New to insurance claims and need a primer on insurance adjusters and who they work for? Here’s a quick explainer on property insurance adjusters.
Who are insurance adjusters and what do they do?
An adjuster is a professional who investigates insurance claims and determines how much an insurance company should pay on the claim. To do this, a property adjuster typically completes two basic tasks. First, they inspect your property to understand the nature and scope of your losses. Second, using that inspection and any additional documentation that you’ve sent to them, they determine how much you’re owed under your insurance policy. Since the purpose of insurance is to receive payment for covered losses, it’s hard to overstate how important adjusters are to the functioning of insurance.
What are the different types of property insurance adjusters?
Technically, there are three types of adjusters: company/staff adjusters, independent adjusters, and public adjusters. Company adjusters, also known as staff adjusters, are employees of an insurance company and work only for that insurance company. Independent adjusters, confusingly, also work for insurance companies – only instead of working as an employee of one insurance company, they contract out their services to multiple insurers, depending on the need. Public adjusters, by contrast, work for homeowners and other policyholders who pay the public adjusters to help process and negotiate their claim. To learn more specifically about public adjusters, check out our explainer on public adjusters.
So from the perspective of a homeowner, the important distinction is between company/staff adjusters and independent adjusters, all of whom work for and are paid by insurance companies, and public adjusters, who work for and are paid by policyholders.
What is the difference between independent adjusters and public adjusters?
Independent adjusters are independent contractors but they work exclusively for insurance companies. Public adjusters work exclusively for policyholders, but they usually take a cut (commission) of the proceeds from your claim.
Still confused? The chart below helps to clarify the differences between adjusters.
Do adjusters need a license?
Almost always. Every state has laws that regulate the practice of adjusting and require adjusters to meet certain criteria before they are permitted to adjust losses for others. Although those laws do not always apply to every type of adjuster (Alabama, for instance, doesn’t have laws specifically applying to public adjusting), they generally do apply to adjusters who work for insurance companies. These insurance company adjusters – that is, staff/company adjusters or independent adjusters – either need to obtain a license to adjust or be registered by the insurance company that hires them as a qualified adjuster for the insurance company.
During declared emergencies, states often relax the licensing or registration requirements for insurance company adjusters. In Florida, for instance, the Florida Department of Insurance may issue special emergency adjusting licenses to insurance company adjusters if the insurance company self-certifies those individuals as qualified. Fl. Stat. 626.859. The tradeoff here is speed versus quality. The demand for adjusters following a catastrophe like a hurricane is overwhelming, so these emergency rules get adjusters to homes faster, which helps policyholders. With these relaxed standards, however, comes the inevitable downside of lower quality.
In Florida, insurance agents may also be permitted to adjust losses on behalf of the insurance company. Fl. Stat. 626.862
How can I verify that my adjuster is properly licensed or registered?
Any adjuster working on your claim — especially a homeowner’s claim — should give you written proof of its license or registration upon request before beginning to inspect damage to your home.
In Florida, for instance, any adjuster assigned by your insurance company to inspect damage to your home must provide you with a printed or electronic document containing his or her name and state adjuster license number. Fl. Stat 627.70131(3). Any subsequent communication between you and an insurance company adjuster regarding your claim must also include the name and license number of the adjuster. Fl. Stat. 627.70131(3).