In 2019, insured property damage from winter storms cracked $2 billion. It’s not a big surprise much of that damage was inflicted on roofs.
Of course, winter storm weather also brings about things like power loss and heat loss. Heat loss leads to frozen and burst pipes, which creates water damage when the power and heat kick back on.
Following property damage from things like winter storms, insured property owners routinely file claims with their insurance companies. If you’ve never filed a claim before, you might not realize that this is when insurance adjusters enter the picture.
Making it even more complicated, there are several kinds of insurance adjusters. Keep reading and we’ll cover the different types of adjusters and what they do.
Company Adjuster
An insurance company has two important responsibilities. It must cover insured damages for its policyholders. It must also make sure it doesn’t overpay on insurance claims, which damages the company’s financial health.
To accomplish these two goals, insurance companies hire people for insurance adjuster jobs.
What a Company Adjuster Does
The job of the claims carries several duties. One of the main duties an adjuster must carry out is a liability assessment. In essence, they decide how much blame their customer holds for the damage or injury.
Say you get into a car accident. The adjuster will assess if you did anything that would let the company off the hook for some or all of the damages to your vehicle or the other person’s vehicle.
The adjuster must also assess the extent or value of the damage. Take the winter storm damage discussed above. An adjuster will likely visit your home to take a first-hand look at the damage.
After carrying out that assessment, they can come up with a settlement offer based on the limits of your policy and the average costs of repairs.
Adjusters must also file reports with the insurance company and will frequently take a hand in connecting you with preferred service providers.
Potential Conflict of Interest
In theory, an adjuster’s job entails dispassionately reviewing the damage and evidence. After that, they provide you with a fair settlement offer.
The reality is more complex. Since company adjusters work directly for the insurance company, they can come under pressure to minimize claim amounts. Smaller claim amounts mean higher profits and happier executives.
While most adjusters will make an honest effort to provide you with a fair offer, they cannot help that influence from above will influence them.
Independent Insurance Adjuster
The term independent adjuster gives a slightly misleading air to the position. These adjusters still work on behalf of insurance companies. They are independent only in the sense that the insurance company doesn’t employ them directly.
In many instances, such as major storms or natural disasters, an insurance company simply lacks the number of adjusters it needs in a given area. Rather than try to hire more people in a hurry, insurance companies essentially farm out the work to third-party companies.
These independent insurance adjusters then go out in place of a company adjuster.
Independent Adjuster Duties
Independent adjusters carry the same duties as a company adjuster. They evaluate claims and make recommendations about settlements.
Since independent adjusters routinely work in areas facing a recent disaster, they often get spared from most of the issues around determining liability. They go into the situation primarily to confirm the existence and extent of the damage and make a settlement recommendation.
Limited Conflict of Interest
Independent adjusters typically do better with avoiding conflicts of interest. Since they don’t work directly for the insurance company they represent, they come under less pressure to limit claim amounts. That lack of pressure lets them make more objective assessments.
Public Insurance Adjuster
Much like the term independent adjuster, the term public insurance adjuster can give a misleading impression. Public adjusters typically work for themselves and hire out their services to homeowners and occasionally to state or local governments. They are public in the sense that they work for members of the public, rather than for an insurance company.
Public Adjuster Duties
A public adjuster’s main job isn’t that different from a company or independent adjuster. They come in and assess the damage. Then they come up with a number they think is appropriate based on your insurance policy.
Policyholders often hire a public adjuster if they believe their insurance company is making a low-ball offer on a claim or ignoring damage that the policy should cover. The policyholder can give the public adjuster’s report to their insurance company as a kind of counter-offer.
Conflict of Interest
Public adjusters typically work on commission. Since they also work for you, they may have a vested interest in exaggerating claims to drive up the insurance company’s offer. If you hire a public adjuster, do some research ahead of time to make sure the adjuster has a solid reputation for integrity.
Licenses
The issue of the insurance adjuster license remains a tricky one.
Some states don’t impose any license requirements. Other states require all adjuster to go through a rigorous process of coursework and a mandatory exam. Still other states fall somewhere in the middle.
A license doesn’t necessarily make someone better qualified. An unlicensed adjuster with 20 years of experience is likely far better qualified than someone who just passed their exam. What a license does offer you is some assurance that the adjuster possesses a baseline of working knowledge about claims adjusting.
Insurance Adjusters and You
Insurance adjusters work for all branches of the insurance industry. That means that, if you hold an insurance policy, you will likely meet up with an adjuster at some point in your life.
Understanding an adjuster’s duties and potential conflict of interest can help you approach the situation with open eyes. If it seems like a company or independent adjuster is low-balling your claim, you may need a public adjuster’s help to counter that offer.
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