Understanding the Role of Claims Adjusters in the Insurance Industry

Claims adjusters play a crucial role in the insurance industry, serving either insurance companies or as independent contractors. This article delves into the differences between company claims adjusters and independent claims adjusters, their roles, and the challenges they face.

Company Claims Adjusters: Loyalists to the Core

Role and Goals

Most claims adjusters work for insurance companies, positioning themselves to uphold the insurer's interests above all others. The primary goal for company claims adjusters is to keep the average claim cost well below industry averages. To achieve this, they often settle claims for significantly less than the policyholders are entitled to, sometimes even settling multi-hundred-thousand-dollar claims for minimal sums. This can mean depriving policyholders of substantial benefits they deserve and paid premiums for.

Rewards and Promotions

The path to success for a company claims adjuster includes achieving an average claim cost below the industry standard, and promotions and bonuses are awarded for settling large claims at extremely favorable terms. For example, settling a $100,000 claim for $10,000 is a significant achievement and can lead to advanced roles, high bonuses, and opportunities to teach others in the industry on how to "work the system" to the benefit of the insurance company.

Independent Claims Adjusters: Advocates for Policyholders?

Role and Beliefs

Independent claims adjusters, while few in number, operate outside the direct control of insurance companies. Theoretically, they are free to advocate for policyholders and ensure they receive the full benefits they are entitled to. However, in practice, these adjusters can face serious challenges from insurance companies. Companies can dispute independent adjuster recommendations, tie them up in legal battles, and force them to attend court proceedings. This can make it challenging for independent adjusters to stand their ground without facing significant legal and financial repercussions.

Striving for Balance

Despite this, experienced independent claims adjusters must find a balance between advocating for policyholders and maintaining their own professional integrity. Settling too high can result in unwarranted legal action from insurance companies, which can be financially ruinous. Therefore, they must be strategic and choose their battles, often opting to be advocates for policyholders while understanding the consequences of going too far.

The Unseen Commonality Among Claims Adjusters

Shared Professional Environment

Regardless of whether they work for an insurance company or as an independent adjuster, claims adjusters share a unique community. They attend professional meetings, take the same insurance courses, attend continuing education classes, and often have friends on both sides of the industry. Many live in the same neighborhoods, join the same country clubs, and even worship at the same places of worship. This shared environment fosters a sense of camaraderie and mutual understanding, but also creates complex professional dynamics.

Conclusion

The world of claims adjusting is a nuanced and complex one, influenced not only by professional goals but also by personal and social factors. Understanding the roles and motivations of company and independent claims adjusters can provide valuable insights into the insurance industry and the dynamics at play in claim settlements.