Independent Adjusters – Staff Adjusters – Public Adjusters:
Who Are They and How Do They Help You When You Have a Loss?
When you suffer a property loss to your home or your business, you have an obligation to timely report that loss to your insurance agent and/or your insurance company. Your insurance company has an obligation to assist you in determining whether you have coverage for your loss, and if you do have coverage, then to assist you in returning your home or business to its pre-loss condition. But who does that insurance company send out to assist you? What is an insurance company adjuster and how do they differ from an independent adjuster and a public adjuster?
There is no question that your insurance company has a duty to act in good faith when investigating and adjusting your property loss claim. In fact, insurance companies may be held liable to you if they give you incorrect advice, they unduly delay your claim or they unduly delay responding to your inquiries and communications. They also have an obligation to make an offer to you in good faith, and the offer should be reflective of your loss. Whom does the insurance company send out to assist you with your loss, and what duties does that person have to you?
Many insurance companies employ what are known as “staff adjusters.” Staff adjusters are employees of the insurance company. Like the insurance company, the staff adjuster has a duty to act in good faith toward you and in the handling of your claim, and the insurance company may be held responsible for the actions of the staff adjuster, including if the staff adjuster gives incorrect information, does not timely respond to communications or otherwise acts improperly.
However, many insurance companies rely upon the services of independent adjusters. It is important to understand that independent adjusters do not work for you and owe no duty you, despite the fact that they are hired by your insurance company. The independent adjuster is working for your insurance company. Generally, independent adjusters may work for multiple insurance companies and are assigned by the company to a particular loss. Again, the independent adjusters do not have a duty to you, and they cannot be sued by you should they act in bad faith.
In 2015 the Connecticut District Court specifically held that “the Court agrees with the reasoning in these cases and concludes that the Connecticut Supreme Court would hold that an independent adjuster retained by an insurance company to adjust an insured’s claim does not owe a duty of care to that insured.” Danielson v. USAA Casualty Insurance Co. The Court noted there was a split among jurisdictions as to whether an independent adjuster can be sued for negligence. The court also noted the insured can still bring a bad faith claim against the insurer “as a source of recovery.” However, with respect to whether an independent agent can be sued in negligence or whether it has a duty to the insured, the US District Court was quite clear it does not.
Therefore, when your insurance company sends an adjuster to your home or business to investigate your claim and determine how much will be required to restore you to your pre-loss condition, find out whether the adjuster is a staff adjuster or an independent adjuster. If an independent adjuster has been assigned, you need to understand that individual may have no duty to you at all.
A public insurance adjuster, licensed by many states throughout the country, is an insurance adjuster who does not work for insurance companies. They are neither staff adjusters nor independent adjusters. Public insurance adjusters work exclusively for the benefit of the insured. A public insurance adjuster generally receives a percentage fee based upon the amount the insured recovers as a part of its claim. Because the public adjuster works for the insured only, the public adjuster has a duty to the insured and is responsible to you in the event it is negligent or provides you with the wrong advice, it acts improperly or it does not act in good faith. The benefit of hiring a public adjuster is that you know the public adjuster’s duty is only and solely to you. While public adjusters do charge a fee, insureds often find that the public adjuster’s assistance is well worth the cost.