What is an Insurance Adjuster
Updated: April 30, 2021|
Updated: April 30, 2021|
Insurance adjusters play a vital part in the lifecycle and outcome of an insurance claim. Their responsibility is to assess the amount of loss that was experienced by the policyholder, and then determine how much their insurance company should pay for that loss. Essentially, adjusters are what stands between a claimant and their potential insurance payout.
This requires adjusters to have a solid understanding of the type of loss, the ins and outs of the policy, and the ability to conduct a fair investigation into the claim.
Usually, an adjuster will focus on a specific type of claim and its respective line of insurance coverage. They can choose to work in anything from auto, workers’ compensation, to commercial and residential.
This generally requires an adjuster to work outside the office and in the field to perform tasks that better equip them to appraise, investigate, and then create a fair assessment of the claim.
For example, if there was an occurrence of severe weather that caused mass devastation to residences and commercial buildings, an adjuster would visit the location to assess damage, collect witness statements, and even speak with any government officials or specialists on the scene. This information gets compiled into a report, commonly known as a claim file, which will be presented to both the insurance company and the insured when a decision to pay or not to pay is reached.
A common question about adjusters is where their interest lies – is it with the claimant or the insurance company? This depends on the type of adjuster they are, which is determined by whom they work for.
A staff adjuster works on behalf of the insurance company. This means they only service claims for the carrier they work for. Because this adjuster is an employee of the insurance provider, there could be incentives to resolve a claim in a certain amount of time and within a certain financial payout limit. There are strategies insurance companies can use to reduce claims payouts to only the amount they are legally liable to pay.
Insurance companies provide products and services that are meant to help people in a trying time, but it is worth-while to mention they are still for-profit companies. They have internal and external stakeholders that hold the company accountable for profit, just like any other business. How an insurance provider navigates this is unique to each corporation.
An independent adjuster is not a salaried employee of any one specific insurance company or provider. They can act as a third-party vendor, contracted typically by an adjustment or claims administration firm. Independent adjusters can also be hired directly by insurance companies to adjust the claim and achieve its resolution on their behalf if they are experiencing unusually high claim volumes.
Unlike a staff adjuster, an independent adjuster could specialize more in a type of claim, like homeowner’s or commercial lines. They tend to market themselves as experts in a specific field, making them appealing to insurers that are in the market to cover a specific niche due to an increased volume of claims.
A public adjuster is licensed by their state and is hired on the behalf of the policy owner. This type of adjuster is unique, as their first focus is maximizing potential compensation from the insurance company and getting that into the pocket of the claimant. These adjusters have very likely worked on behalf of an insurance company prior to becoming a public adjuster and can apply that expertise and perspective to the benefit of the policy owner.
The clearest distinguishing factor between public adjusters and other insurance adjusters is the view that these types of adjusters are “on the side” of the claimant, versus adjusters that work on behalf of the insurance company.
A catastrophe (CAT) adjuster is a type of field adjuster that surveys loss as a result of an event that caused a severe amount of damage, like the recent California wildfires or Hurricane Michael. If that incident caused a certain amount of extensive property loss, and at a certain level of severity, a CAT adjuster would be brought out to inspect the site and conduct an appraisal of damage. CAT adjusters usually operate on behalf of an insurance company, working to issue payment when possible to policyholders. They would work alongside other vendors and officials, like contractors, government authorities, and emergency workers.
Adjusters not only rely on their knowledge of claims handling, negotiation skills, and overall insurance acumen to bring a claim to resolution. Often adjusters will utilize a specific software system for claims operations and itemization of damages. This helps them build a comprehensive claims report for the provider, insured, and any other interested parties (like an attorney, and/or an Independent or Public Adjuster). Xactimate ® is a software solution specifically for property claims. familiar with this software and its abilities is recommended, especially if you are looking to hone in on a career as an adjuster in property claims. Xactimate is considered an industry standard for most insurance companies and claims firms. With a proprietary estimating system, adjusters are able to:
The earning potential for an insurance adjuster is dependent on whether they are a staff, public, or independent adjuster. Other factors that impact salary are location and skill level.
As defined earlier, a staff adjuster is a salaried employee of the insurance company. Growing with the company, in its own specific structure, can put you on a path that could offer steady pay raises with experience.
For example, an insurance company could bring in an entry-level employee as a claims assistant, that works with and assists field adjusters. In time, you could earn the experience necessary to become an adjuster for the company.
An independent adjuster typically has previous experience as a staff adjuster and has formed relationships with vendors and providers during their career that now earn them independent jobs.
Like independent adjusters, public adjusters most likely earned their experience working for an insurance provider, and now operate on their own on behalf of the interests of the claimant.
|Type of Insurance Adjuster||Average Base Pay|
|Staff Insurance Adjuster||$57,100|
|Independent Insurance Adjuster||$71,500|
|Public Insurance Adjuster||$50,533|
Information gathered from Glassdoor
Insurance adjusters have to strike a unique balance between working with administrative operations, numbers, and people. In many ways, they serve as a liaison between the insurance company and the insured during a time of need. Excellent communication skills help adjusters not only uncover the information they need to resolve the claim, but to deliver a quality customer experience on behalf of the insurance company.
A deep, thorough understanding of insurance policies and how they are applied is necessary for an adjuster to do their job. Policies serve as a “black and white” structure of what the insurance company can and cannot do, but it is the intuition and experience of the adjuster that determines how the policy can be fulfilled, especially when there are “grey” areas.
It is not common to find a specific bachelors or advanced degree in the field of insurance. Some colleges or institutions require you to join a College of Business or Finance and then declare insurance as a specific study. However, while it is not an absolute requirement to complete a four-year degree to become an insurance adjuster, it is generally recommended that you complete your high school education.
There are some bachelors programs in areas of risk management and insurance theory, but there is an expectation that insurance professionals will continue education during their career. These educational opportunities come in the form of standard licensing exams and learning about new laws and policies as they are passed and applied.
The need for licensing varies by state, but successful licensing is usually necessary if you plan to have a career in selling insurance. Check with your state on the requirements associated with working as an insurance adjuster. You might also find it beneficial to maintain licensure to work in specific fields, like workers compensation or property and casualty.
A common path to becoming an insurance adjuster is through an entry-level position at an insurance company or third-party claims administration firm. Keep your focus on the handling and execution of claims, as opposed to selling or insurance or risk consulting. It is true that these areas can overlap, and there is much you can learn from your colleagues that are performing different functions in the insurance space, but having focus will allow you to excel in your career.
Introductory jobs like Claims Assistant or Claims Admin can provide you the hands-on experience of working on a team that is responsible for the end-to-end management and processing of insurance claims. Make it a goal to gain exposure to a variety of environments where claims occur. It is this varied experience that can help you build the context necessary to assess loss and come to a fair and accurate claim settlement as an insurance adjuster.
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Information on this page has been gathered by a multitude of sources and was most recently updated on July 2020.
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