Dealing with the aftermath of significant storm or fire damage to your ministry’s property can be stressful and unsettling. Naturally, you’ll want to resume ministry activity as quickly as possible. One of your first calls should be to your insurance agent or insurance company. They can help get the claim process started.
An important step in the claim process is getting an estimate for the amount of loss. Once you get an estimate, you’ll need to work with your insurance adjuster. The adjuster is responsible for investigating, documenting, and evaluating the loss. The adjuster will also work with the insurance company to determine whether the loss is covered by your policy, and if so, the appropriate insurance payment.
This article will help you understand the role of the adjuster during an insurance claim, the types of adjusters, and some important considerations when working with an adjuster.
According to the National Association of Insurance Commissioners (NAIC) State Licensing Handbook, an adjuster is “a person who investigates claims, determines coverage, examines relevant documents, and inspects property damage. An adjuster may also determine the amount of a claim, loss or damage payable under an insurance contract or plan. An adjuster often settles or negotiates settlement of the claim.”
There are three types of insurance adjusters:
A company adjuster is an employee of your insurance company. They should help walk you through your claim and keep you apprised of the process. A company adjuster will investigate your insurance claim to determine the extent of the insurance company’s liability according to your insurance policy.
Within the boundaries of your insurance policy, which is a legal contract, the company adjuster will verify insurance coverage and determine a fair amount for settlement. Company adjusters are required to be licensed and obtain continuing education credits to maintain their licenses. There is no fee to the policyholder for the services provided by a company adjuster.
An independent adjuster is an independent contractor that your insurance company pays to assist in the investigation of your claim. When insurance companies need someone on site to inspect a policyholder’s property, they contact independent adjusters in the area where the claim occurred.
The independent adjuster inspects the damage and provides a report to the insurance company of any damage found, along with information and documentation to assist the insurance company in determining whether there is coverage under your policy, and, if so, the amount of payment to be made. There is no fee to the policyholder for these services as they are part of the claims adjusting costs to the insurance company. Independent adjusters are required to be licensed in most states, and like company adjusters, are required to obtain continuing education credits throughout the year.
A public adjuster is hired by the policyholder to assist in quantifying and resolving the claim on the policyholder’s behalf. The public adjuster works for the policyholder and the policyholder is charged a fee for their services. Although some states require hourly fees, a public adjuster typically charges a commission based on a percentage of the final settlement amount. In many states, a public adjuster may charge 10% of the final settlement amount, but that rate can be higher or lower. This commission is not covered by your insurance policy. If you plan to repair or replace all your damaged property, your insurance proceeds would go toward repairing or replacing your damaged property, requiring you to pay the public adjuster out of pocket. Public adjusters are required to be licensed in most states and require continuing education credits throughout the year.
When you make an insurance claim to your insurance company, it is assigned to a company adjuster or an independent adjuster. The adjuster employed by the insurance company will contact you to begin the claims process. Many claims can be processed by the adjuster with documentation you provide for your claim. Examples are theft losses, lightning damage to contents, glass breakage, and other similar damage. You may be asked to provide photos of the damage and other documentation such as estimates or invoices for repairs or replacement of the property.
The independent adjuster will inspect the damage and submit a report to the insurance company so they can determine what is covered by your policy and how much can be paid, based on the policy coverage and limits you purchased.
Most policyholders can resolve their property claims by dealing with their insurance company and the assigned adjuster. However, you have the right to hire a public adjuster to help present your claim.
State insurance departments suggest that the policyholder try to settle their claim with the insurance company before hiring a public adjuster. In most states, it is illegal for a contractor or other vendor to act as a public adjuster in representing the policyholder.
If a policyholder chooses to hire a public adjuster to handle the claim on their behalf, there are some things to consider:
Remember, if you hire a public adjuster, generally you agree to pay them a percentage of the insurance benefits they recover on your behalf. Many insurance departments provide guidelines on using public adjusters. Policyholders should review these guidelines online at the department website or contact the department before entering into a contract or formal agreement with a public adjuster if they have any questions. The NAIC has links on its website linking to all the state offices at https://www.NAIC.org/state_web_map.htm.
Posted February 2023
The information provided in this article is intended to be helpful, but it does not constitute legal advice and is not a substitute for the advice from a licensed attorney in your area. We strongly encourage you to regularly consult with a local attorney as part of your risk management program. Your organization is responsible for compliance with all applicable laws.
