Headline:  What the heck is a Public Adjuster

Date: 2/2/2021

Body :  Do you know what a Public Adjuster is?  Is it:

  1.  A low-cost chiropractor?
  2.  A really gung-ho personal trainer?
  3.  A financial professional?

If you chose #3, you are right.  I had heard of all kinds of financial professionals, bearing the entire alphabet after their surname.  But, I had never heard of a Public Adjuster.   I would wager that many of you haven’t either.  I was reading an article in the Penny Hoarder, and I was intrigued. What is a Public Adjuster? An Insurance Function Explained (thepennyhoarder.com)

What is a Public Adjuster?

A Public Adjuster is one of these “hired guns.”  But, instead of working as a consultant for the insurance company, they instead work for the claimant.   (Think of a CPA.)   Per one professional:

“We act as an advocate for the policyholder,” says Jodie Papa, president of the National Association of Public Insurance Adjusters. “We represent them to make sure the insurance company is paying the claim properly and fairly.”

 What does an Insurance Adjuster do?

An insurance claims adjuster has 2 important questions that they must answer:

  1.  They have to define if the insurance company has a responsibility to pay.
  2. If they determine that there is a responsibility, they compute the amount that the claim is worth.

In essence, the adjuster has the responsibility to assemble a case.   To do this, they interview witnesses, read the contract underlying the policy, communicate with legal counsel, and negotiate a settlement.  Often, they are employed by an insurance company, and sometimes if a particular expertise is needed, these companies will hire one as a consultant.   However, sometimes, it is helpful for the claimant to obtain the opinion of their own “hired gun.”   This is where Public Adjusters come into the picture.

Why would one hire a Public Adjuster?

Imagine that you live in Ocean City, MD.  You have a beautiful home, and all of a sudden, there is a hurricane event. Your beautiful home is reduced to a pile of cement block and broken glass. A disaster all the way around. And then fighting for insurance money is the next battle.

Under the insurance policy, it is the responsibility of the insured to prove their damages to the insurance company, and that is what a public adjuster assists with,” Papa explains. The adjuster prepares estimates, assists with preparing information for additional living expenses, tallies business losses and more, Papa says.

A public adjuster can help with the claims process and paperwork as well as explain complicated items and stipulations. They cannot get more money from an insurance company than the policy allows, but often can get more than an insurance company initially offers.

Usually, the fees are more than recovered in the process,” Papa says. She cites an example of a recent claim where the insurance company offered her client $17,000 to settle and they ended up settling for $67,000, making her 10% fee worth paying for the client. “That’s just the amount of value and knowledge and looking outside of the box and explaining. There’s a lot of things that the insurance companies don’t volunteer to the insured.”

Using a public adjuster can make things easier, but in the end, it cuts into the amount you end up with since the public adjuster gets paid a percentage of the settlement. That means less money for repairs — so before hiring a public adjuster, make sure you figure out how much you will need to make the necessary repairs.

If you hire a public adjuster, you need to make sure it’s a good fit for you and for your claim.

Papa has some advice for people looking to hire a public adjuster:

  • Check licenses: Public adjusters usually need to be licensed in the state where the loss occurred. Every state has different requirements and some do not require licenses at all.
  • Ask around: Get recommendations from others and check with your state’s insurance department.
  • Research firms: If the person you are looking at does not have a website or recommendations, they might not be reputable. Some firms have in-house estimators, forensic accountants, engineers and architects on staff.
  • Know your rights: Some state insurance regulations set a maximum percentage a public adjuster can charge.
  • Interview: Talking with the person you’re hiring to represent you can help you feel if it is a good fit for the best service and price.
  • Limit time: If the contract isn’t settled to your satisfaction during a set period of time, you can walk away without owing the public adjuster anything.
  • Look for associations: Public adjusters can be members of national or state associations which set standards for the profession.
  • Certifications: There are two main certifications for public adjusters: The Certified Professional Public Insurance Adjuster must have been working in the field for at least five years and pass a series of exams. The Senior Professional Public Adjusters must have been working in the field for at least 10 years and pass exams.

Papa advises to be on the lookout for anyone who pressures you into signing a contract. After a disaster, some public adjusters will go door-to-door trying to pressure homeowners into becoming clients, making people think using a public adjuster is the only way to get money from an insurance company.

Other red flags if the adjuster:

  • Asks for a deposit or a fee up front. Public adjusters should only get paid when you get paid.
  • Makes promises about the amount of your claim before looking at your loss or your policy.
  • Licensed just after a disaster. States often relax requirements after a catastrophic event and people enter the field to make a quick buck off of other people’s suffering.
  • Solicits business by going door-to-door after a disaster or shows up at your door after a fire.
  • Doesn’t return phone calls, emails or texts.
  • Requests a large percentage of the claim, usually more than 15%.
  • Pushes you toward certain contractors or repair companies.
  • Asks you to fake receipts or estimates in order to inflate claims.
  • Asks for bank accounts and other personal information.

Before hiring a public adjuster, think about how much of your settlement you are willing to give up in exchange for a potentially larger settlement. If you decide to go it alone, Papa recommends at least reaching out to a public adjuster for some advice.

Sometimes just when you report a loss, you could be reporting the claim improperly and you don’t realize it,” she says. “So you want to give a public adjuster a call. They can at least offer some free advice that can assist you.”


Bureau of Labor Statistics (bls.gov)

What Does an Insurance Adjuster Do? | Nolo

Insurance Claims Adjuster Job Description: Salary & More (thebalancecareers.com)

Public Adjusters Help You Nail Homeowners Insurance Claims – Forbes Advisor

Editor’s Note: Please note that the information contained herein is meant only for general education: This should not be construed as Tax Advice.   Personal attributes could make a material difference in the advice given, so, before taking action, please consult your tax advisor or CPA.

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