Understanding Insurance Adjusters in the USA

Recently liability insurers on both sides of the Atlantic have reportedly scaled back the cover they offer companies, ahead of an expected wave of claims as employers call staff back to the office after several months of remote working. When an insurance claim is made, insurance adjusters play an important role by assessing the amount of loss and then calculating the required payout needed. Insurance adjusters need to have an understanding of loss, policies and how to conduct a thorough and fair investigation. This article will further explain the concept and duties of insurance adjusters.

What is an Insurance Adjuster?

An insurance adjuster, also known as a claims adjuster, determines how much the insurance company should pay the policyholder if they make a claim. Insurance adjusters normally focus on a specific claim type and its insurance coverage. The fields of coverage are vast, ranging from auto, workers’ compensation, compensation and residential. Insurance adjuster’s also need to have a flexible schedule seeing that often much of their work is based out of office.

When having to create a fair assessment of the claim, the insurance adjuster has to go to the policyholder or the site of damage to properly appraise and investigate the situation. After doing so, the insurance adjuster will compile all the information into a report, commonly known as a claim file. This claim file will then be presented to the insurance company and the policyholder when a decision to pay or not to pay has been reached.

Types of Insurance Adjusters

There are four types of insurance adjusters, namely Staff Adjusters, Independent Adjusters, Public Adjusters and Catastrophe Adjusters.

• Staff Adjuster

A staff adjuster, who works for an insurance company, only processes claims for the carrier they are employed by. Seeing that the adjuster is employed by a company, there could be incentives which are provided by the company for the adjuster to resolve a claim in a desired amount of time and within a limited financial payout bracket. Insurance companies may use these tactics to reduce payouts to the minimal amount they are legally required to pay, to maintain a higher profit for the company.

• Independent Adjuster

An independent adjuster, who is not an employee of one specific insurance company, acts as a third-party vendor. They are normally contracted by an adjustment or claims administration firm. Independent adjusters may also be hired by insurance companies, on a freelance basis, to adjust claims and achieve its resolution on behalf of the insurance company if there are higher claim volumes than usual. Independent adjusters are unique seeing that they are able to specialize in more than one type of claim to expand their total potential income.

• Public Adjuster

A public adjuster, who is licensed by their state, is hired by the policyholder. Unlike the previously mentioned adjusters, the public adjuster has the consistent goal to maximimise potential compensation for the policyholder’s insurance company. Most public adjusters have experience working for insurance companies, and use this experience for the benefit of the policyholder.

• Catastrophe Adjuster

A catastrophe adjuster is a field adjuster that specializes in assessing loss and damage due in large scale damage events, such as natural disasters. Catastrophe adjusters are usually employed by an insurance company to resolve the claims of their policyholders. They operate alongside vendors and officials, such as contractors, government authorities, and emergency workers.

Tools Insurance Adjusters Use

Insurance adjusters use their knowledge of claims handling, negotiation skills and insurance acumen to come to resolve a claim, but they also at times also use a software system for claims operations and the itemization of damages. These systems allow adjusters to gather and organize loss information, sketch a diagram of the impacted structure, select the related project costs and review and verify the accuracy of an estimate. This is done to build a comprehensive claims report. A common software system used is Xactimate, specifically for property claims. When they use a proprietary estimating system they are able to gather and organize loss information, sketch a diagram of the impacted structure, select the related project costs and review and verify the accuracy of an estimate.

The Takeaway

Insurance adjusters are an important part of all insurance claims and are well qualified to resolve them. Specific types of insurance adjusters are best suited for different types of claims. When claiming from an insurance company, policyholders should strongly consider using a public adjuster, if they are able to have that option, because public adjusters may be the best choice to achieve maximum payout for the claim.