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Dealing with your insurance carrier after a wildfire can be time consuming and emotionally stressful. Some folks end up hiring a public adjuster to handle their insurance claim for them. A public adjuster is skilled at maximizing the client’s recovery against the client’s insurance carrier while making the whole insurance claims process easier on the client. But is hiring a public adjuster a good idea?
Maybe for some insureds, but not for most.
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To maximize your insurance claim, you will likely have to fill out a personal property inventory, listing everything you lost in the fire and its value. You can certainly fill out an inventory yourself. There are many personal property inventory forms available online. But it is no fun and, in fact, can seem like an overwhelming project. Clients report to us that that a public adjuster’s help makes the process much easier. The public adjuster charges for the help, of course. The charges can be 6% of the policy benefits paid or even more. But for some clients, the help is worth it.
Insurance is never enough to cover all an insured’s losses resulting from a wildfire such as the Dixie Fire. For example, insurance won’t pay for things like the loss of sentimental items, tree damage, lost income, or emotional damages. For that, you must make a Dixie Fire claim against PG&E.
Folks think that because they never would have had to hire a public adjuster but for the wildfire, PG&E should reimburse them for those costs as well. But the cost of the public adjuster is one thing that PG&E doesn’t have to pay for. So, money an insured pays to a public adjuster is gone forever.
Every dollar the public adjuster gets from your insurance carrier is a dollar that PG&E doesn’t have to pay you. So, in some senses, the public adjuster works for PG&E, not you.
Imagine two insureds, John and Mary. Each has a claim against PG&E worth $600,000. They have identical insurance policies. John obtains from his insurance carrier $400,000. That means PG&E owes him $200,000. Thus, between the insurer and PG&E, John recovers a total of $600,000. Mary hires a public adjuster. The public adjuster obtains from her insurance company $500,000, $100,000 more than John recovered. Due to the fine work of the public adjuster, PG&E owes Mary only $100,000. PG&E is grateful for the work of the Public Adjuster that Mary hired, because it resulted in PG&E owing her less. Trouble is, Mary must pay the public adjuster, not PG&E. John, not having hired a public adjuster, ends up better off.
Public adjusters make the insurance claim process go easier. But even if the public adjuster succeeds in getting more money from the insurer, it’s not at all clear that the insured is better off.