It’s no secret that the advice here at Team Clark is to only file insurance claims in catastrophic situations, or when you can’t self-absorb any losses. If that happens, you’ll likely be dealing with a claims adjuster as part of your insurance company’s claims process.
Claims adjusters are professionally trained to come to your home or property and assess damages for the insurance company. In this article, I’ll review some things to know and do before you deal with a claims adjuster.
- Claims Adjusters Inspect Property Damages.
- There Are Three Kinds of Claims Adjusters.
- Public Claims Adjusters Charge a Percentage.
Things To Know Before You Deal With a Home Insurance Claims Adjuster
A homeowners insurance policy is an agreement between you and your insurer. In exchange for your premiums, your insurer agrees to compensate you up to your coverage limit in the event of a covered event. But that doesn’t mean anytime something goes wrong, they’ll write a check.
Insurance companies rely on claims adjusters to investigate filed claims and determine just how much the insurance company should pay. So, before you deal with a claims adjuster, here are a few helpful things to know:
Claims Adjusters Inspect Property Damages.
Claims adjusters — also called insurance adjusters — help insurance companies “settle” claims, or figure out how much to pay a policyholder after property damages or loss.
Imagine this: a kitchen fire damages the structure of part of a home. In this situation, the homeowner can file an insurance claim to help cover the costs of repair. But the homeowner shouldn’t expect the insurer to send a check for their full dwelling coverage limit — or any amount at all without first making sure they’re liable.
Insurance companies will only pay for damages that match your policy’s agreement and they only want to pay the lowest amount needed to make repairs. I say “needed” loosely because there are many factors that go into estimating that amount. And there are even more factors that impact what the final cost of repairs actually is.
A claims adjuster begins the settlement process with an investigation. They will come to your property and use several tools — like cameras and measurement devices — to gather info on damages. While they’re noting any damages, you may need to call attention to things that they might miss. And don’t get rid of anything before it’s documented.
After the adjuster has made notes, taken photos and asked you any relevant questions, they work to convert damages into dollars. Programs like Xactimate help generate estimates for property claims based on information related to the damages. Finally, the insurance company will make a settlement — or payout — offer based on info gathered during the investigation.
There Are Three Kinds of Claims Adjusters.
The first thing to know is there are three kinds of claims adjusters: staff, independent, and public.
A staff claims adjusters works for a single insurance company. When a claim is filed with that company, they send one of their staff adjusters out to investigate. You won’t have to pay a staff claims adjuster because they are paid by the insurance company.
An independent claims adjuster will often work for several insurance companies as a sort of third-party investigator. Like staff claims adjusters, independent claims adjusters work on behalf of insurance companies. But the key difference is that an independent claims adjuster is not a direct employee of an insurance company.
Finally, a public claims adjuster works for you — the policyholder. In the event of a major accident or natural disaster, it’s common for public adjusters to contact you. Since they don’t work for insurance companies, they’re more likely to have your best interest in mind. That said, public adjusters also charge a percentage of your settlement. More on this below.
If you file a claim, your insurer will send a staff or independent claims adjuster to check out any damages. Unlike a public claims adjuster, claims adjusters that work for insurers are also typically going to look out for the best interests of the insurance company.
Public Claims Adjusters Charge a Percentage.
You might be able to find public claims adjusters who are willing to do an initial property visit for free. But if you decide to work together — meaning they’re willing to take on your claim and you want them to — you’ll have to pay for services.
Fees are typically taken as a percentage of your settlement and can range anywhere from 5%–20%. Where you live impacts how much you’ll pay though, as the fees that public claims adjusters charge vary from state to state.
When dealing with a public claims adjuster, you may hear the terms fee limit or fee cap. This simply refers to the highest amount that a public adjuster can charge for working a claim. In Florida, for example, public adjusters have a 10% fee limit for “claims based upon a declared emergency…made during the first year after the declaration of the emergency.”
It’s not uncommon to feel disappointed by a settlement offer your insurer makes based on the investigations of a staff or independent claims adjuster. If this happens to you, it might be worth hiring a public claims adjuster. Even with their fees, they might help you save a significant amount of money down the line by making sure your insurance company pays you a fair settlement.
Before you hire a public claims adjuster, always check their credentials. Make sure they are licensed to work in whatever state they’re practicing. Then look for any reviews or references. To get started, check out the National Association of Independent Insurance Adjusters (NAIIA), your state’s insurance department, or the Better Business Bureau.
Things To Do Before You Deal With a Home Insurance Claims Adjuster
Before a claims adjuster arrives, your insurance company might ask you to complete a proof of loss form. This form is important and allows you to itemize your losses. But this isn’t the only thing you’ll want to do to prepare.
Dealing with damages or loss to your property can be traumatic. It’s very important to prepare and be as engaged with the claims process as possible though. Your complete recovery – financial and emotional – depends on it.
So, what can you do to make things easier if you find yourself needing to work with a claims adjuster?
Make a List of Everything.
Even though it’s the claims adjuster’s job to document things, they don’t know your property like you do. Before one gets to your home, make a list of everything! Be meticulous about recording damages as you see them — make notes, take photos and even grab your phone to record videos that show things from different angles. Don’t worry about doing too much. As a rule: it’s better to have proof and not need it than to need proof but not have it.
It’s also a good idea to itemize your possessions. To do this, keep track of:
- What the item is
- When you purchased the item
- How much you paid
- How much you estimate a repair/replacement will cost
That said, it’s never too soon to start keeping track of your things; don’t wait for disaster to strike. Whether you’re a scribble-notes-on-paper person or you love a good spreadsheet, do what is easiest for you to keep organized. Clark recommends doing a video walkthrough:
“The video doesn’t take that long. You’re talking about 10 minutes or less, once a year, to update the walk and talk and say, ‘Oh yeah, I got that at Target, and it cost this much. And I got that at Sam’s Club, and I got this at blah, blah, blah.’”
But if something has already happened and you’re getting ready to meet with a claims adjuster, be prepared to also keep notes of every interaction you have with the insurance company and/or representatives on their behalf. This includes:
- Date and time of interaction
- Name of representative(s) spoken with
- Details of discussion
Again, while you might not need all of this information, it’s better to have it just in case you do. Especially if — at the end of an investigation — your insurance company offers you a low settlement. More on what to do if you get a low settlement offer below.
Gather Your Receipts.
Along with any insurance paperwork, keep all your documents related to the contents of your home and any work you’ve had done on it. Receipts go a long way in proving how valuable things are in your home.
You can keep a folder with receipts for select items. Or maybe you want to take photos with your phone and keep a digital folder. Again, do this in the way that is easiest for you so that — if the time comes for you to submit documentation to your insurer — you’re prepared.
In addition to any receipts from before an unexpected event, keep receipts throughout the entire claims process. When it comes to getting paid for replacing damaged items, the Insurance Information Institute says, “To get fully reimbursed for damaged items, most insurance companies will require you to purchase replacements. Your company will ask for copies of receipts as proof of purchase…”
Prepare for the Settlement Offer.
Even if you do everything your insurance company asks of you, there’s a chance they’ll offer you a settlement that’s lower than you’re expecting. While getting a low offer doesn’t feel good, mentally preparing for the possibility means you’re less likely to be caught off guard if it happens.
And there are things you can do if you’re facing a low offer from your insurer. First, know that you don’t have to rush and accept an offer.
You can ask questions and request explanations for estimates your insurer provides. You might find that, “you and the insurance company interpret your policy differently.” For example, your insurer may say they’re giving you a market value for your home, rather than considering the condition your home was in before disaster struck.
Things You Can Do if You Don’t Agree With the Settlement Offer…
If you and the insurance company can’t reach an agreement, you can escalate the issue. If you’ve been dealing with an insurance agent, ask them to connect you with the company’s claims department manager.
You can also check if your policy allows for independent appraisal after a loss. If so, inform your insurance company that you’re going to proceed with an appraiser. This is different from a public claims adjuster because an appraiser isn’t necessarily looking out for you. An appraiser is simply meant to be an impartial third-party that determines the value of your property or the costs for replacement or repair.
When you get an insurance appraiser involved, a third party will ultimately have the binding decision when it comes to your claim. And there’s a chance it won’t work out in your favor, but it might be worth it if you think the insurance company is shortchanging you with their offer.
And of course, you can also choose to get a public claims adjuster involved. If you’re unhappy with a settlement offer, a public claims adjuster can hold your hand through a dispute process against your insurer. They can also help you move forward with negotiations, supplemental claims and more.
Hopefully, you won’t find yourself in a situation where you need to file a claim with your insurance company. But, there are things you can do now to prepare so that — if disaster strikes — you have a few less things on your plate to deal with.
Take stock of your valuable items and any upgrades you’ve made to your home, and update this list once a year. This can be used as proof of item value in the future if anything gets damaged. As a bonus, when it’s time to update your home insurance or if you’re wondering how much homeowners insurance you need, this list will help you make sure you have enough.
And if you need to file a claim in the future, be prepared to work with a claims adjuster and advocate for yourself to make sure you get a fair settlement.