DennisBeaverApril 2, 2016 • By Dennis Beaver

After the first El Nino storm of this year, Doug, a Central California reader phoned in a panic, his trembling voice explaining:

“Two days ago a neighbor’s tree crashed into our home, demolishing it, injuring our baby daughter and starting a fire. A neighbor heard the noise, called 911 and the Fire Department came out, followed by an insurance adjuster — a public adjuster. He asked me who I was insured with, and when I told him, he shook his head and said that I would never be treated correctly.

“He said that could become his clients, and get us all if not even more that what we are entitled to. His fee is only 10 percent, but I needed to move quickly, before our own company gets involved and cheats us. I was in shock and signed his contract.

“The next day my insurance company’s adjuster came out, reassured me that we were in good hands with her, immediately arranged for us to stay in a hotel and handed me a check for living expenses. I want to stay with my company — Can I get out of that contract?”

The average homeowner does not need a public adjuster

A pubic adjuster performs the same task as an adjuster who works for an insurance company, but is paid by the policyholder, usually a minimum of 10 percent of the claim. They monitor fire and police radio transmissions and, like sharks smelling blood, race to the scene of a fire or other property loss, often scaring already shaken up people into hiring them.

It can be a huge mistake, as Southern Florida-based independent insurance adjuster Peter Crosa explained to You and the Law. He conducts well-attended seminars for adjusters and the disaster restoration industry nationwide.

“Retaining a public adjuster at the very outset of a claim can be viewed as an adversarial act by your insurance company. Additionally, unscrupulous public adjusters will try to convert a legitimate $20,000 claim to an exaggerated $50,000 claim and take ten percent of the $50,000 if they get it. But the company may only pay you the $20,000, and then you end up with a real loss, having to pay the public adjuster,” he points out.

Over the years, You and the Law has been contacted by readers who had large losses where policy limits payments were offered by their own insurance company within a few days of the incident. But they had signed a public adjuster’s contract and for doing virtually nothing were on the hook for 10 percent!

“To prevent that from happening,” Crosa advises, “See what your own insurance company offers before retaining a public adjuster. In reality, for a basic claim, under $100,000, the average homeowner does not need a public adjuster. If it is a mom and pop couple who have been with the same insurance company for many years, chances are that they will be treated very well.

“But if it is a person who has a history of claims and questionable financial means, we’ll see that immediately. These people consider an insurance claim as an opportunity for income and will generally only use public adjusters. We see this pattern over and over again, especially with restaurant or night club fires.

You and the Law learned that the inside joke among claims adjusters is a question: “What do incompetent restaurant owners often have? Answer – Two failures and a fire!”

There is a reason that restoration companies such as Servicemaster or ServePro have little nice to say about public adjusters. “They try to slash their bills, while the insurance company pays in full,” Crosa stated. We independently confirmed his observations.

Lawyers who handle insurance claims will tell you that the last person in the world who you want to display a hostile attitude towards is your insurance company’s adjuster. Crosa explains the result of a “You-are-going-to-pay-me-no-matter-what” attitude:

“This puts the adjuster on the defensive. Their job is to control expenses, not cheat you and they have the checkbook. Your attitude should be, ‘Please tell me what I can do to help you with this claim?’ It is always better to come to the adjuster seeking help, rather than telling what you are going to do.”

“Finally, if you involve your lawyer out of concern, as a friend who just wants to make sure that you are doing what is necessary, this is good. Always remember that adjusters do not respond well to intimidation. They know how to drag their heels, so this is no time for a bull in a china shop,” he cautions

And Doug, our reader? He was saved by the three day cooling off period.

Dennis Beaver practices law in Bakersfield and enjoys hearing from his readers. Contact Dennis Beaver.