Can My Contractor Handle My Insurance Claim?

Following super storm Sandy many general contractors and roofing contractors have advertised that they are “disaster specialists” able to specifically “work with your insurance company” on your behalf to settle storm related claims. They even claim to “represent your interests” and “negotiate on your behalf” thereby simplifying the restoration process.

This is both categorically wrong and illegal. There are only three professions specifically licensed by the State of New Jersey to negotiate and adjust storm related insurance claims for homeowners and businesowners. They are licensed public insurance adjusters, attorneys and licensed insurance brokers and producers. No other individuals or companies in New Jersey can act on your behalf, in any way, to negotiate or effect the settlement of insurance claims for damage caused by covered perils. This is spelled out in the “Public Adjusters’ Licensing Act”, L.1993,c.66,s.1., which states” No individual, firm, association or corporation shall act as an adjuster in this State unless authorized to do so by virtue of a license issued or renewed pursuant to this act.”

Contractors who negotiate or effect settlement of insurance claims, in any way, are in violation of the law and may be prosecuted accordingly. This practice known as UPPA (Unauthorized Practice of Public Adjusting) is also potentially harmful to insureds’. Without the necessary education and training an unlicensed practitioner may unwittingly misinterpret coverage provisions within an insurance policy and cost the insured hundreds or thousands of dollars in claim settlements. The policyholders’ responsibilities following a loss are very specific and must be adhered to or settlement may be jeopardized. Contractors do not hold the necessary bonds or liability insurance that provides that if an error or omission is made during adjustment of the claim, that financial recourse is available to the consumer.

Avoid any contractor that purports to adjust or negotiate your insurance claims. If you feel that you need help in dealing with your insurance company following a property loss, seek out an experienced licensed insurance professional (such as a licensed public residential insurance adjuster) or attorney who can successfully adjust and negotiate your claim.