Auto Insurance Adjusters: Salary Secrets Revealed

Auto insurance adjusters' salaries vary depending on their experience level, location, and the company they work for. In general, there are two types of adjusters: staff adjusters, who are salaried employees of an insurance company, and independent adjusters, who are independent contractors. Staff adjusters typically earn between $40,000 and $70,000 per year, while independent adjusters can make over $100,000 per year, especially when handling catastrophe claims. The average salary for an auto insurance adjuster in the United States is around $52,000 to $65,000 per year, but this can range from $38,000 for entry-level positions to over $80,000 for senior-level positions.

Staff adjusters vs. independent adjusters

Staff adjusters, also known as company adjusters or employee adjusters, are direct employees of an insurance company. They are usually paid a salary, with some benefits, and work on claims for a single insurance company. Staff adjusters have a consistent workload and access to training and support, but they have less control over the claims they handle and may have a lower earning potential compared to independent adjusters.

On the other hand, independent adjusters are typically contracted by third-party claims-handling companies, known as Independent Adjusting Firms (IA Firms), and work as representatives of the insurance company. They are usually paid per claim and have the potential to earn more if they work on more claims. Independent adjusters have more control over their schedules and can work from anywhere, giving them greater flexibility. They also have the opportunity to work on a wider variety of claims for multiple insurance companies.

One of the main differences between staff and independent adjusters lies in their employment structure and the level of autonomy they enjoy. Staff adjusters have a more traditional employment setup, receiving benefits and a consistent salary from their insurance company employer. On the contrary, independent adjusters are often independent contractors, enjoying greater flexibility and higher earning potential but bearing more expenses and receiving less support.

In terms of workload and variety, staff adjusters work exclusively for one insurance company, handling a range of claims, including auto accidents, property damage, and commercial insurance claims. They have a steady stream of work and consistent reimbursement procedures. In contrast, independent adjusters work for multiple insurance providers, handling a diverse range of claims. They have more variety in their work but may experience periods of low or no work, leading to inconsistent income.

Another distinction is the level of control and autonomy in handling claims. Staff adjusters have less discretion in deciding how to handle claims, as they follow the procedures and guidelines set by their employer. Conversely, independent adjusters have more autonomy and control over the claims they handle, allowing them to make decisions and advocate for the claimant directly.

Salary range

The salary of an auto insurance adjuster in the United States can vary depending on a range of factors, including location, education, experience, and the company they work for. The average salary for this role is around $60,000 per year, but this can range from $38,000 for entry-level positions to over $100,000 for experienced adjusters in certain states.

For example, the average salary for an auto claims adjuster in Alaska, New Jersey, and California are among the highest in the country, while the lowest average salaries are found in Arkansas, Arizona, and Wyoming. Additionally, salaries can differ between staff adjusters, who are salaried employees of an insurance carrier, and independent adjusters, who are independent contractors. Staff adjusters typically earn between $40,000 and $70,000 per year, while independent adjusters have the potential to earn over $100,000 annually, especially if they are licensed to operate in multiple states and handle catastrophic claims.

The way auto insurance adjusters are paid also varies; some are paid a salary, while others are paid hourly or on a fee schedule, which is a sliding scale based on the amount of the claim. Independent adjusters usually earn a percentage of the claim amount, while staff adjusters receive a fixed annual salary from their employer.

Bonuses

Independent adjusters, who are independent contractors, often earn a percentage of the amount of each claim they settle. This payment structure is known as a "fee schedule," and it can vary widely between insurance companies and independent adjuster firms. For example, an independent adjuster handling hurricane claims might receive a fee schedule that pays $500 for claims between $3,000 and $5,000, $650 for claims between $5,000 and $7,500, and $750 for claims between $7,500 and $10,000. With a good understanding of the fee schedule and a high volume of claims settled, an independent adjuster can earn well over $1,000 per day.

In addition to the fee schedule, independent adjusters may also receive bonuses based on their performance and the demand for their services. Veteran adjusters with years of experience are often able to negotiate better fee schedules. During periods of high demand, such as after a series of natural disasters, employers may offer more lucrative fee schedules to attract adjusters away from their competitors. This dynamic can result in significant bonuses and incentives for in-demand independent adjusters.

Company or staff adjusters, who are salaried employees of an insurance carrier, may also receive annual bonuses on top of their base salary. While their salaries are typically lower than those of independent adjusters, ranging from $40,000 to $70,000, staff adjusters enjoy the stability of a consistent salary and benefits such as insurance, vacation, and sick leave.

Overall, bonuses and incentives play a significant role in the compensation of insurance adjusters, especially for independent adjusters who have the potential to earn six-figure incomes during periods of high demand.

Fee schedules

A fee schedule is a document that outlines how much an insurance company will be charged for each claim for adjusting services. The fee schedule is an accounting method where the insurance company reimburses the independent adjuster firm for each settled claim. The fee is calculated as a percentage of the overall claim settlement amount or on a graded scale. The fee schedule is formulated differently for each insurance carrier represented and storm situation confronted.

The fee schedule amount is then split between the firm and the individual independent adjuster who handled the claim. Typically, the adjuster will receive between 55-70% of the fee, with the remaining 30-40% going to the adjusting firm. For example, on a $10,000 claim, an adjuster should take home somewhere between $550 and $700.

The percentage of the fee schedule that an adjuster receives is determined by several factors, including experience level, the type of catastrophe or severity of claims, location, and qualifications. During periods of high demand for adjusters, such as after the 2017 hurricanes, employers may offer more competitive fee schedules to attract adjusters.

For auto claims, it is standard for adjusters to earn a flat fee plus any mileage on their completed claim. Adjusters for catastrophic auto insurance often earn around $500 per day. In contrast, independent adjusters working on property claims earn a percentage of the fee schedule, which can result in several hundred dollars per claim, depending on the amount of the loss.

Pay by state

The salary of an auto insurance adjuster in the United States varies depending on the state, experience level, and type of adjuster.

Alaska

Alaska is the highest-paying state for auto claims adjusters, with an average salary of $75,901.

New Jersey

New Jersey is one of the highest-paying states for auto claims adjusters, with Jersey City offering the highest salaries in the country. The average salary for auto claims adjusters in New Jersey is $52,253.

California

California is among the highest-paying states for auto claims adjusters, with San Francisco being one of the highest-paying cities. The average salary for auto claims adjusters in California is expected to be around $52,253.

Arkansas

Arkansas is one of the lowest-paying states for auto claims adjusters, with an average salary that falls below the national average.

Arizona

Arizona is another state with a lower average salary for auto claims adjusters, with Phoenix being one of the cities with the lowest salaries for this profession.

Wyoming

Wyoming is reported to be one of the lowest-paying states for auto claims adjusters, with salaries falling below the national average.

Frequently asked questions