Secrets of a Public Adjuster: What Really Happens After A Major Disaster?

Hurricane Florence | Professional Loss Adjusters

Insurance companies are under tremendous pressure to respond to a claim as soon as possible. However, they have reduced the number of their property adjusters in recent years, and when a major calamity occurs such as Hurricane Florence, they have to bring in adjusters from out-of-state to write an estimate for the cost of the repairs. The technical term for these adjusters is “Cat Adjusters,” which is short for “Catastrophe Adjusters.”

These Cat Adjusters wait for a widespread disaster to hit, such as hurricanes. They then work very hard for a few months and then move on to the next disaster, wherever it may be.

What is the problem with this situation?

  • There may not be enough adjusters to handle every loss so that each adjuster gets more assignments than he or she can handle.

  • Since they are from out-of-state, they don’t know the local construction methods or materials and they typically don’t have the time or skill to prepare a proper estimate.

  • Their orders from the insurance companies are to write up only what they see. They are not permitted to use moisture measurement devices that can determine if a wall is wet on the inside.

  • The tremendous number of claims means that remediation companies, such as ServePro or ServiceMaster, who know how to determine what parts of the building are wet, don’t have the manpower to remove wet materials and dry out all the buildings that need their services. The result? Cat Adjusters often can’t see all the damage. Even when they do, they are so harried that their estimates are too low.

We’ve seen it happen many, many times. Cat Adjusters dash through a home, write a short estimate for a few dollars and go on to the next claim with the expectation that local adjusters will pick up those claims in the near future and give them more careful consideration.

As Public Adjusters, we represent business and home owners who have suffered a loss (fire, flood, wind damage, etc.) and have insurance claims. We estimate the damage and negotiate a settlement with the insurance company’s representatives. We have been through this process so many times that we understand how to prepare a proper estimate that the insurance company will accept. The truth is that your insurance policy provides little guidance about how to do this.

Hurricane Damage | Professional Loss Adjusters

The perfect storm for the business and home owners.

One can only imagine what would have happened to these homeowners and condo owners if they had not received the proper amounts for their damage. Many of our customers told us they would have lost their homes. All too often we receive calls from business and home owners who tried to settle the insurance claim themselves. After they received a settlement from their insurance company and realized it wasn’t enough money to cover the contractor’s estimate for repair did they realize they were in trouble.

We are often called in at this stage. It’s especially difficult for us to adjust these losses as we become involved months after the initial catastrophe that caused the damage in the first place. Your best chance at a full recovery is to contact a Public Adjuster immediately after the loss occurs.

Hurricane Irma Florida Keys | Professional Loss Adjusters

Unfortunately, the process is similar to what occurs after other insurable disasters, such as hurricanes and tornados.

There were so many wind and flood losses after Hurricane Harvey hit Texas for the infrastructure there to handle. Many insureds were left without sufficient funds to restore their homes or businesses. One of our Public Adjusters, Mike Salvi, relocated to Texas to help our clients settle their losses. One loss in particular—in Orange, Texas—took a year to settle. Here’s what happened:

  • The homeowner tried to settle their own claim with the insurance company.

  • After many attempts, they received what we could only describe as a ridiculously low offer.

  • The homeowner was referred to us and Mike stepped in to negotiate with the insurance company.

  • At first, the insurance company wouldn’t return his calls. They were simply stretched too thin.

  • The insurance company had been using Cat Adjusters to deal with the enormous volume of claims in the region as a result of the hurricane.

  • Mike persisted and was able to get the insurance company to assign the case to another internal adjuster (a desk adjuster inside the company).

  • Mike found out that the case file was missing all of the key data and evidence that was originally supplied (photos and other substantiating evidence of the damaged home and its contents).

  • Mike re-sent all of the materials and pointed out to the adjuster the damage that was missed during the original field adjuster’s visit.

  • He also pointed out the erroneous calculations for the building materials, where were severely under-estimated.

  • The home suffered both wind and flood damage. These losses are covered under two separate policies—the homeowner’s policy and the flood policy.

  • The initial settlement for the roof (homeowner’s policy claim) was $2,000. Mike negotiated a $19,000 settlement.

  • The initial settlement for the home (flood policy claim) was $30,000. Mike negotiated a $190,000 settlement.

  • Our fee equals 10% of the settlement. The work that Mike did more than paid for itself, freed up the homeowners to go about their lives and enabled them to afford to rebuild.

What should be done to protect business and home owners after a disaster?

Authorities should notify them about the process and the proper ways to deal with this. By authorities, I mean the insurance commissioners for each state, the insurance brokers and agents, the insurance company adjusters, and the insurance companies themselves.

How should business and home owners protect themselves?

  • Don’t accept the first estimate for the repairs if it is too low. Consult with a contractor and make sure you will have sufficient funds to complete the work.

  • Understand the insurance policy and note the significance of Replacement Cost vs. Actual Cash Value and how you can recover the holdback. This can be complicated and should be spelled out clearly in a letter from the insurance company’s adjuster.

  • Know how to deal properly with code upgrade issues (called Ordinance or Law in the policy).

  • Hire a good Public Adjusting firm to help you through this confusing process.


Leonard Theran, SPPA

Len earned a Bachelor of Science degree in Mechanical Engineering from the Massachusetts Institute of Technology and an MBA from Stanford University. He has more than 35 years of adjusting experience and also earned the SPPA designation. Because he has also been involved in the management of several high-tech companies, Len has a unique perspective when adjusting industrial losses. He is a past-President of the Massachusetts Association of Public Insurance Adjusters (MAPIA) and is on the Board of Directors of the National Association of Public Insurance Adjusters (NAPIA) and CAI-New Hampshire. He has also qualified as an Expert Witness and has been a featured speaker before several organizations including the Risk and Insurance Management Society, the Institute of Real Estate Management and Lorman Education Services.

Len is licensed in Massachusetts, Connecticut, Maine, New Hampshire, New Jersey, Rhode Island, Vermont, Georgia, North Carolina, South Carolina, Texas, West Virginia, Virginia, Oklahoma, Florida, and the U.S. Virgin Islands.