Public adjuster vs independent adjuster: who they work for and how they are paid

What is a public adjuster?

A public adjuster works for the insured. Florida's licensing rules describe the role as someone who, for pay, prepares or files a claim for an insured or acts on the insured's behalf in negotiating the settlement. The Texas Department of Insurance tells consumers they can hire a public insurance adjuster to negotiate with their insurer to settle the claim.

The policyholder pays the public adjuster. The fee is usually a percentage of the claim payment. Several states cap the fee and give the insured a short window to cancel the contract.

What is an independent adjuster?

An independent adjuster works for insurers, not policyholders. Florida defines an independent adjuster as a licensed all-lines adjuster, self-appointed or employed by an independent adjusting firm, who works on behalf of an insurer to determine the amount payable on a claim or to settle it.

Insurers hire independent adjusters when they need more people, such as after a hurricane or hail storm. The insurer or the adjusting firm pays them. The policyholder does not.

A staff or company adjuster is the insurer's own employee. Florida licenses this role separately as a company employee adjuster. Like an independent adjuster, a staff adjuster evaluates the claim for the insurer.

How is each one licensed?

Licensing follows the role. In Florida, an independent adjuster holds an all-lines adjuster license, such as the resident 6-20. A Florida public adjuster needs a separate 3-20 license, which requires an all-lines license plus six months of continuous appointment, a $50,000 bond and the public adjuster exam. Florida also does not let one person hold more than one adjuster license at a time.

Texas licenses public insurance adjusters under Insurance Code Chapter 4102, with its own exam, a bond of at least $10,000 and a contract that must be approved by the commissioner. Insurer-side adjusters are licensed separately. The Bureau of Labor Statistics notes that public adjusters may need to meet separate or additional licensing requirements, and that in some states adjusters employed by insurers can work under the company's license.

What does a public adjuster do on a claim?

A public adjuster reviews the policy, inspects and documents the damage, prepares an estimate and a proof of loss, and negotiates the amount with the insurer's adjuster. Many also manage the paperwork and deadlines during the claim. The role is about the amount and documentation of a covered loss.

A public adjuster is not your lawyer. State rules generally bar public adjusters from giving legal advice. If your dispute is about whether the policy covers the loss at all, or you are near a lawsuit deadline, a licensed attorney is the right professional. An appraiser under the policy's appraisal clause is different again: appraisal is a policy process for disagreements about the amount of loss.

Public adjuster vs independent adjuster at a glance

The key difference is loyalty. Two adjusters can inspect the same roof, but one is working for you and the other is working for the insurance company.

How much can a public adjuster charge?

Fee rules are state law, and they differ. The examples below show the ceiling, not the normal price. A lower agreed percentage still controls. In Texas, the fee can be based on the full settlement, not only the increase the adjuster obtains, and a percentage fee is barred when the insurer pays or commits to pay the policy limit within 72 hours after the loss is reported.

What should you ask the insurer's adjuster?

Whether you hire help or not, you will deal with the adjuster your insurer assigns. Ask for their name, license number, the company they work for and how to reach them. Ask for a copy of their estimate and the policy provisions they relied on for any item they reduced or denied.

Keep your own records. Write down the date of each call and what was said, and confirm important points by email. If the adjuster is an independent adjuster, remember that the insurer makes the final payment decision, so ask who has authority to approve each part of the claim.

Can I cancel a public adjuster contract?

Usually, for a short time. Texas gives you 72 hours after signing. Florida gives you 10 days after you sign, or 30 days after the loss for claims tied to a declared emergency, whichever is longer. New York allows cancellation until midnight of the third business day after signing.

When does hiring a public adjuster make sense?

A public adjuster can help when the claim is large or complex, when you do not have time to document it, or when you disagree with the insurer's scope and cannot resolve it yourself. On a small claim, the fee can take much of any increase.

Before you sign, the Texas Department of Insurance suggests checking the adjuster's license and complaint history, asking about the fee and trying to negotiate it, and confirming what services the contract includes. You still owe your deductible, and you may owe the fee even if the insurer does not raise its offer.

• Verify the license with your state insurance department.
• Read the fee percentage and the amount it applies to.
• Ask what happens if the settlement does not increase.
• Note your cancellation deadline before you sign.