General Contractors vs. Public Adjusters: Who Should Help with Your Claim?
General contractors and public adjusters both play an important – but different – role in the insurance system.
General contractors rebuild your property based on a defined scope set by your insurer.
Public adjusters, meanwhile, oversee a claim from start to finish while representing the best interests of you, the policyholder.
There are some things public adjusters can’t do, but general contractors can – and vice versa. Confusing the two professionals, or thinking they’re interchangeable, could cost you a lot of money.
When should you rely on a general contractor? When do you need a public adjuster? Let’s find out.
What is a General Contractor?
A general contractor is a construction professional responsible for repairing and rebuilding your property after a loss.
Key roles played by the general contractor include:
- Managing construction projects (say, a roof replacement or structural repairs)
- Organizing, hiring, supervising, and managing subcontractors (like plumbers, electricians, and roofers)
- Ordering materials and scheduling work
- Ensuring the work aligns with modern building codes and inspection standards
- Communicating with the homeowner throughout the repair process
What is a Public Adjuster?
A public adjuster is a licensed insurance professional who works on behalf of policyholders – not insurance companies.
The role of a public adjuster is to:
- Inspect and document property damage thoroughly
- Review your insurance policy and apply coverage correctly
- Prepare and file claims with your insurance company
- Negotiate with the insurer for a fair settlement
Public adjusters handle the “claim” side of the insurance claim. They represent the policyholder’s best interests, then negotiate with the insurance company to ensure those best interests are met. They organize documentation, build your case, and give you the best possible chance of getting an optimal outcome for your claim.
Key Differences Between General Contractors and Public Adjusters
Both can be critical after property damage, but there are clear differences between general contractors and public adjusters:
General contractors…
- Focus on repairing property
- Get paid through construction contracts
- Oversee labor, materials, and building codes
- Work with insurers for repair estimates
- Are not licensed to adjust claims
Public adjusters…
- Focus on maximizing claim payout
- Get paid on contingency (percentage of claim increase)
- Oversee claim documentation, negotiation, and policy interpretation
- Negotiate directly with insurers on behalf of policyholders
- Are licensed and regulated by the state as insurance claim professionals
Where Confusion Arises
Many policyholders mistakenly assume a contractor can “handle their claim.”
Contractors can provide estimates, but they’re not legally authorized to negotiate insurance settlements.
In fact, in most states, it’s illegal for contractors to act as adjusters unless they also hold a public adjuster license.
Similarly, public adjusters don’t perform repairs. They may recommend trusted contractors and provide high-level guidance for managing the claim, but their focus is on your insurance settlement.
When to Call a Public Adjuster First
If your property has sustained significant damage, then contacting a public adjuster early can save headaches in the future.
Situations where a public adjuster may be particularly valuable include:
- Large and complex claims (say, a fire, major storm damage, or business interruption claim)
- Denied or underpaid claims
- Disputed damages, like when insurers blame “wear and tear” or maintenance
- Multiple types of damage, like damage to the roof, interior, or contents from one claim
- Overwhelmed, needing extra assistance, feeling taken advantage of by your insurer, or just wanting a trained professional on your side
When to Bring in a General Contractor
Once your claim is approved, or at least fairly negotiated, that’s when a general contractor shines.
At this point, the general contractor can step in to:
- Rebuild your property to code
- Manage construction timelines and subcontractors
- Provide the hands-on work needed to restore your property to pre-loss condition
- Communicate with you throughout the process
How a Typical Insurance Claim Works
In many cases, public adjusters and general contractors play different roles on the same large insurance claim, working together to ensure the claim gets completed:
A typical work flow might look something like:
- A public adjuster manages documentation related to your claim, then organizes the documentation and presents it to your insurer. Then, they negotiate with the insurer to ensure everything is covered according to the terms of your insurance policy, maximizing payout.
- Then, a general contractor uses that payout to perform quality repairs, restoring the property to pre-loss condition.
At the end of this process, the public adjuster receives a pre-arranged percentage of the extra value they added to the claim. Then, insurance covers the contractor’s work.
Why You May Need Both
In many cases, policyholders benefit from having both professionals on their side:
- A public adjuster ensures the claim is properly valued, representing the policyholder’s best interest and fighting back against insurance companies.
- A general contractor ensures the repairs meet code and restore the property to pre-loss condition efficiently.
Without a public adjuster, you risk receiving a low settlement that won’t cover the full cost of making you whole again. Without a general contractor, you risk shoddy work and project delays – even if the settlement is fair.
A Real-World Example of Public Adjusters & Contractors in Action
Let’s say a Los Angeles homeowner’s roof and interior are damaged by a wildfire:
- The insurance company’s adjuster estimates $15,000 in roof and interior repairs.
- A public adjuster documents hidden water damage, code upgrades, and roof replacement needs, raising the value of the claim to $42,000.
- With proper funds secured, a general contractor rebuilds the roof and interiors to code, restoring the property’s value.
Without the public adjuster, the homeowner may have accepted the $15,000 offer, unaware they were leaving significant money on the table. Without the general contractor, even the higher settlement could have been wasted on poor workmanship.
How They Get Paid
General contractors and public adjusters get paid in different ways:
General contractors are paid via a construction contract, usually as part of a fixed bid or cost-plus arrangement.
Public adjusters work on contingency, typically charging a fee of 5% to 20% of the settlement increase. Policyholders pay nothing upfront, and public adjusters only get paid when they win more money for the claim.
Hiring a public adjuster often pays for itself: public adjusters typically only charge a fee on the extra value they bring to a claim. You win, your public adjuster gets compensated for their work, and your insurance company is held accountable.
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Common Misconceptions About Public Adjusters & General Contractors
It’s easy to get these two professionals confused. Common misconceptions include:
“My contractor can deal with the insurance company for me.” False. Contractors can provide estimates, but they can’t legally adjust or negotiate your claim.
“Public adjusters slow down the claim process.” False. While it may take longer to document everything properly, public adjusters often lead to a faster and higher payout overall.
“I only need one or the other.” Not true. Public adjusters and general contractors often work best together. The public adjuster maximizes payout and ensures everything is covered, then the general contractor uses those funds to restore your property to pre-loss condition.
Final Word: Who Works Best for Your Claim?
This isn’t a “general contractor vs. public adjuster” zero-sum situation. Instead, it’s about understanding their unique roles:
Call a public adjuster if you want to maximize your insurance settlement, avoid underpayment, or resolve disputes with your insurer.
Call a general contractor when it’s time to rebuild your property and you need quality construction management.
If your insurer is denying, delaying, or underpaying your claim, contact ClaimsMate for expert assistance. Our licensed public adjusters can step in at any part of the claim, helping to ensure you have the resources to hire the right contractor and fully recover after a loss.
Stephanie is a property insurance claim expert with over 20 years of experience working as an insurance adjuster, expert witness, appraiser and umpire. She is passionate about sharing her expertise, knowledge, tips and training to help both property owners and Public Adjusters in their pursuit of effectively managing claims and recovering the claim settlement they deserve after a loss.
