Demand for Public Adjusters Surges as Insurers Deny More Claims

Demand for public adjusters is surging as more insurers deny claims.

According to a new report, the average insurer in the United States denies 37% of all insurance claims. Some of the biggest insurers – including Farmers and State Farm – deny 40% to 50% of all claims.

A growing number of homeowners are choosing to push back by hiring a public adjuster.

Public adjusters represent policyholders – not insurers – during the insurance claim. Homeowners hire public adjusters to overturn denied claims, increase payout, and speed up the claim process.

Insurers have raised premiums 10% per year, on average, over the last four years, to address rising risk. In addition to raising prices, insurers appear to be defending their bottom line by denying more claims.

Why Insurers Are Denying More Claims

One recent report found insurers were unjustly denying more claims.

Some of the factors identified in that report include:

• Rise in natural disaster severity and occurrence. Some insurers are pulling out of areas to reduce this risk. Others have stopped doing business entirely in states like California and Florida.
• Too many inexperienced insurance company adjusters. To address the rising number of claims, insurers have hired many new adjusters – including some with inadequate training. These adjusters may mean well, but they’re not always qualified to accurately analyze a claim.
• Declining profit margins. Inflation and increased natural disaster risk have reduced profit margins for insurers. Although the industry is slowly bouncing back, insurers may have denied more claims for years to defend their profit margins. One analyst even claimed Florida’s insurance company was “on the brink of a collapse” with homeowners at a “high risk” of not being paid for their claims.

Home Insurers Denied 50% More Claims in 2023

According to the National Association of Insurance Commissioners, as reported by the Los Angeles Times, home insurers denied 37% of all claims in 2023 – up from 25% two decades ago.

In other words, insurers are denying roughly 50% more claims than they did in the early 2000s.

Some insurers deny more claims than others.

According to a national survey by Weiss Ratings, Farmers denies around 50% of all insurance claims nationwide, for example, followed by USAA and Allstate:

• Farmers denies 50% of all insurance claims
• USAA and affiliates deny 50% of all insurance claims
• Allstate denies 46% of all insurance claims
• The average home insurance company in the United States denies 37% of all insurance claims

Things may be stabilizing in 2025. The insurance industry has raised premiums to catch up with higher risk and higher costs. However, the insurance industry continues to deny over one-third of all insurance claims nationwide.

Top 10 Reasons Why Insurers Deny Claims

According to a recent ClaimsMate analysis, the top 10 reasons insurers deny claims include:

1. Wear and tear / failure to maintain property
2. Taking too long to file a claim
3. Lack of evidence or documentation
4. Failure to pay premiums
5. Excluded damage
6. Failure to take preventative measures
7. Intentional damage
8. Failure to accurately disclose property information to the insurer
9. False statements or fraud
10. Policy cap

Why There’s a Growing Need for Public Adjusters

In many cases, insurers deny claims for good reason.

Maybe the homeowner failed to report the claim in an adequate amount of time. Or, maybe the damage occurred because of an excluded event – like flooding after a hurricane.

In some cases, however, insurers deny claims without good reason.

Insurers could argue there was pre-existing damage to an area outside of the scope of loss, for example, preventing you from receiving compensation.

Or, insurers could claim damage occurred because of flooding when, in reality, it occurred because of a burst pipe.

Some of the reasons public adjuster demand is surging include:

• Public adjusters could increase payout. One public adjuster firm recently reported increasing a client’s settlement from $200,000 to $750,000, for example, on a commercial property claim. The insurer had initially delayed the assessment and offered a settlement below repair costs. A public adjuster helped the client get a significantly higher payout.
• Public adjusters can overturn a denied claim. As mentioned above, insurers are denying roughly 50% more claims than they did in the early 2000s. The average insurer denies 37% of all insurance claims, with some insurers denying as much as 50% of all claims. Although some of these denials are legitimate, others may not be. Public adjusters can help overturn denied claims.
• Public adjusters can speed up claims. Some hire public adjusters to close a claim and receive a settlement more rapidly. After a natural disaster, you could be waiting over a year to return to your home. Insurers may struggle to process many claims in a small area in a short period of time. Public adjusters could help push your claim to the front of the line.
• Public adjusters can make a claim easier overall. Public adjusters take a load off homeowners’ shoulders. Some feel relaxed knowing they have an expert on their side. Others find they can focus on more important things while letting the experts handle the insurance claim.

When an insurer denies a legitimate claim, homeowners can fight back. With insurers denying a record number of claims, the demand for public adjusters is surging.