If you’re exploring the option to hire a public adjuster, cost is certainly at the top of the list of your questions to ask. A number of factors influence an adjuster’s rate: the adjuster’s expertise, state law, the type of claim, as well as its size, scope, and status. There’s no one-size-fits-all answer. Here are the common fee structures for public adjusters, and what you should know before signing a contract.
Public adjusters fees can fall under a number of different rate structures, ranging from contingency-based rates to flat fees.
Most public adjusters work on contingency, which provides an incentive for the public adjuster to acquire the best possible settlement on your behalf. Typically, the larger the claim, the smaller the percentage. For losses $100,000 or more, standard adjusters charge between 10-20% of the settlement. For losses less than $100,000, the fee is 25-40%. Public adjusters charge a higher percentage for smaller claims because, regardless of the size of the loss, the adjuster’s overhead costs are the same. For that reason, some adjusters choose not to take on smaller claims at all.
While taking a percentage of the settlement is the most common fee structure, it’s not the only one. Some adjusters charge on a regressive scale. So, they may charge 20% of the first $100,000, 15% between $100,001 and $200,000, and 10% of any amount on top of that.
Others charge a percentage of the improved settlement. For instance, let’s say an adjuster is able to recover an additional $30,000 on a claim that was originally valued at $100,000. They may only charge 30% of the $30,000. With this approach, known as “new money only,” the adjuster takes on more risk, so the contingency fee tends to be higher.
If your claim is straightforward, the adjuster may choose to charge a flat rate. The flat rate removes any unpredictability about price. However it’s important to be clear on what exactly the fee will cover, so there are no surprise costs down the road.
In some rare instances, the adjuster may charge an hourly rate. The market hourly rate for a public adjuster is $350, on the low end. Hourly fees are uncommon among adjusters because it’s hard to predict how much time it will take to negotiate a claim. It’s difficult for you and the adjuster to really gauge if the contract is of value.
For many years, the common answer to questions about what adjusters charge was, “The standard fee for an adjuster is 10%.” But applying the 10% contingency rate to all claims is an old-school approach. Before the 1970s, public adjusting firms worked almost exclusively on large claims. The firms themselves were large, and charging a standard 10% rate for the major claims they covered worked for their business model.
However, smaller firms have emerged, and they have the flexibility to cover smaller claims. The prevalence of smaller adjusting firms gives more property owners access to public adjusters, but the old-school rate structure no longer fits all situations.
A reputable public adjuster will be up front about their rate. It’s critical that both parties are on the same page about whether the adjuster will handle a portion or all of the claim. For instance, if your claim process is well underway, you and the adjuster need to be clear about whether their fee is based on “new money only” or the total value of the settlement. Also, if you feel that an adjuster’s fee is too high, you can negotiate the rate down.
In addition to being transparent about their rates, your adjuster should share their credentials with you. Public adjusters are licensed by the state, and may also be members of industry organizations like the National Association of Public Insurance Adjusters. You can verify their credentials by using your state’s license lookup tool, typically found on the department of insurance’s website.
Finding the best public adjuster for your claim may seem like another item on your already long to-do list. You’re already dealing with your insurance company and the event that led to the claim, on top of your day-to-day tasks. But taking the time to find a good public adjuster is worth the effort. An experienced, dedicated adjuster will save you valuable time and ensure that your settlement is more than fair.
For nearly 40 years, Ironclaim’s adjusters have helped businesses, government agencies and homeowners secure the best possible settlement for their claims. From inventorying your losses to negotiating with your insurance company, we make sure our clients don’t leave a single dollar on the table. To get help with your claim, contact one of our experts today.