PA vs Company Adjuster

Public Adjusters (PAs) Represent the Policyholder. Company or Independent Adjusters Represent the Insurance Company.

Immediately after you’ve had a fire, flood, or catastrophic storm damage to your home or business, there are a few people who will most likely come looking for you. Local public adjusters may pitch their services. Restoration companies and other local contractors may offer free board-up to your damaged property with the hope that you’ll hire them later to make necessary repairs. After local officials have eliminated the immediate threat, there may be significant damage to repair. At this juncture, the home or business owner must make some critical decisions.

The critical difference between a PA and a company adjuster: one represents your interests, the others won’t.

When you make the call to report your loss to your insurance company, the customer service representative might mention an “adjuster” they will send to assist with your claim. This “adjuster” is a “claims adjuster” or “independent adjuster” either staffed or contracted and paid by your insurance company. Most importantly, policyholders need to understand that part of this adjuster’s job is to minimize claim cost to the insurance company and that this adjuster ultimately represents the interests of the carrier.

The Bottom Line

Your insurance company will inform you that the claims adjuster comes at no additional expense. On the contrary, a public adjuster will cost you about 10 percent of the total value of your claim. Here’s what you must decide quickly: Can I afford to pass on the chance for experienced representation for my interests when it comes to settling this claim? If you have a small loss, it may be wise to handle the claim yourself. However, if your damages exceed $10,000 or if you expect any difficulty from your insurance company, it may be to your advantage to hire a PA. A simple rule regarding insurance claims: more expensive and complicated property losses increase a policyholder’s need and benefit of hiring a public adjuster.

Different Types of Adjusters

Sometimes the terminology can be confusing when people start referring to insurance adjusters. For example, all public adjusters are property claims adjusters, but all property insurance claims adjusters are not necessarily public adjusters. 

Property Adjusters

Property claims adjusters handle property such as homes, condominiums, apartments, factories, retail businesses, farms, garages, and other structures. Public adjusters or PAs are property claims adjusters, and in some states, they must have a license to serve the public. Other claims adjusters are either independently contracted (typically by an insurance company) or are employed full-time by an insurance carrier. Public adjusters are the only adjusters who can negotiate a settlement with an insurance company on behalf of a policyholder. Learn more about the responsibilities and services of a public adjuster on our homepage.

Automobile Adjusters

If you’ve ever had a car accident, then you’ve probably met an auto adjuster. Insurance companies train these adjusters to process vehicle claims of all kinds. Auto adjusters know everything from the rules of the road to the parts required to repair cars and trucks covered by many different types of insurance policies. These adjusters typically handle several claims in one day.

Marine Adjusters

Marine adjusters handle all types of insurance claims related to boats and insurable property used on the water. Similar to the way auto adjusters work to service claims with vehicles, marine adjusters focus on handling all aspects of losses related to boats and related insurance coverage.

Medical Adjusters

Medical adjusters handle medical claims. These adjusters are familiar with medical procedures, coverage, and billing. Insurance companies usually hire medical adjusters who have a bachelor’s degree in a related field, and some states require medical adjusters to be licensed.

Bodily Injury or Casualty Adjusters

These adjusters handle claims that involve injuries and liability issues. Casualty adjusters negotiate with injured parties or attorneys to settle claims on behalf of insurance companies. These adjusters typically process fewer claims than auto or marine adjusters. However, casualty adjusters usually handle claims of much higher dollar value because of the higher potential expense of liability coverage.

“I’ve heard some people say public adjusters aren’t worth it. What are the facts and statistics?”

If a government study in Florida is any indication of public adjusters in similarly regulated states, the facts may prove otherwise.

An analysis of public adjusters in 2010 by Florida’s Office of Program Policy Analysis & Government Accountability revealed the following facts:

  • Despite a growing number of public adjusters over recent years, complaints about public adjusters remain relatively low.
  • Claims with policyholders represented by public adjusters took longer to close (generally 3 to 10 months longer) than those without a PA). However, policyholders with public adjuster representation typically received higher settlements than those without a with the assistance of a PA. In 2008, the Florida government study showed that the typical payment to a policyholder represented by a public adjuster was $22,266. In contrast, policyholders who did not use a public adjuster received average settlements of $18,659. And remarkably, in 2009, the difference between the two groups was more significant: public adjuster claims resulted in payments that were 747% higher.

For more details, see the entire report January 2010 report by the Florida legislature’s Office of Program Policy Analysis & Government Accountability.

“I’ve decided I need a public adjuster, how do I pick a good one?”

Your public adjuster is just like anyone else you want working on your behalf: you need credibility, experience, and someone to closely monitor potentially costly details. You must be able to communicate well with your public adjuster so that he or she can be the best advocate for you. Your PA needs to be able to keep the claims process moving forward without cutting corners at the expense of the policyholder. Here in Connecticut, laws clearly define some dos and don’ts for public adjusters. Many other states have similar laws. If you get the feeling that any particular public adjuster has a problem with following these guidelines, move on to the next public adjuster:

  1. Public adjusters are not allowed to solicit you as a customer if you have already hired or contracted with another public adjuster.
  2. Public adjusters are not allowed to have any interests whatsoever in any construction, salvage, or appraisal business.
  3. Public adjusters are not allowed to represent both an insurer and the insured at the same time.
  4. Public adjusters are not allowed to solicit customers between 8 pm, and 8 am.
  5. Public adjusters are not allowed to pay anything of value to any person as an inducement to refer business.
  6. Public adjusters are not allowed to share our fee except with another licensed public adjuster.
  7. Public adjusters are not allowed to advise you on any question of law.
  8. Public adjusters are not allowed to advance any monies to you before the settlement of the loss where such amount would be included in the final settlement.
  9. Public adjusters are not allowed to make false statements about an insurance company or its representatives.

Again, these guidelines are laws for public adjusters here in Connecticut. You should check applicable laws wherever you live. You can usually find such regulations on your state’s Department of Insurance website. Just remember that it is generally advisable to avoid doing business with anyone who resorts to high-pressure sales tactics. Anyone who can’t adhere to the above guidelines is most likely not the kind of person you want representing your interests.