126.96.36.199.4 Public adjusters
Public adjusters are individuals who work with insureds to help increase their claim award in exchange for a percentage of the recovered claim amount. Although there are reputable and ethical public adjusters who do good work to help disaster survivors, this is an area where storm-chasing scammers look for vulnerable people whose insurance funds they can siphon off.87 Most states require public adjusters to obtain a license in the state where they offer services, and some states limit the allowable percentage that public adjusters can charge for services. 88
Unfortunately, in some cases, the public adjuster provides a contract to the policyholder to fully handle the claim from day one. The public adjuster may contact the insurance company to request that insurance funds be sent to the adjuster’s name and address, does little or no work, and then takes a percentage of the claim award after the insurance company’s own inspector submits the claim award recommendation. In other cases, the public adjuster signs a contract after the original claim was denied or underpaid; they have the homeowner take photos and request subsequent inspections, again doing little or no work, and then take a percentage of the increased claim award.
Cases against scam public adjusters are worth considering. Because most public adjusters are storm-chasers, they do not obtain licensure in the states where they operate and violate other state laws of which they are unaware. State attorneys general and department of insurance offices should be notified about these issues, as well as the Federal Trade Commission.
87 Dan Rutherford, CFPB, Protecting and rebuilding your finances after a disaster (Nov. 6, 2012), available at https://www.consumerfinance.gov; CFPB, How do I avoid scams and fraud after a disaster? (Aug. 29, 2019), available at https://www.consumerfinance.gov.
88 A state department of insurance regulations can provide information about relevant state requirements or lack thereof.