Long Urges Consumers to Become Educated About Adjusters

North Carolina Insurance Commissioner Jim Long cautioned consumers about the use of “public adjusters” to process Hurricane Isabel-related claims. Public adjusters are not the same as the adjusters sent by insurance companies, and Long urges citizens to be aware of the differences between the two types and to know what to look for in an adjuster before filing a claim.

“The reason we are advising people about this issue is because of the phone calls we have received,” Long said. “It’s obvious people are confused about this.”

Adjusters sent by the insurance company: Are employed directly by an insurance company, either individually or by contract; May handle auto, residential property or commercial claims; Come out to the site of the loss to assess the damage on behalf of the company; Are required to be licensed by the Department of Insurance. If they are from out of state and are assisting during a natural disaster, they must hold a license in their home state and must notify the Department in writing before going to work; and Are paid by the insurance company.

On the other hand, public adjusters: Contract with the insured directly, not with the company; Cannot handle damage to motor vehicles; Appraise the loss and determine the amount of damages on behalf of the insured. Are held to the same licensing and registration requirements as company adjusters; and Are paid by the insured (usually a percentage of the claim payment received from the insurance company).

“The main point to remember when using a public adjuster is that you will be responsible for paying his or her fee, ” said Long. “If you do decide to hire a public adjuster, be sure to understand the fee arrangement, which might be as much as 10 percent of your total claim payment. That means a $100,000 claim could cost you $10,000.

“If you’re not satisfied with what your insurance company offers you for your damages, you can hire a public adjuster or invoke the appraisal conditions of your policy,” Long continued. “But be aware that a public adjuster can’t get you any more than what you’re supposed to get. If you want to know more about your appraisal rights, talk to your agent – he’s there to help you, that’s what you pay him for.”

State law requires that the written contract signed by the public adjuster and the insured fully explain the fee arrangement.

Consumers can call the Department’s Agent Services Division to inquire about an adjuster’s license at (919) 733-7487. For answers to general insurance questions or to file a complaint, call the Consumer Services Division toll free within North Carolina at (800) 546-5664.