Which of the following describes one method public adjusters are usually compensated?

• A. Commission based on percentage of settlement
• B. Fixed salary from the insurance company
• C. Hourly wage for service rendered
• D. Flat fee per claim processed

Answer: (A)

Public adjusters play a crucial role in the insurance claims process by representing policyholders and negotiating settlements with insurance companies. One common method of compensation for public adjusters involves receiving a commission that is a percentage of the settlement amount they negotiate for the claimant. This method aligns the interests of the adjuster and the policyholder, as the adjuster’s compensation increases with a higher settlement, incentivizing them to secure the best possible outcome for their clients.

This commission structure is a prevalent practice in the industry, reflecting the adjuster's expertise and efforts in managing the claim process. The other compensation methods, such as a fixed salary from an insurance company, which may create a conflict of interest, or an hourly wage, which does not directly tie the adjuster’s earnings to the claim's outcome, are less common in this context. Therefore, the commission-based approach not only provides a clear financial motivation but also demonstrates the adjuster's commitment to advocating for the policyholder's best interests.