Q & A: About Public Insurance Adjusters in Texas
What is a public insurance adjuster?
A public adjuster (PA) represents the insured home or commercial property owner (the policyholder) in the preparation, presentation and settlement of property insurance claims.A qualified PA has specialized expertise that can simplify and speed upthe complicated, time-consuming process of making and settling an insurance claim for property damage from fire, windstorm, hail, floods, hurricanes, and other disasters.
A PA works only for you–not an insurance company, not a roofing company, not arepair company, or general contractor. A PA is an important protection for yourrights as a policyholder.
When handling your claim for property loss, insurance companies use their own licensed claims adjusters, or sometimes contract with licensed independent adjusters. Their job is to represent the insurance company’s interests. The public adjuster focuses only on your interests.
There are three types of insurance adjusters: Company adjusters who work for the insurance company; Independent adjusters, who may work for several insurance companies; and Public Adjusters, who ONLY work for the policyholder.
Why hire a public adjuster?
A policyholder is required, under their policy, to prove a loss to their carrier. Few people have the necessary expertise or experience to meet that burden.A public adjuster has studied insurance policies and been licensed by the State of Texas to represent policyholders as their claim advocate. They understand concepts related to current replacement costs, property repair, business income loss, and other elements of property loss that are critical to getting a fair and propersettlement.
What if my contractor offers to handle my insurance claim?
By law, contractors—including roofing and restoration contractors-may not negotiate your claim with your insurance company. And, contractors may not hire adjusters to handle your claim. Insurance adjusting—especially public adjusting-requires special training and a license issued by the Texas Department of Insurance.
What should I expect my public adjuster to do?
1. Carefully review your insurance policy.Insurance policies can be long, detailed, andsometimes difficult to understand. Policies can change from year to year and often require that insurance claims meet specific conditions. Not meeting the conditions can result in your claim being denied or reduced payments for the property loss. A public adjuster makes sure that a claim meets all the requirements of your policy.
2. Thoroughly document your loss.The public adjuster should prepare your claim, including all estimates, inventories, photographs, and other factual informa¬tion that is required to prove the extent of your loss. They can inspect your property loss and submit a Notice of Loss to your insurance company.
3. Work with the insurance company adjuster to agree on the proper amount owed to you.Usually, the public adjuster and company adjuster settle the claim without controversy.
How much do public adjusters charge?
Responsible public adjusters often base their fees on a percentage of the final settlement—based on the time, energy, and expertise required to effectively represent their client. Important: In Texas, a PA’s fee is capped at 10% of the settlement of the claim.
Fees are negotiable, and are usually based on the size, location, and complexity of the property loss. Some public adjusters charge flat or hourly rates, but the total fee may not exceed 10% of the settlement of the claim. Much like accountants, realtors and other professional consultants, public adjusters offset their fees in the time they save their clients and in the amount of the claim recovery. The public adjuster does not receive a fee until the insurance company pays your claim.
Who sets the standards for public adjusters in Texas?
- The Texas Department of Insurance (TDI) is the state agency that regulates public adjusters. As in most states, Texas public adjusters are required to be tested, licensed, and current on continuing education requirements.To qualify for a license, a PA must demonstrate significant knowledge and competence in a broad range of areas related to property insurance, claims settlement and pertinent laws and regulations.
- The Texas Association of Public Insurance Adjusters (TAPIA) also plays an important role in assuring that Texas public adjustersmeet high standards for professional knowledge, competence, and achievement. Through its training programs, TAPIA sets its own high standards for professional knowledge, competence, and achievement. TAPIA enforces a strict code of ethics to promote the highest standard of integrity and professionalism.
How do I find a public insurance adjuster?
There are several ways to find a public adjuster:
- Ask friends and colleagues if they have worked with a public adjuster they would recommend.
- Look in local business directories for public adjusters in your area.
- Search the Internet for “licensed public insurance adjusters Texas.”
- Visit the members section of the TAPIA website at www.mytapia.org.
How do I select a public adjuster?
There are several important things to consider in choosing a public adjuster:
- License: Make sure they have a current license to practice in Texas. Ask for his or her license number. If you have any concerns that it’s not a real license, before you enter into a contract:
- Contact TDI by email or call 512-676-6500, OR
- Contact TAPIA by email or call 407-712-4979
- No conflict of interest: Beware of contractors who offer to handle your claim “for free” if you let them do the work (sometimes called “contingent agreements”). Since public adjusters must be licensed, such services are technically illegal. A professional public adjuster will prepare your claim without committing to a contractor. That leaves you free to collect your money and then decide with whom and how to spend it.
Also, beware of contractors and public adjusters who try to push you towards an attorney when there is no sign of a legal problem. Most property insurance claims can be settled if both parties act professionally.
- Experience: Public adjusters come from a wide range of backgrounds with different areas of expertise. Ask questions to make sure you select a public adjuster with experience that matches your specific loss. Feel free to ask for and talk to references.
- Professionalism: Do not sign a contract unless you’ve been given a thorough explanation of how the public adjuster will handle the claim, how they will communicate with you throughout the process, and how they will determine the fee you will pay. Never sign a blank contract.
- Comfort level: Be sure you are comfortable talking to and working with the public adjuster. It’s important for you to feel like he or she understands your needs and can communicate in a manner you’re comfortable with.
- Texas Association of Public Insurance Adjusters: TAPIA members subscribe to the highest level of professional conduct and all members adhere to a strict code of ethics. Find a list of TAPIA members on the TAPIA website www.mytapia.org.
What if I have a complaint about a public adjuster?
Contact the Texas Department of Insurance’s Consumer Protection group. To find out more, visit the Consumer Protection webpage.
FOR IMMEDIATE RELEASE
For More Information:
Kaye Beneke, Executive Director
Texas Association of Public Insurance Adjusters
Texas Association of Public Insurance Adjusters Urges Severe Weather Victims
to Get the Facts BEFORE Hiring Contractors to Rebuild or Repair
AUSTIN, TX –The Texas Association of Public Insurance Adjusters (TAPIA) cautions Texans coping with catastrophic losses resulting from the recent tornadoes and severe weather to “look before they leap” into arrangements with contractors to repair or rebuild their homes and businesses. “The only thing more heartbreaking than the original loss,” says TAPIA President Curtis Hordge, Jr., “is having that loss mishandled by someone who is not qualified or does not have your best interest at heart.”
One of the most important things an insured property owner needs to know is who can-and can’t-negotiate your claim with your insurance company, Wood says. “By law, contractors-including roofing and restoration contractors-may not negotiate your claim with your insurance company. Also, contractors may not hire adjusters to handle your claim as it is illegal and creates a conflict of interest.Insurance adjusting-especially public adjusting-requires special training and a license issued by the Texas Department of Insurance,” adds Hordge. “Don’t hire an unlicensed ‘insurance consultant’ or just anyone calling themselves an adjuster as it could become a second disaster.”
Insured property owners should be wary of contractors who offer to handle their claim “for free” if you let them do the work. This is sometimes called a “contingent agreement.” Since public adjusters must be licensed, such services are technically illegal. “It is difficult enough to master the manufacturer requirements and building codes without adding the
insurance policies, regulations, statutes and settlement procedures.
Likewise, beware of contractors and public adjusters who try to push you towards a lawyer when there is no sign of a legal problem. Most property insurance claims can be settled if both parties act professionally. On rare occasions, it may be necessary for an attorney to get involved if a coverage disagreement arises, or if the insurance company is simply not fulfilling its contract.
“Most people don’t know a lot about the details of their insurance policy,” Hordge says. “This may be the first time they will file a claim with their insurance company. There’s a lot to know and do to be sure of getting a fair and proper settlement. A time of crisis is a hard time to figure things out. That’s why many people turn to a public insurance adjuster (PA) for help.”
For those not familiar with public adjusters, TAPIA offers this overview:
- A PA represents the insured home or commercial property owner (the policyholder) in preparing, presenting, and settling a property insurance claim.A PA works only for the policyholder–not an insurance company, roofing company, repair company, or general contractor.
- In Texas, as in most other states, PAs are required to be tested, licensed, and current on continuing education requirements. To qualify for a license, a PA must demonstrate significant knowledge and competence in a broad range of areas related to property insurance, claims settlement and pertinent laws and regulations. The Texas Department of Insurance (TDI)regulates public adjusters.
- Insurance companies put the burden of proving a property loss on you—the policyholder. Few people have the necessary expertise or experience to meet that burden. A PA has specialized knowledge about insurance policies, current replacement costs, property repair, business income loss, and other elements of property loss that are critical to getting a fair and proper settlement.
- A public adjuster will: 1) Carefully review your insurance policy to be sure your claim meets all the requirements of your policy. 2) Thoroughly document and submit your notice of loss to the insurance company. 3) Work with the insurance company adjuster to agree on the proper amount owed to you. 4) Guide you in the claims process if additional steps are required.
Visit the TAPIA website (mytapia.org) for more information about PAs; a list of TAPIA members; a Q&A document, What You Need to Know about Public Insurance Adjusters;and other helpful information. For immediate assistance, send email to TAPIA@mytapia.org or call 512-299-6680.