The two outsized storms this year — the derecho in summer and Hurricane Sandy in the fall — damaged a lot of properties and gave many people their first experience with public adjusters.
Most have been relieved to have a public adjuster represent them in assessing and documenting storm-related losses, and negotiating the settlement of the claim with the adjuster working for the insurance company. Others have had problems with their public adjusters.
Cindy Towner, of Northfield, said her public adjuster settled for a fraction of what she lost in the summer storm and won’t return her phone calls.
Joseph Finnegan, of Mays Landing, said his adjuster had some work done without his approval, work Finnegan felt was unnecessary. Now the adjuster won’t sign the settlement check unless he’s paid for that work first.
The more typical experience is that of Greg Fuller, of Brigantine, who had 18 inches of water in his family’s first house that he kept as a rental.
“I was in disarray. I didn’t know where to begin,” he said.
His adjuster described the path from substantial damage to restoration, told him what to do and how to handle his tenant, assumed responsibility for work on the claim, and made him feel confident everything was moving in the right direction, he said.
Public adjusters are lightly regulated, licensed by the states in which they operate. New Jersey requires public adjusters to pass a test and secure a $10,000 bond.
The state doesn’t cap public adjuster fees — which are a percentage of the claim settlement — although Assemblyman Jerry Green, D-Union/Middlesex/Somerset, said last month he would propose such a limit.
Guidelines on choosing a public adjuster typically come from established public adjusters themselves. They often recommend checking on experience, licensing and prior clients, and warn about adjusters who over-promise, push a contract or are connected to a contractor or remediation company.
The National Association of Public Insurance Adjusters, founded in 1951, started a professional certification program in 1986, but it didn’t catch on enough to show up in typical guidelines for choosing an adjuster.
Right after Hurricane Sandy hit, the association announced it was relaunching the certification program with the help of The Institutes, which administers another insurance-related certification, the chartered property casualty underwriter designation.
Applicants for public adjuster certification will need to take courses in insurance, claims, coverages and ethics, with exams for the designation starting next year.
The intensity and damage of the summer derecho and fall hurricane were new to many home and business owners, and so was dealing with the subsequent significant insurance claims.
Cindy Towner said the fallen tree and wind damage to her fence, shed and built-in barbecue grill was the first homeowner’s insurance claim she’s ever made.
Someone recommended calling a public adjuster, and when she did, the adjuster led her to believe she would get a 40 to 60 percent bigger settlement if he handled the claim for her, she said.
“I wound up receiving $837 and the cheapest estimate for fixing the shed roof alone is $900,” Towner said. She figures her total loss is about $15,000.
She said the insurance company won’t deal with her, since she has her own adjuster. So besides repeatedly calling her adjuster and his supervisor, she is filing complaints with the Better Business Bureau and the state Attorney General’s Office.
“I’m sorry I ever went with them,” Towner said. “I’m more mad at myself that I was suckered into it.”
Joseph Finnegan found his public adjuster in the phone book, the first time he ever sought such services.
Finnegan said he asked how long the adjuster had been in the business and how much he charged, and was told 25 percent of the insurance settlement. He hired him.
The first thing that worried Finnegan, he said, was that it turned out the adjuster’s firm is owned by or related to a building company — which might create an interest in steering insurance settlements into construction work.
“I found that pretty strange. Is that a conflict of interest? Maybe not,” he said.
Finnegan agreed to let the adjuster get a Dumpster for the debris from the derecho damage to the home and a storage pod for possessions.
He said he later found out the adjuster brought “three or four guys over” to move stuff, which Finnegan feels he didn’t agree to and wasn’t necessary.
“There was no reason to take stuff away to begin with,” he said.
Now, Finnegan said, he has a settlement check from the insurance company for $16,000, but his adjuster — whose name is also on the check — won’t sign it until he gets paid for the Dumpster, the pod and the work of his crew. That’s on top of the $4,000 the adjuster will get as his 25 percent fee.
As of the past week, the dispute was unresolved and Finnegan said he had filed a complaint with the state Department of Banking and Insurance.
A hurricane specialist
Greg Fuller has lived all of his 31 years in Brigantine. Until late October it seemed like the ideal place for he and his wife to raise their 2-year-old daughter.
Hurricane Sandy demolished not just a lot of property but also a lot of sense of security and well-being.
The day after the storm, Fuller kayaked to the house, tied up at the porch railing and immediately saw the water line on the outside wall.
From that moment the anxiety within him grew until he started having trouble sleeping at night. With his rental income gone, the cost of repairs could easily upend the life he and his wife had worked hard to build.
Fuller had handled small insurance claims, but he figured the damage to his house near the golf course in Brigantine was in the tens of thousands of dollars.
A family member recommended he call Dan Young, a public adjuster who once lived in Galloway Township and whose office is in Riverside, Burlington County.
Young quickly determined that all the major damage to Fuller’s house was from flood water.
“He said, you handle the homeowner’s insurance claim, and he took over the flood damage claim,” Fuller said.
Young instructed him to take steps to prevent further damage, for example tearing out the wet drywall and insulation, and in two weeks Fuller got his first claim check to cover the early steps in remediation.
Young, 41, has been a public adjuster since 1994. His firm, the Public Adjuster Inc. (www.thepublicadjusterinc.com), has three adjusters, each trained and accredited by Vale National Training Center.
“Since 2004, I’ve just done hurricane claims. I did claims in Florida that year when four hurricanes hit the state, and then Hurricane Katrina claims in 2005,” he said. “I bought a house and moved down to Louisiana for a year and a half, and then flew back and forth for another six months.
“I handled about 500 claims from Katrina, and got settlements as big as $25 million down there,” he said.
Young said that having lived at the shore, he got a lot of calls from friends after the storm and he’s now handling about 100 claims from Hurricane Sandy, mostly flood insurance claims.
“I’ve been living at Harrah’s casino hotel since they reopened. They’ve been very nice and knocked the rate down for me,” he said.
Period of adjustment
Young said the most common misconception about flood insurance claims is that since they’re all policies under the federal program, “the settlement should be cut and dried. But there’s a world of difference between what you could and should settle for.”
He showed the claim paperwork for another Brigantine homeowner, revealing the flood insurer’s first estimate of damage was $44,000. With more documentation from Young, the insurer raised the estimate to $63,000.
After further discussion of coverage and documentation, the adjuster for the flood insurer put the damage at $91,000 — more than double the original estimate.
“Same house, same adjuster,” Young said.
One problem with Sandy is that since the storm hit such a large swath of the nation’s most densely populated area, the number of damaged properties and claims exceeded the number of adjusters available to work for insurers. They need to be certified by the national flood insurance program (a certification not available or intended for public adjusters).
“They’re trying to certify brand new people and if you’re one of the policyholders who gets a brand new adjuster, you might have a problem,” he said.
Another challenge for home and business owners is finding a public adjuster with experience handling catastrophic losses rather than the typical smaller homeowner’s claims or fire damage.
“Everyday claims adjusters want to be catastrophic loss adjusters, and the homeowner will pay for that education,” he said.
Public adjusters typically charge a higher percentage of the claim to handle smaller claims. Young decided to charge all of his Sandy customers the lowest rate of 10 percent.
“Some everyday claims adjusters are keeping their fee structures the same. I’m seeing charges of 25 percent when someone’s house was wiped out instead of the industry norm of 10 percent,” he said.
On Friday, the Christie administration warned public adjusters to keep their fees reasonable, even though there is no cap in New Jersey.
Ken Kobylowski, acting insurance and banking commissioner, said the department will try to monitor public adjuster fees and make sure they are related to the services they perform.
Young said experience with flood insurance is essential to handling that type of claim, not just learning flood policies in depth, but also how insurance adjusters are trained and instructed to interpret them.
For example, flood insurance policies typically say they don’t pay for mold damage. “But the guidance manual says we’ll provide reasonable coverage if you couldn’t get reasonable access to the property, so it will cover mold under some circumstances,” he said.
Young said he’ll often sit for hours with insurance adjusters, working on a claim. Sometimes the challenge is not the other adjuster, but the examiner at the insurance company.
The goal is to get to a good settlement.
“If they don’t give me one thing, they might give me something else to compensate,” he said. “There is always going to be a can of soup missing from your settlement, but if you’ve got the money to rebuild, that’s the important thing.”
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