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do I need a Public Adjuster after a fire

I have a 3 decker house that was badly damaged by a fire early on Monday morning. Only one floor was occupied by a tenant family and I don't think the fire department has figured out yet what caused the fire. The Red Cross apparently told the tenant they'd pay for 2 nigths in a hotel. I think the Housing Authority will help the tenant find a new apartment right away (the famil has a section 8 voucher). Public Adjusters showed up at the scene of the fire and began calling me. My property management company suggested one that would be good to hire. I signed a contract that said I would pay the Public Adjuster 5% of what I receive and he assured me he'd get right to work figuring out how to best negotiate with my insurance company. He also already had a Professional Contractor at the scene to begin boarding up the property right away. I was told I have 3 days after signing a contract in which I can decide if I want to honor the contract. I'd like to trust my property manager's advice but how do I really know if this is a good Public Adjuster company, if 5% is reasonable and even if I really need a Public Adjuster? Do you have any advice? I did a google search and found his company is licensed and is listed by the Better Business Bureau with No Complaints. But that doesn't really seem like a lot of information to go on... Thanks.

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It is not uncommon, after a fire or a flood, for property owners to be approached by a public adjuster.  A public adjuster is a person who offers to deal with the insurance company and handle your insurance claim in exchange for a fee, usually a percentage of the settlement they negotiate with the insurer. There is no legal requirement that you retain the services of a public adjuster.  I have no position on the issue and think it may come down to the personality of the property owner.  Are you comfortable figuring your losses and dealing with the insurance company on your own?  Or are you more comfortable having someone else fight that battle for you?  If you fall into the second category, and your have suffered a very large loss, you may consider hiring a MA attorney to review your policy and negotiate with the insurer.

You have already signed a contract, so the above discussion may be academic.  I am honestly not sure if Massachusetts General Laws Chapter 93, Section 48 allows you to cancel your contract with the adjuster.  I would guess not, since the contract was not for "personal, family or household purposes."  Beyond that, I'm not aware of any other law that would allow you to cancel.

You, and others who are considering hiring a public adjuster, can contact the Massachusetts Division of Insurance (617) 521-7777) and make sure no complaints have been filed against the adjuster you are considering. You might also ask them if Section 48 is applicable.   They may also have information regarding the 'typical' fee charged in this area.

For our other readers, as this question suggests, the adjuster will ask you to sign a contract.  Make sure you read it carefully and understand the terms and your obligations under the contract.  For more information, or if you wish to file a complaint, you can try contacting the Attorney General's Insurance & Financial Services Hotline at 1-888-830-6277.

Thanks very much for your detailed answer.

I did call the state insurance division as you suggested and the person was very helpful but not a lawyer so he could not specifically answer the question about the 3 day rule about canceling contracts. But he said if we had any problems we could file a complaint.

He said public adjusters are not allowed to charge more than 10% and something about can't take anything from your deductible.... He said they can be negotiated down to 6 or 7% sometimes.

He also said that due to the hurricanes and tornado, there are many new public adjuster applications, even from people from out of state wanting to be a public adjuster in MA.

He was able to verify that the one I signed with is listed as active and current and therefore in good standing.

The contract I signed says it can be cancelled within 3 days with no penalty except for being liable for reasonable out of pocket expenses incurred during that time (I suppose e.g. the boarding up of the property)). I appreciated your mentioning that the 3 day rule may not be applicable for that industry though.

Thanks again for your help.

Good.  Just to clarify, and I'm sure you know this, if the contract says it can be cancelled within a certain period of time, then it can be cancelled within that period.  Good luck rebuilding.

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