Public Adjuster Myths: 10 Debunked Myths About Public Adjusters

They can speed up claims, significantly increase claim settlements, and keep insurers honest.

We’ve discussed myths about homeowners insurance coverage. Today, we’re debunking some of the most common myths about public adjusters.

Myth #1: You Should Always Hire a Public Adjuster for Every Insurance Claim

Public adjusters help with many insurance claims. However, they’re not the right choice for all insurance claims.

As a general rule, public adjusters tend to work on claims where the disputed amount is over $10,000 – or on any claim where you have a disagreement with your insurance company over a substantial amount of money.

Because public adjusters get paid on contingency, they tend to focus on bigger claims. Public adjusters receive a pre-arranged portion of the final or adjusted settlement amount (typically 5% to 20%).

Public adjusters can help with many claims, but they’re not the right choice for all claims, including:

• Small claims
• Simple claims with no disputes
• Claims where the disputed amount is under $10,000

In all of these situations, you may not need a public adjuster.

Myth #2: Public Adjusters Are the Same as Insurance Attorneys

Public adjusters play a different role and have different qualifications than insurance attorneys.

In fairness, this myth can be confusing: in some states, insurance attorneys do play the role of public adjusters. Some public adjusters have gone to law school, completed the bar exam, and practice law in their state.

In most cases, however, public adjusters are not lawyers; instead, they’re insurance industry professionals who pass a completely different set of requirements to become licensed in their state.

Here are some of the differences between public adjusters and attorneys:

Public adjusters can:

• Research and evaluate your claim
• Analyze your insurance policy and apply coverage
• Prepare an estimate and document the loss for the policyholder
• Organize your claim from start to finish
• Negotiate with the insurance company to achieve an optimal settlement

Property insurance attorneys can:

• Represent the policyholder in court and provide legal counsel
• Take legal action against the insurance company

A public adjuster could help you decide if an insurance attorney is the right choice for your claim. In some cases, homeowners come out ahead when using both a public adjuster and an insurance attorney, allowing the two professionals to work in tandem.

Myth #3: Anyone Can Call Themselves a Public Adjuster

In most states, public adjusters must adhere to strict licensing regulations. Some require you to pass an exam, while others require you to maintain continuing education each year for your license to be active.

Most states prevent someone from calling themselves a public adjuster unless they’ve been licensed as a public adjuster. If someone legally calls themselves a public adjuster, it suggests they’ve passed strict requirements and are qualified to do their job.

To become a public adjuster in most states, you must fulfill requirements like:

• Pass a public adjuster licensing exam
• Complete continuing education credits each year
• Complete a background check by submitting fingerprints and other data
• Purchase a public adjuster surety bond
• Continue to pay annual license renewal fees

Myth #4: There’s Little Oversight in the Public Adjuster Industry

Different states have different public adjuster requirements. At a minimum, however, states require public adjusters to be fingerprinted and pass a background check to receive a public adjuster license.

Additionally, public adjusters convicted of a crime will generally have their license revoked (while also facing fines, jail time, and other punishments). Meanwhile, people who have committed certain felonies are not permitted to become public adjusters.

Each state has a department of insurance, and that department may oversee insurance companies, public adjusters, and other members of the insurance industry.

Myth #5: Public Adjusters Help You Receive More Money for Your Claim Than You Deserve

Public adjusters don’t help you commit insurance fraud. They won’t use illegal tactics to artificially inflate the size of your claim – like documenting you had hardwood floors instead of LVP floors.

Instead, public adjusters help you get a fair amount of money for your claim based on the losses you incurred and the terms of your insurance policy. It’s that simple.

Myth #6: Insurers Raise Rates or Cancel Coverage If You Use a Public Adjuster

Insurers love to spread this myth. Some homeowners mistakenly believe their insurer will cancel coverage or raise rates if they use a public adjuster.

In reality, insurance companies will raise rates after most homeowners insurance claims. The more severe the claim is, the greater the rise can be. However, this shouldn’t deter you from making a claim. A significant house fire could lead to a $100,000 claim and 20% higher insurance premiums, for example. You still come out ahead.

Myth #7: Public Adjusters & Insurance Adjusters Play the Same Role

There are two main types of “adjusters” in the insurance industry:

Insurance Company Adjusters: Also known simply as “adjusters,” insurance company adjusters are the professionals who arrive on-scene to initially assess the damage. They are generally salaried employees or independent contractors working for your insurance company and they represent your insurance company’s best interests.

Public Adjusters: Also known as public insurance adjusters or (confusingly) private adjusters, work for homeowners and business owners – not insurance companies. They’re licensed professionals who represent the property owner’s best interests.

Myth #8: Public Adjusters Are Too Expensive for the Average Homeowner

Public adjusters generally work on contingency. That means many of them don’t charge a dime until after the final settlement.

A public adjuster could charge a 5% to 20% fee on the final settlement amount, for example. Until you agree to a payout from your insurer, you don’t pay anything – similar to how a personal injury lawyer works.

Many public adjusters also provide no-cost consultations upfront. You can check if a public adjuster is right for you with zero risk.

Myth #9: Hiring a Public Adjuster Slows Down Your Claim

Insurers love policyholders who believe this myth!

When you hire a public adjuster, you’re getting a trusted insurance industry professional who can speed up your claim, increase payout, and ensure you receive the outcome you deserve from your claim.

Many insurers push for a speedy settlement: insurers may want you to accept the lowest possible amount and close the case as soon as possible to reduce liability.

A public adjuster’s job is to survey damage, apply your policy, and approach your insurer with a fair resolution – all while representing your best interests.

Myth #10: Public Adjusters Don’t Offer Free Consultations

Hiring a public adjuster could transform your claim.

To see how a public adjuster could help, schedule a no-cost consultation with ClaimsMate.

During a consultation, a ClaimsMate adjuster reviews your case, and then helps decide on the best path for your claim.

Stephanie Corona

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.