The Complex Role Of Insurance Adjusters: Navigating Third-Party Claims

An insurance adjuster, also known as a claims adjuster, is a person who investigates an insurance claim to determine if the insurer should pay for damage or injuries, and if so, how much they should pay. There are three main categories of insurance adjusters: company adjusters, independent adjusters, and public adjusters.

Company adjusters are employed directly by insurance companies and are sent to evaluate claims filed by the company's policyholders. Independent adjusters, on the other hand, are not directly employed by an insurance company but are hired by an insurer when a claim is made, thus providing third-party objectivity and greater perceived fairness to those filing a claim. Public adjusters are also independent but are hired by claimants rather than insurers to help them file a claim or if they believe the claim amount offered by the insurance company is incorrect.

Insurance adjusters are hired by insurance companies to evaluate claims

Insurance adjusters are professionals tasked with evaluating insurance claims to determine the insurance company's liability under the terms of the owner's policy. They are hired by insurance companies to inspect property damage or personal injury claims and decide how much the company should pay out for the loss.

Adjusters are often employed directly by insurance companies, but they can also be independent contractors or third-party adjusters hired by the insurance company when a claim is made. This provides an extra layer of objectivity and fairness for those filing a claim.

The role of an insurance adjuster involves investigating, evaluating, and settling insurance claims. They determine whether the insurance policy covers the loss claimed, how much the insurance company should pay, and whether claims are fraudulent. Adjusters inspect the property, interview the claimant and witnesses, and consult with other experts such as accountants, architects, engineers, and lawyers to make their assessments.

Adjusters also gather information, including photographs and statements, and prepare a report for claims examiners to review. Once the claim is approved, the adjuster negotiates with the policyholder and settles the claim. If the claimant contests the outcome, adjusters work with attorneys and expert witnesses to defend the insurer's position.

It is important to remember that insurance adjusters work for the insurance company and aim to settle claims as quickly and cheaply as possible. They may employ various tactics to limit the settlement amount, so claimants should be cautious when dealing with adjusters and may consider hiring a public adjuster or attorney to protect their interests.

They are not directly employed by the company but hired when a claim is made

Insurance adjusters play a crucial role in the claims process, but their employment status can vary. While some adjusters are direct employees of the insurance company, others are independent and are hired on a contract basis when a claim arises. These independent adjusters are known as "third-party" adjusters and are not part of the insurance company's permanent staff. This arrangement offers several advantages and is a common practice in the industry.

When an insurance company receives a claim, they may choose to assign it to an in-house adjuster or outsource it to a third-party firm or individual. Third-party adjusters are typically self-employed and offer their services to multiple insurance companies. They are specialized in handling specific types of claims and may be called upon when a particular expertise is required. For example, an adjuster might specialize in automotive, property, or liability claims and be hired accordingly. This flexibility allows insurance companies to access a wider pool of expertise and ensure that claims are handled efficiently and by adjusters with relevant experience.

Insurance companies opt for third-party adjusters for practical and economic reasons. During periods of high claim activity, such as after a natural disaster, the workload for adjusters can become overwhelming. In such scenarios, insurance companies may not have sufficient in-house adjusters to handle the surge in claims. Third-party adjusters provide a scalable solution, allowing insurance companies to quickly augment their adjusting capacity and manage the increased demand. This ensures that claims are processed promptly and policyholders receive timely service, even during peak periods.

Moreover, employing third-party adjusters can help insurance companies control costs. Maintaining a large in-house staff of adjusters who are fully employed year-round may not be economically feasible, especially for smaller insurance providers or those operating in regions with relatively low claim volumes. By engaging third-party adjusters as needed, insurance companies can avoid the overhead of a large permanent staff while still ensuring adequate resources to handle claims. This model allows for better cost management and helps keep insurance premiums competitive for consumers.

They are third-party professionals who provide objective assessments

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Public adjusters are hired by claimants, working on their behalf

Public adjusters are hired by claimants and work on their behalf to settle insurance claims. They are licensed professionals who work only for policyholders, not insurance companies. They are paid by the claimant, typically as a percentage of the final claim settlement.

Public adjusters are experts in insurance policies and claims. They help claimants understand their policies, evaluate and estimate property damage, gather claim information, file initial and supplemental claims, and negotiate with insurance companies and contractors. They save the claimant time and labour, and ensure they receive a fair payout.

Claimants may hire a public adjuster if they have a large or complex claim, if they feel the insurance company's adjuster has underestimated their claim, or if they need assistance with the claims process. Public adjusters can also help identify additional damage or missing items in a claim, and negotiate for a higher settlement.

It is best to hire a public adjuster early in the claims process so they can speak on the claimant's behalf from the beginning. When choosing a public adjuster, claimants should consider their experience, licensing, references, and fee structure.

Independent adjusters are hired by insurance companies but are not direct employees

An independent adjuster is a licensed professional who works on behalf of insurance companies to assess and determine the value of insurance claims. They are considered independent because they are not employed directly by the insurance company but are hired on a contract basis. Typically, they are contracted by a third-party claims-handling company or an "Independent Adjusting Firm" (IA Firm). These firms are hired by multiple insurance companies, and an independent adjuster can be contracted with multiple firms.

Independent adjusters are usually hired when there is a high volume of claims, often due to natural disasters or accidents, or when there is a need for specific expertise. They are paid based on the number and size of the claims handled, and they have the flexibility to choose the contracts and employers they prefer. This arrangement allows them to earn higher incomes compared to staff adjusters, who are direct employees of the insurance company.

It's important to distinguish independent adjusters from public adjusters. While independent adjusters work on behalf of insurance companies, public adjusters are hired by individuals or businesses to assist in assessing damages, filing claims, and negotiating with insurers to obtain the maximum payout. Public adjusters are experts in insurance policies and claims processes, often with experience in construction or related fields. They charge a fee, typically a percentage of the claim amount, and are paid from the insurance payout.

In summary, independent adjusters are hired by insurance companies but are not direct employees. They provide third-party objectivity and greater perceived fairness to those filing claims. They are valuable resources for insurance companies, especially during periods of high claim volume, and they offer flexibility and specialized knowledge.

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