Insurance Adjuster Shortages And How It Can Affect Your Insurance Claim
After a disaster, insurance adjusters are in high demand. This is great for insurance adjusters – but it can be bad for homeowners. Insurance adjuster shortages can lead to a number of undesirable side effects.
Over the last few years, we’ve seen a number of regions go through major disasters. After these disasters, all of these regions experienced a shortage in insurance adjusters. Hurricanes Irma and Harvey, for example, made headlines worldwide for causing a shortage of insurance adjusters in Texas and Florida.
As reported by Reuters, Texas and Florida have a total of 340,000 licensed adjusters. Many of these adjusters investigate claims on behalf of property insurers. Others may represent the policyholder while negotiating with the insurance company.
We’ve seen this problem in the past. After Hurricane Katrina in 2005, it took months for many property owners to receive payouts. There were simply too few adjusters with the expertise needed to handle a property claim. Now, we’re seeing similar problems after major disasters across the country.
How Does an Insurance Adjuster Shortage Affect your Claim?
A shortage of insurance adjusters can affect your claim in a number of different ways, including all of the following:
It Leads to a Surge of Unqualified Public Adjusters
You just lost your home to major flooding after a hurricane. You’ve tried to hire a public adjuster to manage your insurance claim, but you can’t find a qualified adjuster in your area.
Then, one day, you get a knock on your door. It’s a public adjuster who says he would be happy to handle your claim. You’re excited and immediately sign a contract.
Unfortunately, this isn’t always a good idea. After a major disaster, there’s often a surge of unqualified loss adjusters. These adjusters travel to disaster-stricken areas because they know they’ll get hired – even if they’re under qualified or not good at their jobs.
Ultimately, one of the most noticeable consequences of an insurance adjuster shortage is a surge in the number of unqualified – or even unregistered or uncertified – public adjusters.
Bad Adjusters Will Push for a Fast Settlement to Move Onto the Next Case
Another consequence of an insurance adjuster shortage can hurt you in your wallet. If there’s a big demand for public adjusters, then many adjusters – even the good ones – will be more motivated to quickly settle a deal with your insurance company before moving onto the next case.
Instead of fighting tooth and nail with your insurance company, for example, the public adjuster might be more inclined to accept a slightly lower offer. The adjuster gets paid regardless, and then he or she can move onto the next case.
Remember: public adjusters get paid when you accept your insurance company’s offer. At this point, they’ll earn a certain cut – say, 5% or 10% – of the final settlement.
The difference between a $4,000 and $5,000 payment might not be a big deal for a public adjuster. However, the difference between an $80,000 and $100,000 check from your insurance company is significant for many homeowners.
Insurance Companies Might Take Advantage of Policyholders
Insurance companies are well aware when there’s a shortage of adjusters. When there’s a shortage of insurance adjusters, insurance companies know policyholders are more vulnerable.
It’s in the insurance company’s best interests to settle a claim as quickly as possible while paying the lowest amount they’re legally required to pay. After a disaster, an insurance company might be dealing with tens of thousands of claims. Your insurer doesn’t want to get caught up on a single claim.
There’s also the financial side of things. Major disasters can cost insurance companies billions of dollars. Insurance companies have an extra motivation to reduce payouts during these times.
You Might Work with Inexperienced Adjusters
In times between disasters, public adjusters typically experience slow but steady demand. After a disaster, however, public adjusters see a sudden surge in demand.
That means the best public adjusters are snapped up immediately.
Next, the good public adjusters are hired. Then, the decent and average public adjusters get claimed.
By the time you’re ready to hire a public adjuster, all the good ones might be unavailable. You might be left with an inexperienced adjuster. That adjuster might not specialize in, say, flood damage claims. However, the adjuster knows that he or she can make a quick buck by representing homeowners in disaster-stricken communities.
If you’re hiring a public adjuster during a shortage – like after a natural disaster – then remember to check the adjuster’s qualifications and experience. Don’t be afraid to wait to hire the right public adjuster.
At the Very Least, Expect a Longer Claims Process
The situations listed above are serious issues. However, they can be avoided if you’re working with honest public adjusters and a good insurance company.
Even if you are working with an honest public adjuster and a good insurance company, however, you can expect a significantly longer claims process when there’s a shortage of adjusters available. Remember: your insurance company needs to hire independent adjusters too.
When there’s a shortage of insurance adjusters, it typically means a disaster has recently taken place.
We’ve seen adjuster shortages after hurricanes, floods, and other disasters, for example. After Hurricanes Harvey and Irma in 2017, residents of Texas and Florida were left scrambling to find qualified public adjusters.
To find a qualified public adjuster in your area – even during a shortage – request an estimate through ClaimsMate today. We’ll connect you with highly-qualified, certified, and experienced public adjusters based in your local area.