Learner Publications | Chris larson

Public Adjusters Smooth Claims Process

It's something you hope to never have to face: a fire or a storm destroys part or all of your house. Of course, you'll probably have insurance against such a loss, so there's at least some financial security. All you have to do is call your insurance company, get the settlement check, and start rebuilding.

Well, not so fast. There's someone else you may want to contact before the claims process gets too far along - a public adjuster. Like their counterparts employed by the insurance company, public adjusters are charged with determining the extent and value of damages to your home and personal belongings. The difference is that while the insurance adjuster is working for both you and the insurance company (a situation that some would say poses a conflict of interest), the public adjuster works only for you, looking to make sure you get the most money possible from your insurance claim.

"Public adjusters are able to operate because of the subjectivity inherent in the claims process," says Dorian Bezanis, vice-president of Rogers Park-based Alpha Adjusting. "What's damaged? What's the value of the damages? Every contractor has a different opinion of what's damaged, and a different estimate of the cost." Personal property damage can be subjective as well; the value depends on factors like when and where it was bought, current prices, and depreciation.

There are over 180 public adjusters in Illinois, according to the state Department of Insurance, the agency which licenses them. The majority operate in the Chicago metropolitan area, so finding one shouldn't be a problem. The best way to get one is probably to ask friends or co-workers for a recommendation. That's the primary way Alpha receives new clients.

"Public adjusters bring many benefits and conveniences to the insured," Bezanis says. Experienced adjusters will survey the physical property, making sure everything that's damaged or destroyed - even if it's hidden or easy-to-miss - is accounted for. They'll also take care of the time-consuming, sometimes-painful task of inventorying and pricing personal items. And finally, they'll work directly with the insurance company, negotiating the highest possible settlement for the homeowner.

Assessing the structural damages is a major part of a public adjuster's duties. In addition to the obvious losses - shattered windows, smoke-stained ceilings - a good adjuster will look for hidden damages, or things that may not cause a problem right away. Wood floors are a good example, Bezanis said. If he thinks the floor took in a lot of water from the firefighters' hoses and will start to warp in a few months, he'll make sure it's replaced right away.

Inventorying personal property is another instance where a public adjuster can help a homeowner. A homeowner on his own will be handed a stack of inventory sheets by the agent, and must itemize and price everything himself.

"It's a very laborious and sometimes gut-wrenching task," Bezanis says. "Very few people have the patience and the acumen to do the inventory accurately." Alpha makes sure every single damaged item - even old shoes or a bottle of shampoo - is accounted for. "If you leave stuff out, you're really losing money, money that you are entitled to."

Public adjusters will also do the inventory much quicker. "A homeowner going through his home might take two weeks to inventory everything, while a public adjuster will take three or four days," he said. That savings in time speeds up the claims process, getting the money from the insurance company to the insured quicker.

Like all public adjusting companies, Alpha stays familiar with the latest changes in pricing and labor costs. After all the personal effects and structural damages have been determined, Alpha calculates a dollar amount for the loss. The damaged personal effects are organized into bags for easy reference, and a thick printout, detailing the loss and the cost, is presented to the insurance agent.

"Usually, we leave that meeting with the agent with a clear understanding of what was damaged," Bezanis says. That's not to say the insurance company accepts everything and writes a check. "The agent goes back to the office, sits down with his red pencil and changes the numbers." The important factor, he adds, is that what is damaged is agreed on; the negotiating turns only on the cost of those damages. The public adjuster and insurance company typically make several offers and counter-offers before and counter-offers before a final number is reached.

When the settlement is agreed to by both sides, Alpha gets its percentage - 10 percent, the standard rate throughout the industry. While that amount may seem high, Bezanis believes that, even with the fee, the insured comes out ahead; the settlement is always higher than it would be without a public adjuster, and the insured also gets convenience and expert advice.

"Plus, we're essentially being paid by the piece, so the insured knows we're not going to leave anything out."

Bezanis emphasized that just because public adjusters can negotiate a higher settlement doesn't mean the insurance companies are trying to rip off their policy-holders. "It all comes down to a matter of perspective and subjectivity, of knowing what the fair prices are, and arguing those points." The insurance industry is relatively small, and Alpha tends to see the same agents on a regular basis. "We have good working relationships with the bulk of the insurance companies and agents," he says. "They know us, and we respect each other. Still, they aren't fond of us."

While public adjusters can be brought in at any point during the claim process, it's far better if they're contacted right away, Bezanis said. "We get calls from people who are pretty far along in the claims process, maybe there's an offer on the table and it's not what the insured expects. So they call us." While public adjusters can usually still negotiate a higher settlement, "it's really an uphill battle," he says, since the insurance company at this point has already done a lot of work on the case, and is less likely to adjust its figures much higher.

In the end, even with the conveniences, the money is what really matters. Bezanis believes that a typical homeowner, going through a major damage claim for probably the first time, is at a severe disadvantage without help from an expert. Aside from buying the home, the claim is probably the largest financial situation a homeowner will ever face, Bezanis says. "Just like you wouldn't go to court without an attorney, we believe that most people can't afford not to use a public adjuster."