Start with these three important questions to ask before hiring either a public adjuster or attorney.
1. How Much Do Your Services Cost?
What is this going to cost me? How are you paid? A famous question. And an important one to get an answer to before you hire anyone.
To begin with, don’t hire anyone who asks for money upfront! Reputable attorneys and public adjusters nearly always work on a contingency basis. The main differences between an attorney's or public adjuster’s contingency fee agreement is how the fees are calculated.
In any insurance dispute resolution, you have an initial claim, an additional claim, and a final claim.
- An initial claim is the amount that the insurance company has said they're willing to pay you. If you're planning to hire an attorney or a public adjuster, you already know that this amount is far too low for you to make the repairs you need.
- An additional claim is the amount of extra money your insurance company is willing to pay, usually after you get an attorney or public adjuster involved.
- A final claim is the total amount of both your initial and additional claims added up.
So, let's say your initial claim is $100,000 and your additional claim is $20,000. That means your final claim is $120,000.
Now, we can calculate how each a public adjuster and an attorney's contingency fees would be calculated.
Calculating a Public Adjuster's Contingency Fee
Most public adjusters work on contingency fees that range from 5% to 15% of the Final Claim. In other words, regardless of the amount of your initial claim that you obtained without any help, the public adjuster will take 15% of the total.
Let's use the above calculation as an example. :
- Your initial claim is $100,000,
- Your additional claim is $20,000
- All totaled, your final claim is $120,000
A public adjuster will take between $6,000-$18,000, or 5% to 15% of your final claim.
Calculating an Attorney's Contingency Fee
Most Attorneys are paid 0% on the initial claim, and 33-40% on the additional claim.
Let's use the above calculation as an example. :
- Your initial claim is $100,000,
- Your additional claim is $20,000
- All totaled, your final claim is $120,000
An attorney will take between $6,000- $8,000, or 33% to 40% of just your additional claim. For many, this makes attorneys a more favorable option, because an attorney can do everything a public adjuster can do and more (file a lawsuit, court ordered mediation, etc.) and you're able to keep as much as your final insurance claim as possible. State insurance laws also permit attorneys to collect additional fees, which can help offset their costs.
What answer do you want to hear to the "How Much Do Your Services Cost" question?
When you ask an attorney or a public adjuster what they cost, the answer you want to hear is:
- A fixed contingency fee from the public adjuster
- A percentage of any additional claim money from the attorney.
Anyone charging a flat rate, or telling you that they don't cost anything is probably someone you want to walk away from.
2. What Licenses Do You Hold, And May I See Them?
Both PAs and attorneys must be licensed to legally operate in the State of Texas. Always verify their licenses using either the State Bar or the Texas Department of Insurance. Also, make sure they are operating under their own name.
What answer do you want to hear?
From a public adjuster, you want to hear that they are licensed through the Texas Department of State. The PA should give you their full name so you may verify.
From an attorney, you want to hear when they passed the Bar, and also their full name, so you can verify them through the State Bar.
3. How Many Claims Are You Working, and How Will You Prioritize My Claim?
Ask how many claims the PA or attorney is working and what staff they have to give your claim the attention you deserve.
In a major disaster such as a citywide storm, you want to make sure you are not lost in the mix. Many untrustworthy PAs or attorneys will take on far more cases than they can reasonably handle and try to make a quick buck by settling as fast as possible without working to maximize your payment. .
What answer do you want to hear?
From either a PA or an attorney, you want to know that you will be assigned more than just one person, to handle your claim. Ideally, you will be assigned multiple staff members in case your one dedicated point of contact is sick or on vacation. It is important that you always know who to go to and have access to them to discuss any news or questions as well as their supervisor’s information.
A reputable PA or attorney will also reassure you that they never take on more cases than they can handle, and will explain how they maintain a high standard of service, even in the event of a major disaster.
No Matter What, Be Sure to Hire the Professional That Seems The Most Trustworthy to You
If you can, it's a good idea to interview a few public adjusters or attorneys to make sure you're choosing someone you can trust.
In the end, whether you choose a public adjuster or an attorney, it's important that you do hire a professional to represent you.
Even if everything seems to go your way, listing, describing, and determining the value of seemingly countless items destroyed, (or damaged) is time-consuming and labor-intensive. Add meetings with various adjusters, inspectors, and contractors, all while trying to decipher insurance or construction jargon, can unravel even the most “put together” person.
An experienced public adjuster or attorney will save you thousands of dollars and more than make up for their fee.
If you still have questions about finding a reputable attorney to represent you in insurance dispute resolution, don't hesitate to get in touch with The Lane Law Firm. Our experienced attorneys are here to help.
