Like many things in the property insurance industry, what seems like a relatively straightforward question has a very nuanced and not-so-simple answer. Finding out how much a Public Adjuster costs depends primarily on what state your claim is in. The extent of the damage is also a factor in determining the cost. Because Public Adjusters are licensed state-by-state, the guidelines for fee caps (i.e. the maximum rates that Public Adjusters are allowed to charge) or lack thereof, change depending on where the property is located. Speaking generally, Public Adjusters might charge anywhere in the range of 5% to 40% of the total settlement won. The fee is usually relative to the size and type of claim, and can be deducted directly from your settlement.
To best assist our clients and the general public, Tiger Adjusters has created a Public Adjuster information database featuring all 50 states. It includes:
Tiger Adjusters: Public Adjuster Information Database
Fee caps & Contingency Fees
In Texas, one of the states with the lowest fee caps, “Public Adjusters can charge up to 10% of the total amount the company will pay for your claim” and “the fee can be based on the total amount of the claim settlement, not just the amount you’re disputing,” (Texas Department of Insurance, n.d.). Meanwhile in some states without fee caps, you may see fees of up to 35-40% of newly recovered settlement funds.
While the fees vary state to state, contracts with Tiger Adjusters are only paid on a contingency basis, which means we only get paid when/if we recover additional settlement money for you. Once you, the policyholder, accept a final offer from your insurance company your Public Adjuster receives compensation. Note that our fees are deducted from your settlement amount.
Contingency payment is used frequently by Public Adjusters and in some states, there are even laws that prohibit Public Adjusters from accepting any payment until a claim is settled.
Other payment structures
But a percentage-based rate is not the only payment structure used by Public Adjusters. Sometimes a Public Adjuster might charge a flat fee for a larger, more straightforward claim or an hourly rate. Some states also cap allowable fees, as mentioned above (Schlichter, 2024). Note that often hourly rates can vary based on location, experience, additional training and certification, and policy type.
In some situations where a commercial property owner has a portfolio of properties, Public Adjusters may also choose to deploy a retainer fee structure in anticipation of regular/ongoing work.
Regardless of the fee structure or the state that the claim is in, all fee and payment schedule details should be clearly spelled out in the contract or Letter Of Representation (LOR) that you sign with your Public Adjuster. For example, according to the Illinois Department of Insurance (n.d.), “Illinois law requires the public adjuster to provide you with a written contract which has been approved by the Director of Insurance.The contract should specify 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.”
State guidelines vary greatly
You should be aware that “there are certain parts of the U.S. where Public Adjusters can’t help with home insurance claims at all. For example, Public Adjusters in Kansas can work only on commercial claims, while Public Adjusters aren’t permitted at all in Arkansas,” (Schlichter, 2024). Be sure to do your research and look to appropriate state Department of Insurance resources for guidance on finding a licensed Public Adjuster in your state.
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References
Texas Department of Insurance (n.d.). Public adjusters: What to know before you hire one to help with your claim. Retrieved July 10, 2024, from https://www.tdi.texas.gov/tips/public-adjusters.html#:~:text=How%20much%20do%20they%20cost,will%20pay%20for%20your%20claim.
Schlichter, S. (2024, January 30). What Is a Public Adjuster, and Do You Need One? NerdWallet. Retrieved July 10, 2024, from https://www.nerdwallet.com/article/insurance/public-adjuster-insurance.
Illinois Department of Insurance (n.d.). Commercial Property Insurance Public Adjusters. Retrieved July 10, 2024, from https://idoi.illinois.gov/consumers/consumerinsurance/commercial/commercial-property-public-adjusters.html#faq-isapublicadjustersfeecoveredinmyinsurancepolicy-faq.
