A customer recently asked us about their building which suffered significant damage in a hail storm. They were contacted by a public adjuster and wanted to know if they needed to hire a public adjuster to deal with the insurance company.
When you report a claim to your property insurer, the insurance company assigns a licensed claims adjuster to walk you through the process of evaluating and paying your claim. This person is either an employee of the insurance company or an independent contractor hired by and paid by the insurance company. In either case, it is his or her job to settle your claim promptly and fairly.
After a well-publicized weather event, such as a tornado or hail storm, local business owners are often contacted directly by a number of service providers, such as restoration contractors, roofers and public adjusters, who are seeking to lend their assistance. We urge you to not enter such contracts lightly.
With regard to restoration contractors and roofers, it has been our experience over the years that policyholders are generally more satisfied if they use local firms with a history of doing business in the local area. Once the work is done, local contractors are better suited to respond to the property owner if additional damage is discovered or the work needs to be re-done. Out-of-town contractors may be difficult to find.
A public adjuster is a licensed adjuster who acts as an intermediary between you and the insurance company to negotiate a settlement with the insurance company. A public adjuster is required by state law to execute a written contract with you before beginning work and must be compensated by collecting a fee from you, typically a percentage of the claim settlement. By law, the fee can’t be more than 10 percent of the amount paid by the insurance company to settle your claim.
Based on our observations after weather-related claims events in the past, we believe you will be well-served if you allow your insurance company the opportunity to fulfill their promise to you before you sign up with a public adjuster and sign away a percentage of your settlement. On a very small number of claims, it may be advantageous to hire a public adjuster later in the claim settlement process if you reach an impasse with your insurance company.
If you are contacted by a public adjuster, we urge you to contact us before signing a contract so we can discuss your concerns.
This article was prepared and made available to your agent by the Independent Insurance Agents of Texas, which is solely responsible for its content. Please read your insurance policy. If there is any conflict between the information in this article and the actual terms and conditions of your policy, the terms and conditions of your policy will apply. The Independent Insurance Agents of Texas is a non-profit association of more than 1,500 insurance agencies in Texas, dedicated to helping its members succeed, in part by providing technical resources that explain insurance policies sold to their customers.
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