LIKE ALL INDUSTRIES THERE IS GOOD AND BAD. LEARN AND EDUCATE YOURSELF BEFORE SIGNING ANY DOCUMENT GIVING AWAY YOUR INSURANCE MONIES.
This information will assist property owners who suffer fire damage, tornado damage, flood damage or any other claim related event. This guide will provide answers to some questions about Public Adjusters. We understand what you are going through. We know the bad apples in the public adjusting industry. The author of this blog, Jason Harris is an attorney and a public adjuster and has a unique perspective into this industry.
This following information was developed to provide consumers with general information and guidance about insurance coverage and laws and specifically how to choose a Public Adjuster. It is not intended to provide specific legal advice or a formal, definitive description or interpretation of the Illinois Department Insurance Policies. For specific information of the Illinois Department of Insurance on any policy – or on any issue you should contact the State of Illinois Department of Insurance.
You are urged to speak with an Attorney.
Fires, Tornado’s and natural disasters are unforeseen and unpredictable, and the recovery process can be overwhelming. Recently with the tornado’s touching down in Illinois property owners have and will be solicited by Public Adjusters claiming to perform miracles. Some can and others are simply bad apples to avoid.
- THERE ARE THREE TYPES OF INSURANCE ADJUSTERS. SOME WORK FOR THE PROPERTY OWNER ONLY. THEY ARE KNOWN AS PUBLIC ADJUSTERS.
If you suffer a loss and your property is insured, you will need to work with the insurance company adjuster and through the claims process. You may be approached by – a public adjuster – (not to be confused with the insurance company adjuster) who claims he or she can obtain a more favorable settlement from your insurance company. Understand the following at a minimum.
A “company adjuster” is an employee of your insurance company. They represent the interest of the insurance company and are paid by the insurance company. They will not charge you a fee.
An “independent adjuster” is hired on a contract basis by your insurance company to represent the insurance company’s interest in the settlement of your claim. They are paid by your insurance company. They will not charge you a fee.
A “public adjuster” does not work for any insurance company, is not a public employee, and does not work on behalf of the State of Illinois, Department of Insurance, or any other public agency. They work for you to assist in the preparation, presentation and settlement of your claim. A public adjuster or public adjusting company is retained when you sign a contract agreeing to pay a fee or commission based on a percentage of your settlement, or other method of compensation. In exchange for such the adjuster and company take on the responsibility of adjusting your claim fully, accurately and with due diligence.
- DO I HAVE TO HIRE A PUBLIC ADJUSTER TO DEAL WITH MY INSURANCE COMPANY?
No. However, many consumers find that the services offered by public adjusters can be of a benefit. Of course this is only true when and if that Public Adjuster is qualified. He or she has then knowledge and integrity to get the job done. The said state of affairs is however and unfortunately, many of the Public Adjusters in the Chicago Land area are not qualified, and do not have the knowledge.
- IS A PUBLIC ADJUSTER’S FEE COVERED IN MY INSURANCE POLICY?
No. Insurance policies do not cover the fees of a public adjuster. However, a good Public adjuster will earn his fee in the recovery he makes by increasing the claim. The bad ones simply hurt the consumer further. This is why one is always urged to review the contract and understand clearly what they have agreed to. Many Public Adjuster are simply contractors who do not bother to negotiate the claims. Then when the insured finds that out later they are charged huge fees.
- HOW DOES A PUBLIC ADJUSTER GET PAID?
You must pay for the services provided by a public adjuster. Typically, public adjuster’s charge a fee equal to a certain percentage of the claim paid by your insurance company.
- ARE PUBLIC ADJUSTER FEES NEGOTIABLE? CAN TRUST THEM? SHOULD I RUN A BACKGROUND CHECK
Yes. All fees charged by the public adjuster can and should be negotiated. Take your time and interview a few companies and of course seek legal counsel to do a background check on any company you are considering. Many public adjusters in Illinois tend to be simply repair contractors. Some have not even passed the public adjuster exam and found loopholes in which to get licensed. Some Public Adjusting companies are not even controlled or owned by a Licensed Public Adjuster but rather a contractor, who may or may not have been charged with insurance fraud or other crimes. The simple fact is you need to do your homework, meet the owners, and speak with an attorney to run a background check on any one you are thinking about trusting hundreds of thousands of dollars with. The person you hire will have their name place on your insurance settlement check.
- DO I HAVE TO SIGN A CONTRACT WITH A PUBLIC ADJUSTER?
Yes. Illinois law requires the public adjuster to provide you with a written contract that specifies the services the public adjuster will provide for you and any salary, fee, commission, compensation or other consideration he or she will receive for those services. The contract you sign with the public adjuster is binding and can be canceled by certified mail within (usually) 5 business days after the date the contract was signed. Public Adjuster contracts can also be cancelled after the time period expires if it can be shown they failed to follow the law. For example historically public adjusting contracts have been held to be null and void by the department of insurance when signed at night.
- ARE THERE RESTRICTIONS ON WHEN A PUBLIC ADJUSTER CAN SOLICIT ME?
Yes. A public adjuster cannot solicit you while a “loss-producing occurrence,” such as a fire, is continuing or while the fire department or its representatives are engaged at your property. A public adjuster is also prohibited from soliciting your business between the hours of 7:00 p.m. and 8:00 a.m. If a public adjuster approaches you during these times you should report him or her to the Department. If you have been approached by a Public Adjuster during these illegal hours do not sign a contract with them and immediately report them to the Illinois Department of Insurance.
Call Consumer Services Section at (312) 814-2427 or Consumer Assistance Hotline Toll Free at (866) 445-5364 Or visit website at http://insurance.illinois.gov
- ARE THERE STANDARDS OF CONDUCT THAT A PUBLIC ADJUSTER MUST FOLLOW?
Yes. A public adjuster is required to serve with objectivity and complete loyalty for your interests alone and to render to you such information, counsel, and service as will best serve your insurance claim needs and interests.
- DOES A PUBLIC ADJUSTER HAVE TO BE LICENSED?
Yes. Illinois law requires public adjusters to be licensed with the Department of Insurance. Contact the Department at (866) 445-5364 to verify that the public adjuster is licensed and in good standing before signing any contract. Make sure you see a proper License. Also ask if they passed the Public Adjusters Exam. Some have not and still have been granted a License. Check to see if they have ever been charged with a crime. Importantly make sure the person who is signing the public adjusting contract is a licensed public adjuster. Recently Chicago has seen one or more companies sending out chasers with pre-signed contracts.
- WHERE CAN I FIND MORE INFORMATION?
Of course, you can reach out to our law offices. We are happy to talk and inform you of your options. Useful information on insurance coverage and how to handle the insurance claims process can be found in the Illinois Department of Insurance’s consumer fact sheet entitled “When Disaster Strikes – What to do After an Insured Homeowners Loss.” The fact sheet can be found on the Department’s website, http://www.insurance.illinois.gov
A list of agencies and organizations available to help ease the burdens caused by a major disaster can be found on the internet.
Additional resources provided by the author