On the Money: Say Hello to the Public Adjuster
What to do when an insurance claim doesn't meet expectations? A solution is easier — and less stressful — than you may think. Say hello to the public adjuster, an independent evaluator who will investigate your insurance claim and advocate for an improved settlement with an insurance company. Ed Mackoul, president of insurance brokerage Mackoul & Associates, explains that estimates from insurance companies "are not always accurate and the insured is not always happy with the result that they get. The insured can hire public adjusters to represent their interests."
The New York Public Adjusters Association (NYPAA) is a 100-year-old organization that brings together 164 of the approximately 400 licensed public adjusters in the state. The association promotes best practices among members and lobbies Albany for what it calls "consumer friendly laws" related to the insurance industry.
When registering a claim, a big challenge for insured parties is discovering what their coverage actually includes and which party is responsible for exactly what issue, says NYPAA President Bob D'Amore.
"Any layman trying to read a policy would have a horrible time, especially commercial policies, especially co-op and condo policies," continues D'Amore. "There is such a delineation of responsibilities. The public adjuster will look through the policy and see what it should cover and ensure issues are correctly evaluated and act as a go-between the insurance company and the insured."
Then there's money: "If a contractor says he wants $750,000 to repair your building and the insurance company says it is only worth $500,000, well, the truth is in there somewhere. How do you come to that truth and maximize the recovery? That is what a good public adjuster can do."
Public adjusters are typically paid a fee based on a percentage of the settled claim. The figure is always negotiable but is currently capped in New York at 12.5 percent of the total agreed-upon dollar amount. Most public adjusters will only take on large claims — those considered over $10,000.
"Public adjusters typically come into play when there is a significant claim," says Ed Mackoul. "Why take a chance if anything slips through the cracks? The second time you want to look at a public adjuster is when you are in disagreement with the insurance company. If an insurance company gives out a figure of $40,000 and you think it is an $80,000 claim, at that point you probably need to have a public adjuster represent your interests."
An adjuster usually ensures that contested claims do not end up in court. Most insurance payouts are calculated by established costs of materials and repairs. If an agreement still can't be reached, a third party is brought in to offer an alternative evaluation that usually resolves the conflict.
Mackoul cautions over engaging an adjuster for low or frivolous claims. He also advises against hiring an adjuster to contest every claim lodged with an insurance company.
"Adjusters are very good, very knowledgeable, know the policies and know how to get things done," says Mackoul. "But there isn't always a need for them. There are instances when a claim is cut and dry, you know what caused the damage, and the insurance company gives an estimate similar to that from a contractor. There may not be a need for a public adjuster at that point if there are no issues."
The final word, probably, should go to an adjuster. What qualities should the insured look for when hiring?
"Experience is the best teacher," says D'Amore. "Then add integrity and honesty."
That should be easy to agree on.
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