Independent vs. Public Adjusters
For those beginning their evaluation of adjusting as a career possibility, it would be helpful to distinguish two highly different types of adjusters that are often confused with each other: independent and public adjusters.
Independent adjusters serve as representatives and act on behalf of insurance companies. They usually do so through an intermediary adjusting firm that directly supervises the quality of their work in the field. Independent adjusters are “independent” because they are typically 1099 independent contractors rather than salaried employees. Independent adjusters receive compensation either in a set “daily rate” (i.e. $300 per day for each day worked) or more often through a fee schedule whereby they receive what amounts to a percentage of the claim settlement amount.
Public adjusters on the other hand represent, act on behalf of, and are paid by the policyholder directly. A policyholder secures the services of a public adjuster in a way similar to how one might contract the services of an attorney. Public adjusters negotiate with the staff or independent adjuster assigned to a particular claim. Public adjusters may work on their own or as part of a larger public adjusting firm. A common rate of commission for public adjusters is 10% of the final claim settlement amount. Unlike independent adjusters who handle claims as a matter of course, public adjusters must solicit or sell their services. Becoming a public adjuster also presents a few more challenges in getting started. You must post a bond, pass a strict background check, and may have to fulfill an apprenticeship of up to a year.
Due to the nature of the two positions, independent and public adjusters are often placed in adversarial positions at the negotiating table. Consequently, there is a good deal of apprehension and ill-feeling towards the other – whether justified or not.