What Is an Insurance Adjuster?

Insurance Adjuster Explained in Less Than 5 Minutes

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An insurance adjuster is a person who settles insurance claims. The individual investigates the loss and determines the amount of any loss, claim, or damage an insurance company should pay you. An insurance company may hire independent adjusters from independent adjusting bureaus or rely on its own adjusters (staff adjusters).

Consumers can also hire public insurance adjusters, who are usually licensed by your state’s division of insurance. Public insurance adjusters are not tied to any particular insurance carrier and they charge a fee for their services, such as up to 10% of the final payout from your insurer.

Learn more about what an insurance adjuster is, how they work, and the types of insurance adjusters available.

Definition and Examples of an Insurance Adjuster

An insurance adjuster inspects property damage or investigates personal injury claims to determine how much the insurance company should pay you for the loss. The adjuster is tasked with establishing the circumstances that caused the loss, including the how, when, where, and why.

Let’s say a branch from a tree in your neighbor’s yard fell onto your property, damaging your roof and fence at the same time. Who will pay? How much? This is where an insurance adjuster comes in.

The insurance adjuster will visit your property, document the damage and scene with photos, assess the amount of damage, speak with your neighbor and yourself, and interview any witnesses. They may also consult with roofing and fencing companies. Upon concluding the investigation, they will write a report recommending how much your insurance company should pay for the loss or damage.

  • Alternate name: Claims adjuster

An insurance adjuster must establish the value and worth of the claim and ultimately negotiate an agreement, authorize payment, or reject the claim.

How an Insurance Adjuster Works

In property insurance, an adjuster examines physical damage, the circumstances that led to the damage, and what’s required to repair it. In liability insurance, an adjuster coordinates a policyholder’s defense and helps in settling negotiations.

Other responsibilities insurance adjusters carry include:

  • Researching, detailing, and verifying damage to buildings and the contents and any additional expenses a policyholder incurs
  • Evaluating business interruption losses and extra expense claims for businesses
  • Determining the values for settling covered claims
  • Preparing, documenting, and supporting claims

To accurately establish the worth and value of the claim, an insurance adjuster will start by inspecting the property—such as a home, business, or car—to determine the extent of damage and the overall cost of repairing the property. They may also interview the claimant and witnesses and conduct additional research, say, by reviewing police reports.

Insurance adjusters may also consult with other experts, such as roofers, architects, engineers, and physicians, for more expert evaluations of a claim.

An adjuster must gather information in order to investigate the claim and whether it should be paid. This may include photographs and statements that are either written or recorded on audio or video.

With all this information at hand, the adjuster compiles a report describing the incidents and recommendations for the claim payout. The adjuster submits the report for the insurance company’s claims examiners to review. When the claim is approved, an insurance adjuster negotiates with the policyholder and settles the claim.

If a policyholder challenges the outcome of the claim or settlement, adjusters work with expert witnesses and attorneys to uphold the insurer’s verdict.

Types of Insurance Adjusters

Public Insurance Adjusters

A public insurance adjuster is licensed by your state’s division of insurance to contract with and represent an insured who has suffered a covered loss. The adjuster works for and is paid by the policyholder, usually a percentage of the final claim settlement. A public adjuster represents the policyholder in dealing with the insurance company and makes decisions regarding the claim on the policyholder’s behalf.

The public adjuster’s service fee is negotiable and the amount or percentage isn’t set by law.

Remember, an insurance company may or may not agree with a public adjuster’s estimate of your damage. It also has no obligation to accept the damages reported by the adjuster. The insurance company will only settle your claim as per the terms and conditions of your policy.

Before hiring a public adjuster, verify that they hold a current public insurance adjuster’s license and are in good standing with your state’s division of insurance.

Independent Insurance Adjusters

An independent adjuster contracts and represents insurance companies, not individuals, in investigating and settling claims. The adjuster is typically from an independent adjusting bureau, so they have no association with an insurance company.

In other cases, insurance companies may work with staff adjusters, who are usually salaried employees of the insurance company. Staff adjusters strive to save as much money for the insurance company as possible.

Staff adjusters don’t necessarily need a license from your state’s division of insurance since they can operate under the insurance company’s license.

Key Takeaways

  • Insurance adjusters investigate and evaluate property damage or personal-injury claims to determine the amount an insurer should pay you to settle a claim.
  • You typically have the option of working with an insurance company’s adjuster or also hiring a public insurance adjuster to work on your behalf.
  • An insurance company may have its own staff adjusters or hire independent ones.
  • An insurance adjuster may consult industry experts, like engineers, architects, and lawyers, for more expert assessments of a claim.