Insurance Adjuster vs Property Management Co

Started by MarcG4 • 8 replies • 169 views

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MarcG4 (Massachusetts)
Posts: 3

Posted:

We are a HOA in a Massachusetts condominium building with 100+ units. We've used our property management company to administer insurance claims in the past. I'm questioning if we should use an insurance adjuster instead for a couple reasons. If we want to negotiate a proposed settlement, that doesn't fall within the administrative duties of the property management company and we would incur a second cost. Adjusters typically get 10% and our property manager insists on them getting 10% -- which seems high(any feedback appreciated). Can we kill two birds with one stone, and save money, by just using an insurance adjuster? What functions should we expect from each that the other doesn't do?

SheliaH (Indiana)
Posts: 6,964

Posted:

Doesn't your insurance company have its own adjusters- if so, why aren't you using them? The property manager might assist in identifying people to talk to about the damage and make sure the area is secured so it can be inspected, and perhaps keep track of what the insurance company is doing, but beyond that, it may be best to have the adjuster do his/her job.

The type of damage may also be a factor - for extensive work, it may be best for the association to hire its own adjuster. You may want to review the type of claims you've had recently and look for trends. The amount the adjuster is paid depends on who he or she works for (independent adjusters likely cost more) and since we live in different areas with different costs of living, saying 10% is too high, low ir appropriate doesn't mean anything - you have to look at what the adjuster did, how long did it take, did other experts have to be consulted, etc.

If it is not right do not do it; if it is not true do not say it. Marcus Aurelius

MarcG4 (Massachusetts)
Posts: 3

Posted:

The reason to hire an adjuster is to get a better settlement. The insurance company's adjuster works for the insurance company. The Board members don't want to handle the claim so it's a question of which to use -- the insurance adjuster vs our property management company.

SheliaH (Indiana)
Posts: 6,964

Posted:

Is that a better settlement for the association or whoever has filed a claim against it for something like a tree in the common areas falling down onto a resident's car or a passerby? The circumstances for needing the adjuster in the first place will play a role, so you probably won't get a simple answer because there isn't one.

Start with doing some research. How many claims have you had, say, in the last five years, , what were they about, how much money was at stake, how convoluted did negotiations get, etc. How much was the adjuster paid and what did the property manager do to facilitate the process.

Be specific- for one case, it may had been as simple as calling a homeowner who forwarded information, which was then forwarded to the insurance company vs a dispute involving a roof repair and whether the hole was caused be negligence or lightning (aka act of God). Were there delays in settling the claim because of something the manager did or forgot/neglected to do?

There may be more at stake here than paying the adjuster- if you're having a rash of certain types of claims, a risk analysis may be necessary to identifying underlying causes. Address that and perhaps you can reduce the number of claims and all that goes with it, including needing an adjuster in the first place. Or you can reserve hiring your own adjuster unless the amount of money exceeds a certain amount

If it is not right do not do it; if it is not true do not say it. Marcus Aurelius

ElleN (Idaho)
Posts: 1,338

Posted:

Quote:

Posted By MarcG4 on 07/10/2025 10:38 AM
The reason to hire an adjuster is to get a better settlement. The insurance company's adjuster works for the insurance company. The Board members don't want to handle the claim so it's a question of which to use -- the insurance adjuster vs our property management company.

Anytime there is a big claim, I would vote (as a director) to hire an insurance adjuster (who works strictly for the HOA, within professional guidelines). Especially in this day and age where insurers are often struggling and so particularly pre-disposed to say no.

The Google AI answer says similar. Google on:

should you hire an adjuster for an insurance claim

DeanJ
Posts: 1,786

Posted:

I sure wouldn’t pay a PM to act as an adjuster. They have no expertise in the field.

JeffT2 (Iowa)
Posts: 880

Posted:

Why “Maxing Out” Insurance Claims May Hurt Your HOA in the Long Run

Just something to think about when your HOA is dealing with insurance claims:

It might seem like the smart move is to get as much as possible from every insurance claim—but that strategy can backfire. Insurance isn’t free money. The higher your claim, the more your premiums are likely to increase. You will end up paying for it later.

You management companies may push to maximize every claim, to get their 10% of the total. But this can lead to inflated costs, and in the long term, it just drives up premiums for everyone.

In my experience, once an insurance claim is on the table, everyone wants a piece — owners, contractors, etc. Contractors often charge more when they know insurance is footing the bill. It’s a "get what you can" mentality that doesn't always align with what’s best for the association.

One alternative: work with your insurance company's adjuster to keep claim costs reasonable, especially for non-catastrophic damage. Keeping claim amounts low can help avoid major premium hikes next year.

Another idea: raise your deductible. That way, you're not even tempted to file small claims—and you can focus on keeping routine repair costs below the deductible level. Ideally, you rarely file claims at all, except for major events.

Of course, in the case of serious damage—like a fire or major flood—you’ll want to recover every dollar possible. That’s when hiring a public adjuster (rather than relying on your management company) can really pay off.

Would love to hear if others have taken this approach—or if your board or management company sees it differently.

LetA (Nevada)
Posts: 2,679

Posted:

Depending on the scope of the work needed, I for sure would go with a certified public adjuster. The insurance company's
adjuster works for them, and the PM won't have a clue. The Public adjuster works for YOU.

DeanJ
Posts: 1,786

Posted:

Quote:

Posted By JeffT2 on 07/10/2025 2:35 PM
Why “Maxing Out” Insurance Claims May Hurt Your HOA in the Long Run

Just something to think about when your HOA is dealing with insurance claims:

It might seem like the smart move is to get as much as possible from every insurance claim—but that strategy can backfire. Insurance isn’t free money. The higher your claim, the more your premiums are likely to increase. You will end up paying for it later.

You management companies may push to maximize every claim, to get their 10% of the total. But this can lead to inflated costs, and in the long term, it just drives up premiums for everyone.

In my experience, once an insurance claim is on the table, everyone wants a piece — owners, contractors, etc. Contractors often charge more when they know insurance is footing the bill. It’s a "get what you can" mentality that doesn't always align with what’s best for the association.

One alternative: work with your insurance company's adjuster to keep claim costs reasonable, especially for non-catastrophic damage. Keeping claim amounts low can help avoid major premium hikes next year.

Another idea: raise your deductible. That way, you're not even tempted to file small claims—and you can focus on keeping routine repair costs below the deductible level. Ideally, you rarely file claims at all, except for major events.

Of course, in the case of serious damage—like a fire or major flood—you’ll want to recover every dollar possible. That’s when hiring a public adjuster (rather than relying on your management company) can really pay off.

Would love to hear if others have taken this approach—or if your board or management company sees it differently.

If you want fewer claims to keep claims low accept a higher deductible. For accepting that risk you realize a lower premium. When you have a claim, the insurer has to provide a settlement that will cover the loss at a reasonable market rate for your area. (90% of the contractor will accept).

If you accept an adjustment where the HOA has to cut corners, you just let the insurer rip off the HOA.

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