Home insurance claims on the rise; Will you need a public adjuster?

3:58 PM, Feb 21, 2011   |    comments
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  • Home insurance claims on the rise; will you need a public adjuster?
  • Home insurance claims on the rise; will you need a public adjuster?
  • Home insurance claims on the rise; will you need a public adjuster?
  • Home insurance claims on the rise; will you need a public adjuster?
  • Home insurance claims on the rise; will you need a public adjuster?
  • Home insurance claims on the rise; will you need a public adjuster?
  • Home insurance claims on the rise; will you need a public adjuster?
  • Home insurance claims on the rise; will you need a public adjuster?
  • Home insurance claims on the rise; will you need a public adjuster?
    

MAPLEWOOD, Minn. -- Micah Coburn has been dealing with a fire caused by a candle since July of last year. By late January, all of his stuff remained in boxes in his Maplewood garage. He meets often with his public adjuster.

"I had never heard of them before, I didn't know what they did," Coburn admitted.

Ben Johnson is just one of 29 public adjusters in Minnesota licensed by the state.

"I haven't been involved in a claim that didn't double, at least," he said, leaning on a dumpster in Coburn's driveway.

Coburn says his insurance company's adjuster hinted at a $15,000 claim, so he hired Johnson, who dove head-first into that dumpster full of his damaged goods. Johnson is now fighting for a claim north of $100,000.

"It's the insurance company's team coming in here, their preferred vendor, their adjuster and their investigators. People don't know that there are other options out there," Johnson explained. His cut of the final settlement will be in the 10 to 15 percent range. "I'll only charge if you realize real benefit, meaning more money."

"If you do have a dispute the best source is to always go back to the insurance company first. Most homeowner's claims are handled successfully," Mark Kulda said. Kulda is the V.P. of Public Affairs for the Insurance Federation of Minnesota. Kulda spends a fair amount of time at the state capitol pushing for legislation. He's working on a bill that would tighten regulations on public adjusters.

"The public adjuster is paid by the amount extra they get for you and sometimes if the money that you receive covers the repairs, it won't necessarily cover the adjuster's fee," Kulda said. He also says adjusters can push up claim amounts that will eventually push up everyone's premiums.

The number of public adjusters in Florida has exploded. A study by the Office of Program Policy Analysis and Government Accountability (an office of the FL Legislature) found that PAs helped homeowners get, on average, 574 percent more from their claims. Average non-catastrophe claims generated $9,379 when a PA was involved; $1,391 when it was not.

Researchers also concluded that public adjusters increased the length of time it took to complete a claim. And the number of complaints against public adjusters grew exponentially, but some of that could be blamed on the sheer increase in numbers.

"For licensed adjusters we really haven't had any complaints," Robert Commodore, a Senior Director at the MN Dept. of Commerce said. His department regulates the 29 licensed Minnesota-based public adjusters. "There are many that are unlicensed and we have lots of complaints on those," he added.

This is a very timely topic here in Minnesota.

"It's a fact, the weather has changed," Commodore said. "It's been a perfect storm of conditions, that means there's going to be a lot of home owners insurance claims in the marketplace," Kulda added.

Minnesotans started 2011 dealing with ice dams. Then the National Weather Service predicted a possible record breaking flood season, and that follows a record breaking summer of tornado activity across the state.

Commodore says preparing for the worst starts now. "Preparation. Take pictures. Get that home inventory kit. Take pictures of those valuables," he warned.

There is a certain amount of homework a homeowner must do.

"Most people don't read their policy so they don't really know what's in there," Public Adjuster Ben Johnson said.

Here are two links provided by the MN Dept. of Commerce.  Try the General adjuster page or the general License Lookup.

 

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