent the rights of an insured during an insurance claim process. A public adjuster is most beneficial during an insurance claim when loss valuations or supplementary issues arise. A supplementary issue would be asbestos is discovered or building codes require additional modifications not in the original construction. Generally public adjusters charge a percentage of the settlement and generally can come from the insurance claim settlement.
- A public adjuster’s main responsibilities are to:
- Evaluate the insurance policies to determine what coverage may be applicable to a claim
- Research and confirm damage to buildings and contents and any supplementary expenses
- Determine values for settling the claim
- Prepare, document, and support the claim on behalf of the association they represent
- Negotiate a settlement with the insurance company on behalf of an association
- Re-open a claim and negotiate for more money if a discrepancy is found after the claim has been settled
Most public adjusters are paid based on a percentage of the total settlement. Fees range from 5% to 10% based on the type and amount of the claim. Some public adjusters charge a flat percentage, while others use a regressive scale such as 15% of the first $100,000, 10% between $100,000 and $200,000, etc. It is important to consider, regardless of the fee structure, that the fee is generally partially or totally offset by an increase in the settlement amount that is negotiated by the public adjuster.
A public adjuster is best retained as soon as possible after a claim occurs, and while it may not always be clear when a homeowner association may benefit from hiring a public adjuster, the most benefit is likely to be realized if they are engaged immediately in case of a loss. But in the vast majority of instances, a public adjuster can come to the assistance of a board of directors when issues arise that require an expert on the process.
It is important to consider that shortly after the insurance carrier receives notice of a loss, a claims adjuster representing the insurance company’s best interests will be dispatched. The claims adjuster will visit the association to gather facts about how the loss occurred, the magnitude of the loss, etc. During this initial investigative phase, incorrect, incomplete or inadequately expressed answers to the adjuster’s questions may reduce the amount that can be claimed. A public adjuster engaged early in the process will have more opportunity to help the homeowners association receive a fair claims settlement under the insurance policy. However, at any time during negotiations with the insurance company and even after a settlement has been received by an insured, a public adjuster may be able to negotiate for a higher amount to cover a supplementary issue that arises. WDPM