By Ronald R. Reitz, CPA When and why should a property owner contact a Public Adjuster? You should consider contacting a Pubic Adjuster as soon as you suffer a loss. The insured has certain policy conditions that must be strictly adhered to. These conditions are detailed in the policy and they will vary by the type of policy i.e. commercial versus residential versus manuscript. You may start off at a disadvantage if you wait until your insurance company has begun the adjusting process and you may discover you have not met certain policy conditions or missed deadlines. I believe it is the insured’s responsibility to determine the value of their claim and it can be a cumbersome process gathering bids from various contractors while you are reading your insurance policy and trying to understand what it means. Insurance policies are very complex documents and are not very easy to understand, many of them have certain limits that increase or decrease depending on the total amount of your losses – and each coverage area can be different. Perhaps you simply do not have sufficient time to document and determine the full value of your claim. Some people try to handle the adjustment process on their own, and quickly learn there are not enough hours in the day to gather all information required to prove your claim. If you do experience a major disaster, it might be a good idea to immediately talk to a Public Adjuster to get a general overview of what your options might be. Remember, a Public Adjuster works for you, the policy holder, not the insurance company. A good Public Adjuster will help you successfully work through the highly stressful period following a loss. This usually is a difficult time for individuals and businesses, especially for someone who has never experienced a disaster or had to file a claim with their insurance company. A Public Adjuster can take those major headaches away and let you get back to your home life or running your business. A typical fire insurance policy contains exclusions that must be fully comprehended by the insured. Some policies also contain endorsements which provide additional coverages to the policy. Knowing what the exclusions mean and understanding the additional coverage given to the insured in their endorsements it is necessary to read, re-read and then be sure you completely understand what your policy says. Public Adjusters know the insurance business and are familiar with all procedures so they can work quickly to expedite payments. How to find a good Public Adjuster The best place to find a good public adjuster is through NAPIA (at www.napia.com). NAPIA can provide referrals for every state that licenses Public Adjusters. A Public Insurance Adjuster is the only type of adjuster qualified to represent the insured on a first party property claim. Currently more than 44 states plus the District of Columbia require an adjuster to hold this licensure in order to represent the insured. A professionally trained Public Insurance Adjuster will act as your advocate and help you to navigate the maze of settling the claim for the full amount due under the applicable policy. Remember insurance policies contain certain conditions that must be met before you can get paid: valuing the loss, presenting it to the insurer and negotiating a settlement. Because insurance policies are complicated and contain certain conditions, full payment on a loss is not automatic. A Public Adjuster can help determine your coverages and cause of the loss in order to present your claim and evaluate the carrier’s offer or denial. Determining the cause of the loss is a critical step in verifying coverage. What to Watch Out For – The Six Danger Signals After a disaster, fire victims often get besieged with inquires and offers from a plethora of general contractors and Public Adjusters and others offering to assist them. This is normal. Just because you are being solicited does not mean they are doing something wrong. However, you need to be careful and do your due diligence before signing up for their services. “It is not uncommon to meet up with a roving insurance adjuster following a disaster,” said Valerie Brown of RB United, a nonprofit community organization for San Diego area wildfire victims. “Make sure they are licensed by calling the California Department of Insurance Helpline at 1-800-927-HELP.” Valerie also recommended “You should not start any clean up or repair work until your insurance company inspects your property. Take lots of photos of the damage to your property before any work is done.” Here are a few danger signals 1. If they are not members of NAPIA, (National Association of Public Insurance Adjusters,) or of their state association of public insurance adjusters watch out. Public Adjusters that are members of professional associations are required to adhere to a professional Code of Conduct. 2. They make BIG promises without any guarantees. If a Public Adjuster guarantees you they will recover a certain percentage more than your insurer offers, beware. How can a Public Adjuster guarantee anything unless they have read your policy, determined the value of your claim and seen an offer from your insurer? 3. Their fees are outrageous. Most legitimate Public Insurance Adjusters fees range between 5% to 15% with an average of around 10%. Some Public Adjusters may charge higher fees on smaller claims or when hired midway through the claim process.If a Public Adjuster is hired to pursue the last few dollars of a claim, they will likely seek a larger percentage since they have a significant uphill battle to overcome. 4. If you feel pressured to make a quick decision, run. Legitimate Public Adjusters recognize that the decision to hire someone to represent you in order to get your home and life together is a momentous one. This is not a decision that should be made in haste. This could one of the most expensive decisions you make in your life. Take your time, ask for references and call the references. Perform your own research to see what their backgrounds are. 5. Check their web site and address. If they don’t have anything except a business card, be very wary. If their address is only a PO box, this is a red flag. 6. It is often better to hire someone who is local. Someone who knows the local building codes, construction costs and has access to the resources of the community and how best to leverage them. A locally-based Public Adjuster may also have prior experience working with representatives of the major insurance companies in the area and may be able to cut through a lot of the red tape and bureaucracy in order to make sure you get what is owed to you quicker. How to Make Sure You Hire the Right PA? Once again, make sure they are members of NAPIA and hold professional designations. Take your time and do several in-person interviews and request at least five references for each. It may be difficult and intimidating but you need to actually call the references and find out what their situation was. Have your questions prepared before you call. Are they responsive to your questions and seem genuinely concerned. If you hire a Public Adjuster, do so in writing and understand their fees before signing.” VIDEO LINKS When Should Use a Public Adjuster and When Should You Use an Attorney? What to do after you experience a disaster? Your home burns down, your home gets flooded. Who do you call? By Janis Rasmussen, RB United Outreach Coordinator www.rbunited.com What does a Public Adjuster do? Do you need a Public Adjuster? How to find a good Public Adjuster? By Janis Rasmussen, RB United Outreach Coordinator www.rbunited.com Why do you need a Public Adjuster after Your Home Burns Down? What to Do After Your house Burns Down? In 2007, this fire victim in Poway, California tells the heart-wrenching story of what happened to her and her family, and why it is important to pick a good public insurance adjuster firm like Quality Claims. Why Did a 2007 Fire Victim Pick Quality Claim Management as their Public Adjuster RESOURCES & LINKS Quality Claims Management, San Diego, CA http://www.qualityclaims.com National Association of Public Insurance Adjusters http://www.napia.org Rancho Bernardo United http://www.rbunited.com United PolicyHolders http://www.unitedpolicyholders.org About the author Ron Reitz is president of San Diego-based Quality Claims Management Corp., a nationally licensed public insurance adjuster, providing hazard claim recovery services to investors, mortgage servicers, homeowners and businesses. Earlier, he pioneered the national hazard insurance claims business of GMAC-RFC (now GMAC-ResCap). A CPPA (Certified Professional Public Adjuster), Mr. Reitz is Past President of the California Association of Public Insurance Adjusters as well as an Officer of the National Association of Public Insurance Adjusters (He will be President in 2012). Contact Quality Claims Management at (619) 450-8601 or www.qualityclaims.com.