Some Quake Survivors Hire Own Adjusters : Recovery: Many property owners have been less than pleased with the dollar amounts that insurance companies are willing to pay.

Many victims from the January earthquake are still having trouble adjusting.

Insurance companies dispatched teams of adjusters and estimators to tally the claims of local policyholders. Many property owners, however, have been less than pleased with the dollar amounts that insurance companies are willing to pay out. To use the insurance industry jargon, many policyholders feel that they’ve been mal-adjusted and they are hiring their own insurance adjusters to re-adjust.

“Insurance companies have a natural temptation to low-ball their estimates,” said Stuart Berton, a Studio City resident who hired a public insurance adjuster to make sure that he got the most out of his earthquake insurance policy. “I don’t know anything about the construction trade,” said Berton, who is an entertainment attorney. “I had no way to estimate what the damage was worth.”

Berton’s home sustained many cracks and a ruptured front porch. His insurance company has agreed to pay for much of the damage, but they are still haggling over the projected costs of the Bertons’ moving out of their home while the remodeling work is done. Berton is convinced that he’ll be getting more compensation from his insurance company because he has agreed to separately pay a public insurance adjuster. At the very least, he said, “you can reach a settlement with an insurance company based on knowledge.”

Knowledge, of course, is a wonderful thing. Knowledge, however, doesn’t always come cheap.

California’s public insurance adjusters--licensed by the state Department of Insurance--are charging policyholders contingency fees of between 10% and 15% of their total insurance recovery. Adjusters who come into a situation after an insurance company has made its initial settlement offer will charge 20% to 30% of any increase they are able to get for the property owner from the original insurance company offer. Most fees are subject to negotiation, and some adjusters will agree to a fixed versus contingency fee arrangement.

Hiring an adjuster isn’t cheap, but claimants get what they pay for, insisted Alan W. Kapilow of Kapilow & Son Inc. in Culver City. “I’m making more money than I ever had for 22 years in the business,” he conceded. But “whatever I’m producing for the policyholder is usually gravy.”

Kapilow believes that many insurance companies are shortchanging their policyholders, and the only protection is hiring an independent public insurance adjuster. “People naively believe that their insurance company will protect them,” Kapilow said. Insurance companies, however, are out to protect their own interests, he said. Besides, after the January earthquake, insurance companies brought in teams of out-of-state adjusters who didn’t have the time and experience to really assess all of a property’s damage, Kapilow asserted. “They failed to look at all the subtle cracks and other damage that wasn’t obvious.”

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Homeowners can call in engineers and contractors to come up with independent damage estimates, Kapilow said. He argued, however, that an adjuster is better suited to hire the engineer and contractor, then deal with the insurance company. Besides coming up with damage estimates, Kapilow said, he and his eight adjusters familiarize themselves with a client’s insurance policy and basically play the role of a haggler. If an initial look at a homeowner’s situation doesn’t turn up the potential for estimates that are much higher than an insurance company’s, Kapilow said he won’t take on the client.

“There are many arguments produced by insurance companies about why certain things don’t need to be done or aren’t covered by a policy,” said Michael Palache, partner at Rubin, Palache & Associates, a Los Angeles public insurance adjusting firm. While his company is not authorized by state law to officially negotiate with an insurance company, Palache conceded that it happens all the time under the umbrella of advising and assisting the policyholder.

“Some insurance company adjusters welcome our involvement; others resent it,” said Palache, of Tarzana. Fewer than 10% of policyholders who call Palache are getting what he considers a fair shake, Palache said. “But there are many people satisfied with their insurance companies who don’t call me.”

Before turning to an outside adjuster, policyholders should first see if they are being treated well by their insurance company, advised Gene Jeffers, executive director of the Western Insurance Information Service, a consumer education group in Los Angeles funded by the insurance industry.

“A lot of people run out and look for outside help, but it’s important to begin with the insurance company,” he said.

Some insurance adjusters did indeed originally come up with low damage estimates, Jeffers conceded, but most of the problems had to do with the heavy workload generated by the January quake.

Insurance companies will generally agree to revisit their original estimates when new problems related to the quake are discovered.

Start with the insurance company and, if you get satisfactory results, you don’t need to go outside, Jeffers said. “Most claims are resolved satisfactorily and people go on.”