Driving on I-10 outside of New Orleans is a lot like driving on any other highway, in that it's not uncommon to see billboards and signs vying for the attention of drivers. The only difference recently is that instead of hamburgers and gas stations, these signs are pushing lawyers and public adjusters by posing such blunt questions as, "Has your company adjuster given you a raw deal?" or "Are you dissatisfied with your insurance settlement?" Turn on the radio or television, and the same sort of marketing is even more evident.
Indeed, passing through still-devastated areas of the city reveals lawn signs on every corner that seem intent on planting the seeds of discontent in those who feel they have not received what they fairly deserved from their insurance companies. Or they could be appealing to bitter homeowners who have diligently paid premiums over the years, only to feel cheated by the settlement offered by a staff or independent adjuster. Whatever the motivation, it inevitably makes the job of the independent adjuster more difficult. But is the relationship between public and independent adjusters really so volatile?
The Good
The good news out there is that most public and independent adjusters agree that, in the majority of instances, there are benefits to both professions. According to most people who responded privately from a posting on the forum site www.catadjuster.org, a web site that serves as a gathering place for new and veteran catastrophe adjusters, isolated are the claims that are unnecessarily complicated by the inclusion of either party. In many instances, independent adjusters were ambivalent about a public adjuster's involvement. In other cases, a public adjuster's role was genuinely appreciated.
"In commercial claims, you'll see more public adjusters who really can provide a benefit," said Kevin Hromas, an independent adjuster who formerly worked as an adjuster for a major carrier. "On a commercial claim, there is a lot more information that a public adjuster can work with you on. They can provide information from the business, lost-income numbers, inventory, things like that that they will assist with."
Steven Ebner, an independent with Ebner Adjusting and a former church pastor, agrees that public adjusters have a place in the market.
"There are reasons why a public adjuster would be a good thing," he said. "If it's a complicated claim, I can save the insured a lot of time and money by having someone handle that for them."
S.R., who has worked both as a public and independent adjuster, offered up some other situations where he believed a public adjuster can be invaluable to an insured.
"Folks who are scared of the insurance company or those who are impatient waiting on the insurance company to act on a claim can benefit [from a public adjuster]. Folks who are just too busy in general or live in different areas from where the claim occurred should consider a public adjuster. And then some people who just don't trust the insurance company [also should consider it]."
The Bad
So why the contentious relationship? Independent claim adjusters know that getting off on the right foot is paramount in effectively settling claims with insureds. A prompt response increases customer satisfaction for the carrier that the independent is representing, but it also can help facilitate in closing the claim quickly, thereby limiting the amount of money an insurance company has to set aside from its financial holdings in anticipation of the potential loss. When a public adjuster gets involved, the process can sometimes come to a screeching halt.
"If you are dealing with a contractor, you can talk about costs involved in doing a repair project," said Hromas. "You are going to get the information that says what it's going to take to repair the house. If you're dealing with a public adjuster, he is not necessarily looking at what the repair costs are, but rather what costs can he get into the estimate that will maximize his 10 percent fee." He went on to say that insurance companies acknowledge an "irritation factor" when dealing with public adjusters and will sometimes pay more than the policy requires simply to avoid litigation and get the claim closed.
What is the source of frustration for independents when dealing with public adjusters? It all boils down to education. In fact, it may be the single largest factor of frustration for independent and public adjusters alike.
"I think the biggest issue that exists on both sides of the fence is the educational aspect," said Marc Dubois, an executive general adjuster for MGD Claim Services who has 33 years of experience both as a public and independent adjuster. "I do not think a public adjuster is any worse than an independent adjuster if they do not have the necessary tools of their trade, which is a solid background in policy interpretation and damage assessment."
Dubois further explained his viewpoint with what he deemed a watering down of the profession. "You've got people taking three-day courses to get a Texas license who are out there calling themselves insurance adjusters, which is a total and utter farce. And you've got the same thing on the public adjuster side, where you've got people who decide to go represent an insured on a whim and they get a facsimile of a license and away they go. I think there has to be much more stringent regulations of who gets to call themself an insurance adjuster. You can be pumping gas one day, and three days later be out on the road with a legitimate license in your hand. I don't think there is any other profession that gives you that opportunity."
Ebner agreed that better experience and education could alleviate some of the difficulties. "I don't think someone should go into the public-adjusting field without claim-adjusting experience. Ideally, you should have a background in claims or construction. If you have taken a three-day training course and were working in a factory last week, you don't know policy or construction. [Insurance companies] may have needed those people in 2004 and 2005, but that's not going to hold through forever."
One public adjuster, who wished to remain anonymous, had his own opinions on the state of education for those in his field. "A lot of these independent adjusters lack education, but I think a lot of public adjusters lack education, too," he said. "The company I work with, most of the guys do not know how to read a scope or perform one. They don't have as much experience as they should in evaluating whether we should sign a claim or not. But on the other hand, it's hard to find anyone who does what we do, who has construction experience."
The Ugly
Many independents also seem to feel that greed is too much of a motivating factor for many public adjusters. Accusations of inflated claims and anecdotal evidence of excessive billing charges are shared among independents with a certain amount of one-upmanship.
"Until recently, I had not run into a public adjuster that did not know what they were doing," said Ebner. "But recently I had a public adjuster who had not gone up on the roof himself and had not even inspected it prior to meeting me; he had just gone with what a contractor had told him would be the cost to replace the roof. It had four shingles damaged on the roof. I was being presented with a $20,000 repair estimate for the roof with four missing shingles by someone who had only seen the roof from the ground."
"A public adjuster gets into a residential claim by promising to basically increase the recovery for the insured," said Hromas. "The policy is going to pay for indemnification — putting the person back to the way they were — not indemnification plus 10 percent for the public adjuster's fee. The perception and the reality is that the public adjuster does not do a good job in explaining to the insured that his fee will have to come out of the insured's repair cost. You cannot just merely inflate pricing to offset that."
The Future
Public adjusters typically make more money on a claim-by-claim basis than their independent counterparts. Therefore, it would seem logical that some independents would be drawn to the public arena. Is this the future of independent adjusting?
"I don't really think so," said Dubois. "I think there's always going to be a need for the insurance carrier to have a representative in the field, attempting to control the loss on their behalf. But I think it's going to become more prevalent that public adjusters are out there because of the lack of qualified personnel that the insurance companies are fielding. One's a response to the other."
In some independents' eyes, their job is not just about earning a paycheck. Many derive a deeper feeling of satisfaction from a job well done.
"Public adjusters will make more than an independent on every file because they are making 10 percent of every dollar that goes out the door," said Hromas. "But I really look at it more as, 'How can I help these people get back to the way they were before?' To me, this is part of almost like a ministry that you can have in helping people get their lives back together. From the public adjuster viewpoint, I could never see that as a mindset they might have."
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