Adjuster

What is an adjuster?

An adjuster, also known as an insurance adjuster or claims adjuster, is defined as the person who determines how much your insurance company will pay out when you file a claim.

What an adjuster does

Like a detective gathering clues to solve a crime, an adjuster gathers facts to establish what occurred, what’s covered under your insurance policy, and the amount you’re entitled to.

While some companies have begun experimenting with using artificial intelligence to do this work, today, almost all claims are investigated and have their payout determined by an adjuster.

How does an adjuster determine claim payouts?

When an adjuster is assigned a claim, their first step is determining whether the claim you’re filing is covered by the small business insurance you’ve purchased.

For example, let’s say your tools get damaged on the job so you file a claim to have them replaced. If you only have general liability, the adjuster will immediately deny your claim because general liability only covers property damage for those outside your business.

However, if you have tools and equipment insurance, your coverage matches your claim, and the adjuster will continue to gather information. (Tools and equipment is a general liability add-on coverage for contractors and cleaning businesses at NEXT.)

Depending on the type of claim, the adjuster may have to inspect the damage via photos or by seeing it for themselves. They may have to interview people involved in the incident to verify what’s been lost or exactly how the loss occurred.

If there are injuries, they may need to speak to the injured party or obtain medical records to determine what treatment has been offered. If the police, fire department, or any other public safety officials are involved, they’ll need to gather reports from them as well.

Once they have all the facts, they put them in a claim file and submit the file to your insurance company, along with a recommendation for how much you should receive for your claim.

Types of adjusters

In general, there are three types of adjusters: company adjusters, independent adjusters, and public adjusters.

Company and independent adjusters work for the insurance company. Company adjusters are insurance company employees, while independent adjusters are hired freelance or on contract to handle specific claims.

For the most part, company adjusters handle the day-to-day claims. Meanwhile, independent adjusters are brought in if there’s too much work or the insurer needs specialized experience to investigate a claim properly.

As both adjusters work for the insurance company, they get the claim settled as quickly as possible.

Public adjusters are also freelance, but instead of working for the insurance company, they work for a claimant. They go through all the steps a company or independent adjuster goes through but with the claimant’s interests in mind, not the insurance company’s.

This is because public adjusters are usually paid a percentage of your insurance settlement. Hence, they work to ensure you get every dollar you’re entitled to under your insurance policy.

For a small business owner, hiring a public adjuster doesn’t make sense if you feel shorted by a claim that is only a few hundred or thousand dollars. It’s probably not worth the adjuster’s fee.

But, if you suffer a major setback and the claim runs into hundreds of thousands of dollars, you might want a public adjuster’s assistance.

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