A public adjuster is sometimes referred to by people outside of the industry as a private adjuster. NYS uses the term “public adjuster” because such individuals are required to be licensed by the NYS Department of Financial Services to represent the public concerning property damage claims.
Adjusters who represent insurance companies can be either staff adjusters or independent adjusters. Independent adjusters are sub-contractors for the insurance company who may not have any adjusting staff or not enough staff. Staff adjusters are employees of an insurance company. Insurance companies always use some kind of an adjuster to process claims.
The staff/independent adjusters look out for and protect the interests of the insurance company while handling their claims. These interests are usually not consistent with the interests of a policy holder. The adjusters for the insurance company read the policy and interpret it in the manner that is most favorable to the insurance company. They also conduct themselves in the same fashion when evaluating the damages. The insurance companies are large corporations with shareholders or investors. Their biggest concern is their bottom line. They desire to make a profit and profit as much as possible. Therefore, it makes sense from that standpoint that they would want to pay as little as possible for a claim that is covered under a policy. Sometimes they even deny claims that should be paid.
On the other hand exists public adjusters. The duty of a public adjuster is to protect the interest of the policyholder who they represent concerning a property damage claim, claim for business interruption, extra expense, or loss of use. The damages can be the result of water, fire, flood, hail, smoke, wind, mold, snow or ice, puff-backs, theft, lightning, theft or vandalism and vehicle as well as other types of damages depending on the type of applicable policy.
The job of a public adjuster is to make sure the insurance company pays a fair price and pays for everything that is covered under the insurance policy. The job of a public adjuster (a.k.a. P.A.) is to evaluate the cause of the damage, read and interpret the policy, assess the damages and compile documents to support the claim. They then present the claim documents to the insurance company and negotiate the amount of covered damages. Their main function is to protect your interests and get you paid as much as possible for your claim within the confines of the insurance policy.
In NYS, only licensed public adjusters and attorneys can represent a private party in an insurance claim involving property damage. Public Adjusters handle claims involving water damage, fire damage, smoke damage, wind damage, hail damage, hurricane & tornado damage, mold damage, flood damage, lightning damage, vandalism & theft damage and vehicle damage to property. Contractors are not allowed to represent an insured. Attorneys, while very well versed in the law, may not be equipped enough to handle damage assessment or navigate the claims process. They may deal in many areas of law but have no experience with insurance law. In addition, legal fees will likely cost much more than that of a public adjuster. For this reason they should only be used as a last resort. Public Adjusters are not lawyers and cannot give legal advice. However, public adjusters are required by law to attend rigorous classroom training and take a state exam that they must pass in order to become licensed. In addition, they must post a bond and take continuing education classes on an on-going basis. Most competent public adjusters will have Errors & Omissions (E&O) insurance that is also sometimes called professional liability insurance. E&O insurance provides an extra layer of assurance for the policy holder in the event that a public adjuster overlooks something or does something that they should not have. By law, public adjusters cannot charge you more than 12.5% of what you collect. Once you sign an agreement with a public adjuster, you have 72 hours to cancel the agreement. By law, the fee and the cancellation rights must be listed on the compensation agreement. Public adjusters, by law, can only try to solicit your business from 8am to 6pm.