What is a public adjuster and what do they do?

A public adjuster is a claims professional who works for you, the policyholder, on a property insurance claim. You hire them, you pay them, and their job is to document your loss and negotiate with your insurance company on your behalf.

What does a public adjuster do?

The NAIC’s Post-Disaster Claims Guide describes the job in three parts. A public adjuster estimates the damage to your home and property, reviews your insurance coverage, and negotiates a settlement of the claim for you.

Day to day, that work looks like this:

• Reading your policy to see what is covered and what limits apply.
• Inspecting and measuring the damage, then writing an itemized estimate of repair costs.
• Preparing claim paperwork, such as a proof of loss. That is a signed statement of what was damaged and how much you are claiming.
• Meeting the insurer’s adjuster and making the case for items that were left out or priced too low.

Public adjusters handle property claims made under your own policy, such as fire, wind, hail or water damage to a home or business. The NAIC’s model law for public adjusters limits them to this kind of claim and leaves out auto insurance. Florida law bars them from injury and death claims.

How is a public adjuster different from the insurer’s adjuster?

Three kinds of adjuster can show up on a claim. The NAIC guide explains them this way:

The name “independent adjuster” trips people up. It means independent of any single insurance company. Insurers bring in independent adjusters when they do not have enough staff, which often happens after a large disaster. They do the same job as a staff adjuster and they represent the insurer.

A public adjuster is the only one of the three who represents you. Hiring one does not remove the insurer’s adjuster from the claim. The NAIC notes that the insurer will typically still send its own adjuster, and that it does not have to accept your public adjuster’s estimate.

Who pays a public adjuster?

You do. The fee is your responsibility, not the insurer’s, and insurance policies do not cover it, according to the Illinois Department of Insurance. In practice the fee usually comes out of the money the insurer pays on your claim.

Depending on your state’s law, a public adjuster can charge a flat fee or a percentage of your settlement, and some states set a maximum. The details matter a great deal, especially whether a percentage applies to the whole payout or only to the extra money the adjuster brings in. Our guide to public adjuster fees walks through the math.

What can a public adjuster not do?

A public adjuster is not a lawyer, a contractor or a guarantee. The limits below come from state law and regulator guidance. Rules differ by state, so check the rules where you live.

• Give legal advice. Florida’s statute says a public adjuster may not give legal advice. The Texas Department of Insurance says they cannot practice law. If a claim turns into a lawsuit, that is work for a licensed attorney.
• Make the insurer pay. A public adjuster can argue and document. The insurer still decides what it will offer.
• Act as your contractor. Texas does not allow it. The NAIC model law says a public adjuster should have no financial interest in the claim beyond the agreed fee and should not hold the power to choose who does your repairs.
• Settle without you. Under the model law, a public adjuster may not agree to a settlement without your knowledge and consent.
• Cut you off from your insurer. Texas says a public adjuster cannot keep you from talking with your insurance company.

There is one more limit to know about. The NAIC guide says some states do not let public adjusters negotiate claims at all. In those states only a licensed attorney can represent you.

Do public adjusters have to be licensed?

In most states, yes. The NAIC’s State Licensing Handbook counted 40 states that license public adjusters when its chapter on adjusters was written. The handbook says licensing states test an applicant’s knowledge through training, experience or an exam, and many also review criminal history.

The license comes from your state’s insurance regulator. In Texas that is the Department of Insurance. In Florida it is the Department of Financial Services. An adjuster licensed in one state is not automatically allowed to work in another, which matters after a storm when adjusters travel in from elsewhere.

You can look up an adjuster before you talk terms. Our directory and license check points you to the right state lookup, and how to choose a public adjuster covers what else to verify.

Do you need one?

Not always. You are not required to hire anyone to file or settle a claim. United Policyholders, a nonprofit that helps insurance consumers, says the answer depends on your policy, the size of the loss, and whether you have handled a major claim before. It also points out that the smaller the loss, the less sense a percentage fee makes.

If you are weighing it now, read Do I need a public adjuster? or take the two-minute quiz.