As a former flood certified claims adjuster, I cannot think of any reason for an adjuster or anyone in the process to “lowball” a flood claimant. The companies are reimbursed by the FEMA program for the claims paid, plus the companies get paid a handling fee. The adjusters earn more based on the ultimate settlement value of the claim paid to the homeowner. The only abuse I encountered was when the “public adjusters,” who apparently thrive in New Jersey and New York, were employed by the insured. Whether it was the intent of the insured homeowner, those claims handled by “public adjusters” were inflated as to value and in many cases, resulted in delays and increased expenses to the insured and the insurers handling the claim. Those increased expenses were ultimately paid by FEMA, and ultimately the tax paying public
FEMA is in debt 24 BILLION dollars to the U.S Treasury for the National Flood Program so I would assume that there would be motives for people involved to underpay claims. I’m sure FEMA executives and many insurance company executives are very good friends. If they expand flood zones and underpay claims they can chip away at that debt. Can’t blame it on the PA’s, that is just ludicrous. Besides a few bad apples as with any industry, the PA’s are the only one’s truly looking out for the best interest of the insured’s before attorneys get involved. You say “Inflated Prices” but realistically they are most often “Accurate Prices”. They just appear inflated compared to the low ball offers you may be used to seeing.
As a current flood adjuster with the NFIP and looking at both comments from Fed Up and Earlybird, 95% of all PA’s are in the game for their 10-15% share of the flood claim total and could not give a hoot about the insured. I would gather that at least 90% of the PAs out there do not have a FCN number AND that they are not familiar with the Dwelling, RCBAP, or GP policies. The bottom line is (from my standpoint) is that my scopes held within 5% when settled compared to inflated PA estimates that always included NON COVERED items like matching upper cabinets, painting ceilings not touched by flood, including decks above 16 sq. ft, covering contents in the basement above washer, dryer, freezer, food in freezer, and window mount ACs.
Going further, the amount of any extra monies that I did include from a PA RARELY exceeded 5% and typically, my scopes had more covered items and actually would include items missed by the PAs. So, the bottom line for my insured’s was to pay them fairly AND I also told them that if ANY of their amounts paid for repairs exceeded the settled amount we could easily do a supplemental claim. This was provided to them verbally and IN EMAIL communications. I had some supplement claims to complete but not many. As adjusters, if we find more supplement damages or have paid invoices for repairs, we make more money.
So, my thoughts are that at least 75% of all PAs are in the game to make their 15%. On private HO policies, a PA is needed because of the tendency to upderpay by non-independent carrier adjuster. THIS IS NOT THE CASE on the flood program. We are all paid on commission so the more covered damages found, the higher a commission that is paid.
Finally, every single one of the claims handled by a PA resulted in a longer settlement time with no more than 5% additional monies paid to the insured. The net effect is the homeowner gets an effective 10% reduction in their claim than if they had worked directly with me as the assigned adjuster.
In conclusion, there is NO incentive for an adjuster to skimp or cut out payments to the insured. Why would we cut our commissions? The same holds true for the WYO carrier and their cut as well.
As a former flood certified claims adjuster, I cannot think of any reason for an adjuster or anyone in the process to “lowball” a flood claimant. The companies are reimbursed by the FEMA program for the claims paid, plus the companies get paid a handling fee. The adjusters earn more based on the ultimate settlement value of the claim paid to the homeowner. The only abuse I encountered was when the “public adjusters,” who apparently thrive in New Jersey and New York, were employed by the insured. Whether it was the intent of the insured homeowner, those claims handled by “public adjusters” were inflated as to value and in many cases, resulted in delays and increased expenses to the insured and the insurers handling the claim. Those increased expenses were ultimately paid by FEMA, and ultimately the tax paying public
FEMA is in debt 24 BILLION dollars to the U.S Treasury for the National Flood Program so I would assume that there would be motives for people involved to underpay claims. I’m sure FEMA executives and many insurance company executives are very good friends. If they expand flood zones and underpay claims they can chip away at that debt. Can’t blame it on the PA’s, that is just ludicrous. Besides a few bad apples as with any industry, the PA’s are the only one’s truly looking out for the best interest of the insured’s before attorneys get involved. You say “Inflated Prices” but realistically they are most often “Accurate Prices”. They just appear inflated compared to the low ball offers you may be used to seeing.
As a current flood adjuster with the NFIP and looking at both comments from Fed Up and Earlybird, 95% of all PA’s are in the game for their 10-15% share of the flood claim total and could not give a hoot about the insured. I would gather that at least 90% of the PAs out there do not have a FCN number AND that they are not familiar with the Dwelling, RCBAP, or GP policies. The bottom line is (from my standpoint) is that my scopes held within 5% when settled compared to inflated PA estimates that always included NON COVERED items like matching upper cabinets, painting ceilings not touched by flood, including decks above 16 sq. ft, covering contents in the basement above washer, dryer, freezer, food in freezer, and window mount ACs.
Going further, the amount of any extra monies that I did include from a PA RARELY exceeded 5% and typically, my scopes had more covered items and actually would include items missed by the PAs. So, the bottom line for my insured’s was to pay them fairly AND I also told them that if ANY of their amounts paid for repairs exceeded the settled amount we could easily do a supplemental claim. This was provided to them verbally and IN EMAIL communications. I had some supplement claims to complete but not many. As adjusters, if we find more supplement damages or have paid invoices for repairs, we make more money.
So, my thoughts are that at least 75% of all PAs are in the game to make their 15%. On private HO policies, a PA is needed because of the tendency to upderpay by non-independent carrier adjuster. THIS IS NOT THE CASE on the flood program. We are all paid on commission so the more covered damages found, the higher a commission that is paid.
Finally, every single one of the claims handled by a PA resulted in a longer settlement time with no more than 5% additional monies paid to the insured. The net effect is the homeowner gets an effective 10% reduction in their claim than if they had worked directly with me as the assigned adjuster.
In conclusion, there is NO incentive for an adjuster to skimp or cut out payments to the insured. Why would we cut our commissions? The same holds true for the WYO carrier and their cut as well.