What Are Public Adjusters?

There are many different roles inside the world of insurance adjusting. You can work in a variety of specialties, from auto, to home repair, to catastrophe. There is also the distinction between working independently and working in house for an insurance company or agency. But there is one more category of insurance adjusters that is distinct from the rest: public adjusters. 

Who are Public Adjusters?

Public adjusters, as the name suggests, are adjusters that work for the public rather than for an insurance company. They can be hired by a homeowner, auto owner, or other individual to represent them when filing an insurance claim. Sometimes people hire public adjusters up front to ensure that the process is handled fairly and most beneficial to them. Sometimes a property owner will hire a public adjuster later in the process if they feel their claim was not handled properly. 

How Public Adjusters Work

The actual day-to-day work of a public adjuster is very similar to that of any other insurance adjuster. The main difference is who hires and pays them. 

When a public adjuster is hired to work on a claim, they will schedule a time to examine the property and estimate the cost of repairs. Once they have done this, they present their findings to the insurance company and work with them on negotiating the settlement. This can be considered a positive for property owners who would rather not have to deal with the conflict of negotiation with the insurance company. Once the public adjuster and the insurance company’s adjuster come to an agreement, the insurance company will pay out the claim as they would any other time. The public adjuster charges a percentage of the payout, which is typically between 5% and 20%. Some states have limits on how much public adjusters can charge, so this can vary depending on the location and the rates discussed with the client.

Public Adjuster vs. Typical Insurance Adjusting

There are some reasons why one might choose to be a public adjuster. Much like independent adjusting for insurance companies and adjusting agencies, there is flexibility and earning potential in public adjusting. Some people even view it as more rewarding, as you represent the insured party rather than an insurance company. However, there are some drawbacks that make it a less desirable choice. 

First, there is a slightly higher barrier to entry for public adjusters. They also have to take and pass a licensing exam and pay a fee, but they also have to secure a 10,000 surety bond. This is a significant extra financial hurdle that isn’t present with becoming an independent insurance adjuster. It’s also somewhat harder to train and prepare if you don’t already have an insurance background as many training programs don’t cover public adjusting.

Moreover, there are many industry experts who believe that public adjusters are unnecessary at best and predatory at worst. While it is true that an independent insurance adjuster is hired by the insurance company, they are actually tasked with representing both parties. Independent and staff adjusters are held to a high ethical standard and it is very rare that they intentionally misrepresent facts to reach a more desirable conclusion for the insurance company. 

Speaking of ethics, it could be in a public adjuster’s best interest to draw out the claims process in hopes of a higher settlement because they work on a commission. This may also mean a higher payout to the insured party, but the delays may cause them to have to pay for necessary repairs out of pocket and suffer other inconveniences for a return that is marginal at best.

Start Smart with 2021 Training

While there may be good reasons to transition to public adjusting later in one’s career, we always recommend getting a solid foundation by becoming an independent or staff insurance adjuster first. It is an ideal start in the insurance adjusting industry and provides a flexible, sustainable career for the long haul. Plus, with training from 2021 Training, you can get the education you need to start off on the right foot. You can get started right away! Click here to find the perfect course package for you.