What are "contingent fees" in the context of public adjusting?

Contingent fees are a type of compensation structure where the public adjuster's fees are based on the amount recovered from an insurance claim. This means that the adjuster only receives payment if they successfully negotiate a settlement on behalf of the policyholder. If the claim is unsuccessful and no recovery is made, the adjuster does not earn a fee. This incentive aligns the interests of both the adjuster and the policyholder, as the adjuster is motivated to maximize the claim amount to receive their payment. Contingent fees are commonly used in the insurance adjusting industry because they help ensure that the adjuster is fully invested in the client's recovery process.