If you ever have had to file a claim on your rental property then you know it feels like no one is on your side. If you need to file a significant insurance claim on your rental property (>$30k) it feels even more lonely? Flooding and fires are the most common claims of this size. Even a small size fire can cause massive damage when you consider water damage from putting it out.

Public Adjusters In Chicago

Having been in Chicago Property Management for over 20 years now, we have had our fair share of claims be filed. As investors ourselves, many of these claims were on properties I personally owned, so I have first hand experience and knowledge of how working with a Public Adjuster can benefit Chicago investors. On the other hand, we have offered the advice to our clients on utilizing a Public Adjuster and when we have seen them not follow our advice, we have seen them not get as much out of the claim that they need in order to restore their property.

If My Claim Is Larger Doesn't My Insurance Go Up

I don't know the exact algorithm or approach of insurance companies that is used to determine future insurance rates, but I do know from my insurance professional friends that even the mere thought of filing a claim or putting an insurance company on notice of a potential claim will place your policy into a higher risk. Then I have also been told that if the claim is $250,000 or $280,000 that should not affect your rate much differently but can be the difference between you coming out of pocket for $20,000 after a claim event.

When Do Chicago Real Estate Investors Use A Public Adjuster

GC Realty & Development clients or myself have used Public Adjusters for claims for fires, flooding, storm damage, and even once, damage done to a unit when a tenant vacated (not a tenant GCR&D placed but we inherited them). The great thing about a Public Adjuster is it doesn't cost anything to call them and ask them for advice on whether they think they can help you or not on a particular claim. If you have a claim to file, call your insurance broker to make the claim and your next call would be to a Public Adjuster to see if they can add any value.

What Do I Say To A Public Adjuster

When you call up a Public Adjuster there is not much you have to do except explain the details of the claim event and ask if they think it is worth hiring them. Public Adjusters only get paid based on what they can get you so they are typically not going to waste your time if they cannot add value but they may ask you for a copy of your insurance policy. If you are part of a Homeowners Association(HOA) they will ask you for a copy of the decs and bylaws so they know what is the responsibility of the HOA and what is the responsibility of the unit owner. Typically the Public Adjuster will take in all the facts and let you know within 3-24 hours if they can help or not.

What Does a Public Adjuster Do

When you file an insurance claim the insurance company assigns their own internal adjuster to look at the damage and look at your policy and the insurance company says “we will pay out this much money”. Where the your and me are at a disadvantage is there is a grey area in determining how much should be paid out to cover the claim and you and I have no insight on how to even challenge an insurance company. Insurance companies are smart and measure risk better than any other industry so they will do what they need to pay you just enough to ensure they meet their requirements. But the person that does know how to challenge the insurance company is a Public Adjuster.

Can The Public Adjuster Work Direct With My Insurance Company

Yes and you want that. Usually within 24 hours of a claim event such as a flood or fire the insurance company will send their adjuster out to view the issue in person and if you can have the Public Adjuster there so they both meet in person that is a great way to start off the process. It is a small world and many private adjusters have relationships with the insurance companies adjusters and that can work to your benefit if you are working with someone reputable.

What Does A Public Adjuster Challenge

A Public Adjuster will challenge the scope of work, the depreciation, and even the interpretation of the actual coverage as written in the policy as it pertains to this particular claim event. They are experts in how policies are written, construction costs, and standard insurance policies.

Fire Claims

If a fire breaks out in your rental property or apartment building, there could be alot of insurance money being left on the table in the form of lost rents, damage to other units, or the actual cost to repair, being underestimated. Water damage also ends up being a large part of your repairs after a fire.

Board Up After Fire Event

If you have ever had a fire at a building you know there is board up companies waiting outside your house to get the job to board up the property. Before you hire any of those guys you might call your Public Adjuster or if that is not possible make sure you negotiate the best pricing with the person boarding up the home. Remember it is your responsibility as the building owner to protect the property from further damage so decisions made immediately after a claim event can go against you if you are not protecting the property. An example us holes in the roof made by a fire department. If those holes are not tarped right away and it rains for the next two days you can be on the hook for the additional damage caused even though the damage done by the fire should have had to happen either way. Don't risk it and board up, tarp, or fence off your property to prevent further damage or potential injury!

Water or Flooding Claims

It always feels that flooding or sump pump failures are claims that are quick to be denied by insurance companies. If you have a water backup or flooding, you may not have the correct coverage, but make sure you have someone on your side helping you understand that is the case. In some instances, there are other ways you can claim a smaller amount of money to cover damages if you look at the bigger picture.

Storm Damage

We are in the Windy City (side note, “Windy City”, as it pertains to Chicago, has nothing to do with weather) and a sudden storm can land a tree on your home or your neighbor's home.

Does a Public Adjuster Cost The Landlord Money?

While you’ll usually pay a percentage of the claim for their services, a Public Adjuster could help you recover thousands of dollars, or even tens of thousands on a total loss. Plus, they take all the time and hassle of haggling with insurance companies off your plate. There is a cost but there should be a net benefit financially for the property owner.

Does Insurance Pay The Public Adjuster

You will sign a contract with a Public Adjuster outlining the percentage of compensation from the claim they will get. The insurance check will go to the adjuster and you will provide their payment in exchange for the larger check from the insurance company. A flexible adjuster will give you a couple days for the insurance check to clear before they cash their check to prevent you from going out of pocket.

Can A Public Adjuster Complete Rehab Work

Most Public Adjuster companies are experts in construction and many even own separate rehab companies. In addition to having a Public Adjuster represent you in a claim you can also seek advice on any rehab work or even hire their companies to do so. This is not a must and if you have your own contractors or are a GC yourself it doesn't affect anything on the claim side. Some might say this is a conflict of interest but since there is no obligation to use their firm it isnt an issue. To me this shows how close they are to current market conditions, current material pricing, and housing stock in the area.

What Else Do Chicago Investors Need To Know?

As an investor in the Chicagoland area, there are plenty of things you need to know to avoid costly mistakes. Having a Public Adjuster on your side is just one tip you will get from the most recent download we created “Landlord Fails: 50 Pitfalls To Avoid For Success”.

Grab a copy for free today!! We would obviously love for you to hire or refer us, but you don't have to do so in order to benefit from our 20+ years of experience. Let us help you be the Chicago or Chicago suburb real estate investor you want to become!

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Avoid Costly Mistakes: 50 Landlord Fails That Could Save You Thousands!

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