Should I Hire A Public Adjuster Or File A Third-Party Claim

A Public Adjuster may represent an insured on a first party insurance claim.

The first party is the policyholder and the second party is the insurance company.

When a claim is made by the first party, it is called a “first-party claim.”

We are writing about this because many insureds come to us when they have a third-party claim.

A third-party claim involves, you guessed it, a third party – that is anyone who is not the policyholder or the insurer – who is looking for payment for damages.

This situation often occurs in high-rises and other multi-story structures.

For instance, a pipe break on the 5th floor may cause damage a condo on the fourth floor.

The owner of the damaged fourth floor unit would rather file a third-party claim against the 5th floor unit owner’s insurer to avoid penalties from their own insurer.

To the disappointment of many policyholders, they find that a Public Adjuster cannot represent them in this scenario.

If they are looking for representation, they need to seek out an attorney.

To continue with the example above, if the claim is made as a first-party claim, instead.

The fouth floor condo owner’s insurance carrier would pay their claim, assuming it’s due to a covered cause of loss, and then subrogate against the fifth floor unit owner’s insurance carrier.

What that means is that, the fifth floor unit owner’s insurance carrier would be resonbile for reimbursing the fourth floor unit owners insurance carrier for the claim.

Essentially, the fourth floor unit owner’s insurance company would break-even.

Each insurance company has the discretion to account for subrogated claims when calculating your coverage rates.

Knowledge of whether a claim will affect a policyholders rates would help decide which avenue through which the property claim should be pursued.