When a loss occurs in your home, and you’ve decided to hire a public adjuster on your behalf, here are some helpful hints to be aware of. First, as we’ve stated before, not all public adjusters know what they’re doing, and they’re all not the same. A good public adjuster will work on your behalf to maximize your claim and either recommend restoration contractors to you, or help you with hiring one. They will make sure that contractor documents everything so the claim process is thorough, and they themselves will also document all of the losses and handle the claim in a timely fashion. For this service, public adjusters will generally charge 25 to 35 percent for water losses and as low as 10 to 15 percent for fire damage. A good adjuster can also potentially get up to five times more than the average home owner handling the claim themselves, which will make their percentage a bargain.
Example: A water loss in your home that you decide to handle yourself gets you a check of $3000, minus your deductible of $1000, and your left with a net of $2000 for the repairs after the mitigation work is complete. A public adjuster can very easily, handling the same claim, get $10,000 or more. Taking out their percentage which is $3000 and your deductible, and your left with a check for $6000 for repairs after mitigation. Showing you that a good adjuster can be well worth their fees.
On the other hand, hiring a poor public adjuster can be a exhaustive process that could lead to the restoration of your property not being done properly and also your claim getting handled poorly. A lot of adjusters reply on contractors to get them leads, but some also reply on certain contractors to give them “kick backs.” Why would a contractor pay a percentage to an adjuster for work? It’s simple, volume. A well known public adjuster can give one contractor tens of thousands of dollars in work each year. And some contractors heavily rely on this type of relationship as a primary means of income. So, it is better for the contractor to pay the kick back which can be as high as 30 percent in order to keep the jobs rolling in. But how’s this a problem for you? There’s actually several answers. First, the type of contractors who would accept such a deal only will because their company is either not good enough or reputable to make it on their own, or because this is the only way they can get work. This will no doubt lead to the contractor to either do more demo work in your home which wasn’t called for to build the claim up higher, or it will have them rush and compromise the remediation because they’re working against the clock accepting a deal for 20 to 30 percent of their gross. How can a home owner spot this type of back door dealing?
Example: Let’s say you had a fire loss in your home which should be a $50,000 claim. The adjuster offers to sign you up at a very low 6 percent, while every other adjuster was between 10 to 15. The other adjusters would have made $5,000 to $7,500 for handling your claim, while your adjuster is only making $3,000. Why would he take such a loss? Because he’s getting kick backs from the restoration contractors he insisted you hire at 20 to 30 percent. So, with his cut from the contractors, he’s making a back door $10,000 to $15,000, and now has a hefty total of $13,000 to $18,000. What did you get? Work that was done cheaply and of very poor quality after everything is said and done.
How can you avoid this issue? Ask your public adjuster for his list of referred contractors and do your research. You do not have to hire anyone the insurance company or the public adjuster tells you to, if you do have the confidence in that company. If you have dealt with other restoration companies in the past, you can insist on hiring them again. Your public adjuster works for you, and his job is to be your liaison with your insurance company and not to be your general contractor.