The “Public” Claims Adjuster
When you make a claim following a loss, your insurer mandates a claims adjuster to investigate, estimate the damages and negotiate the settlement. This person is a certified professional who must comply with a code of ethics that stipulates, in particular, that the adjuster has an obligation to provide you with the explanations required to understand the settlement of the claim and the services rendered.
When a major loss occurs, claimants sometimes mandate their own claims adjuster, at their own expense, to represent them when dealing with the insurer and the insurer’s claims adjuster. All claims adjusters (whether mandated by an insurer or by a claimant) are professionals who are certified by the Autorité des marchés financiers (the Authority) and overseen by the ChAD. They share the same ethical obligations. In addition, certain provisions of the Code of ethics of claims adjusters specifically pertain to claims adjusters mandated by the insured.
The role of the “public” claims adjuster
When a claimant mandates his own claims adjuster—often called a “public” claims adjuster—this adjuster becomes the claimant’s main representative, acting on his behalf vis-à-vis the insurer. The adjuster’s role includes:
- negotiating with the claims adjuster mandated by the insurer;
- providing regular status reports on the file;
- helping insureds to properly document their claim and make informed decisions throughout the process;
- informing the insured of the results of the insurer’s investigation, required deadlines for carrying out the work, and how the work is progressing, as well as any offer of settlement from the insurer;
- helping insureds to draw up their personal property inventory of damaged belongings, if this has not already been done.
A FEW TIPS
- Before signing your contract: If, in the wake of a loss, a public claims adjuster approaches you directly, review his proposal and note down his contact information. Give yourself some time to think about it, particularly if you are still feeling very emotional about the loss.
- Take time to carefully review the terms of the adjuster’s contract, as well as the type of remuneration he proposes. The ChAD has created a standard contract to help you with this.
- Check the claims adjuster’s disciplinary record. This information may be obtained by sending a request to the secretary of the Discipline Committee of the ChAD.
- If you have signed a contract with a “public” claims adjuster, please note that you may cancel it within ten days of receipt. You must, however, pay any fees that were incurred to avoid further damage. A model claimant’s notification to cancel the mandate is available on our website [in French only].
- Remember, you are fully responsible for remunerating a public claims adjuster.
Approximately 1% of claims adjusters practicing in Quebec are mandated by claimants (approximately 30 out of over 3,000 claims adjusters); all the others are mandated by insurers. The ChAD does not keep a specific register of “public” claims adjusters; to find one, do a web search or ask for referrals.
Choice Between two modes of remuneration
The claims adjuster must give the claimant a written contract that explains the mode of remuneration agreed upon by the parties. The claimant must choose one of the following two options:
- remuneration based on a percentage of the insurance settlement;
- remuneration based on an hourly rate plus reasonable expenses.
The first option is a percentage that the claimant and the adjuster agree upon in advance. It is deducted from the insurance settlement the insurer pays to the claimant. The percentage may be fixed, or calculated on a sliding scale by tranche of compensation.
The second option is calculated on an hourly basis. The claims adjuster estimates the number of hours he expects to work to fulfill his mandate. If the adjuster realizes he needs to exceed this number of hours, he must notify the claimant and obtain her authorization before carrying out the additional work.
Regardless of the type of remuneration chosen, the claims adjuster must give the claimant periodic updates on his work. The claimant may cancel the mandate within ten days of receipt; he must, however, pay for any costs incurred to avoid further damages. If need be, the claims adjuster must provide the claimant with a full copy of his file without delay.
A model contract
The ChAD has created a written contract that clarifies the rights and obligations of the parties involved. It includes:
- a definition of the mandate;
- an explanation of the obligations of both the claims adjuster and the claimant;
- remuneration options;
- what to do if the contract is cancelled by the parties or if the insurer refuses the claim.
Review the standard contract. It also includes a notice of cancellation of the mandate by the claimant (in French only).
DID YOU KNOW?
All claims adjusters (whether mandated by an insurer or by a claimant) are professionals who are certified by the Autorité des marchés financiers (Autorité) and overseen by the ChAD. Claims adjusters must complete at least 20 hours of professional development every two years in order to maintain, or even improve, their skills. They are governed by a code of ethics, and must comply with the relevant legislation; the ChAD oversees their professional practice compliance. You can verify that your claims adjuster is authorized to practise by checking the “Register of firms and individuals authorized to practise” on the website of the Autorité des marchés financiers.
For further information
Annotated Code of Ethics of Claims Adjusters
Tip Sheet for Claims Adjusters on Divided Co-ownership
Série de questions non exhaustives à se poser afin de prendre en considération certains éléments incontournables en matière de copropriété, pour bien traiter une telle réclamation.