When you have a claim, an adjuster will help organize and quantify the payment of your claim. There are different kinds of adjusters though, and it pays to know the difference.
Once your claim is reported to the insurance company, they may assign their own staff adjusters. Carriers don’t have incentive programs for adjusters to pay less than what the contract calls for. They do of course have a supervisor or auditor making sure they are paying market rates, replacing only damaged items; in short, not overpaying. Their main job is to get contractors paid for repairing your loss and get you reimbursed for your personal property, so they can move on to the next case they’ve been assigned.
Some companies use independent adjusters. It is cheaper not to have payroll between storms when things are quiet, so carriers use independents instead of staff, or just when they need to. Independent adjusters are vetted by the insurance company to make sure they understand what's actually covered by your insurance policy, as well as the building and trades business. They make sure contractors hired to make the repairs are charging a fair market rate for the work done and they are paid a fee by the insurance company for this service.
After a big weather event with lots of claims, many companies will hire independents to take up the backlog, so a combination approach is common when it's busy.
Public adjusters serve a different function. They are paid by the customer via a fee calculated off the total amount of the claim. This is good in the sense that their incentive is to collect as much money as possible from the insurance company so you're on the same side of the table. But you should be cautious when using a public adjuster, too:
- A public adjuster's fee may run 5%-10% of the gross settlement depending on the claim. If your house sustains $50,000 in damage, 5% will cost you $2,500 and a 10% rate would be $5,000. It can get expensive.
- A commonly heard downside is the time it takes to get work done. Inevitably, with a public adjuster there is a lot of negotiation; their job is to push the envelope to get as high a dollar figure as possible to settle your claim. These negotiations inevitably take more time and work may stop with progress toward returning you to your home or car halted.
- If you are going to use a pubic adjuster, read the contract carefully before you sign, and never under undue pressure! Many PA contracts are exclusive to the job, meaning once you sign up they become your only advocate. Look for a cancellation provision: many contracts stipulate you can’t fire them until the job is done. If this is the case, there is no accountability mechanism for poor results.