Learn more about the insurance adjuster industry
An article on insurance adjusters
In 1971 I did not know what a public adjuster was; in 1978 I became one.
Now that we are finished with the long road since the fire in August, I wanted to thank Glenn and Nate for all your help with everything. You both have been gentlemen and very considerate and patient with my folks and our situation. It is very much appreciated.
Judith Chorub Gurian
When I first started in the insurance industry as an insurance adjuster for a large insurance company, I was warned that public adjusters were "no good." However, after years of working on opposite sides, I learned that they served a need similar to the adversary situation in the law. Prior to January, 1986, the State of California licensed insurance adjusters under the Department of Consumer Affairs, anyone who qualified and passed the test obtained an insurance adjuster's license. Most licensees chose to work as "independent" adjusters and represent insurance companies.
A few decided to represent the insured and worked as "public" adjusters. There was no distinction in the law, and in fact, certain adjusters worked both sides. It should be pointed out that some insurance companies rely on staff personnel as adjusters. If they are salaried employees of the company, they do not have to have license or pass any State qualification test.
Eventually, the Department of Insurance took over the licensing and monitoring of insurance adjusters. As of January 1, 1986, the California Legislature passed the "Public Insurance Adjusters Act." It became part of the California Insurance Code, Division 5, Chapter 2, Section 15000-15062. The law now in effect is very specific as to what a public adjuster can and cannot do. In order to qualify for a license, an applicant must pass an extensive test. The test includes such subjects as basic Insurance theory, knowledge of con-tracts, the "Unfair Claims Practices Act," and the duties and responsibilities of public adjusters.
I never thought that I would have a reason or choose to work with an insurance adjuster. After having worked with you, I feel very strongly that choosing Metropolitan Adjustment Bureau was beneficial to having my building rebuilt and having the insurance company pay their portion of the costs in a very timely manner.
Larry Harrow
Once the test is passed, there are other specific requirements regarding the conduct of the business. For example, under section 15012, "the license . . . shall include, but not be limited to, adjusting claims for fire and allied coverages, burglary, flood and all property claims both real and personal, and loss of income. "The law is also specific as to the type of contract that is required. There must be a 72-hour cancellation clause and it must be clear that the public adjuster represents the insured only. The hours of solicitation are limited to 8 a.m. thru 6 p.m. The acts also provided for disciplinary proceedings and penal action.
Public adjusters can handle all types of insured losses for the policy holder. However, the majority of claims are fire losses, both dwellings and commercial. Occasionally, a burglary, employee infidelity, or water damage is sufficiently complex to warrant the services of a public adjuster. Since the feels usually a small percentage of the amount collected, the loss would have to be substantial and complex to justify the fee and the time required to settle the claim.
Generally speaking, any loss in excess of $25,000 that requires building estimates, inventories, and or accounting work would benefit from the professional services that are provided by a public adjuster. He has knowledge of the basic elements of the insurance contract and can present the claim in accordance with the terms and conditions of the policy. The Insured is apprised of his obligations under the policy, and extensions or additional coverages that may affect the insurance claim. Building estimates are obtained and compared to those obtained by the insurance company. By making a bid analysis and negotiating certain points with the insurance company representatives, the claim recovery is usually much greater, even taking Into consideration the adjuster's fee.
Retaining you to handle one of our client's loss was an excellent move on our part. You made the process relatively painless and were able to recover more monies than my client was contractually entitled to from the insurance company. Your knowledge of the adjustment process and your relationship with insurance company personnel made your services valuable.
Bernard H. Gudvi
Gudvi, Chapnick & Oppenheim, Inc.
A physical inventory specifically noting the extent of damage and corresponding value is a critical point in any claim presentation. A professionally itemized, detailed and documented inventory enables the public adjuster to demonstrate and negotiate a proper settlement. In addition to providing the aforementioned services, an important aspect in most commercial losses is the loss of income. How does one project the amount of income that would have been earned had there been no fire? By of the records and by projecting income before and after the loss, the public adjuster is able to estimate the income loss under the terms and conditions of the insurance policy.
Anyone who has suffered through a fire, burglary or other similar loss can appreciate what a traumatic experience it is. After several days of trying to cope with the situation and finding new living quarters or attempting to keep the business operating, it usually becomes apparent to the insured that he would benefit from professional help. It is in this type of situation that a public adjuster could be of assistance.
On many occasions, attorneys and public adjusters work together to provide services for the insured. The attorney works on the legal aspects of the claim, including liability and subrogation, and makes sure that the insured's interests and rights are protected at all times. The public adjuster appraises the extent of the loss, decides how best to present the claim, prepares estimates and inventories and negotiates the settlement with the insurance company. The attorney and the adjuster make sure that the best interests of the client are paramount and that nothing is done to jeopardize the client's rights under the insurance contract.
Without access to your knowledge of what we really were entitled to with our insurance contract, we were more than likely been misled into accepting less.
My family benefited from having you represent us. The fee for these services was far out-weighted by the increased size of the settlement you negotiated for us.
Behrouz Shadsirat
Each works within the framework of their expertise to provide services for the client. Attorneys refer clients to public adjusters, when they feel it is in the client's best interests. Public adjusters recommend the services of an attorney, when it becomes apparent that legal advice would be helpful to the client. Attorneys and public adjusters can and do work hand-in-hand to provide services for their clients. Thee are many occasions when public adjusters are called by attorneys to help develop and document claims for their clients that are not necessarily first party claims. They are also asked to review claim procedure and claim handling.
As stated above, the proper presentation of a claim can also increase substantially the amount of recovery. After one particularly difficult negotiation, the client received a settlement of $400,000. When he was presented with the final check, he told the public adjuster that he would have settled the claim on his own two months earlier. The public adjuster was upset with the client's remarks until it was quickly explained that the client would have settled for $175,000 not realizing how extensive his claim really was. What he also said was that he would not have taken the time or had the expertise to document the claim in the professional manner of the public adjuster.
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