Insurance industry insiders use a LOT of terminology that is completely foreign to the rest of the world. Even the simplest sounding words, such as “adjuster,” “reservation of rights,” and “risk” take on entirely new meanings when used in the insurance industry.
What is an Adjuster?
The short definition: Someone who investigates and analyzes an insurance claim to determine how much it is worth. For example, let’s say you have Homeowner’s Insurance for your home, and the house catches fire. Once the fire is out and the flames have subsided, you call your insurance company to make a claim. The claims representative will tell you they are sending their adjuster to investigate the damage. The adjuster is supposed to look at the damage and determine how much money your insurance company owes you.
How are Adjusters Special?
Adjusters must have a relevant background in insurance and take a written examination before obtaining their insurance adjuster’s license. Basically, they need to have knowledge of insurance principles, the insurance claims process, and insurance laws.
What kind of Claims do they Adjust?
Adjusters work solely on property claims – such as claims for damages to homes, office buildings, personal property items, automobiles, and boats. For example, you won’t see an adjuster’s involvement in a medical or disability insurance claim.
What is a Public Adjuster?
Public Adjusters are adjusters who work only for the policyholder. For example, if your house is damaged by fire, you can contact a Public Adjuster to represent your interests when you make your insurance claim. Public Adjusters make a skilled analysis of the damage, prepare all the insurance claim forms on your behalf, and negotiate a settlement with your insurance company.
Since insurance companies routinely attempt to undersettle valid claims (this is called insurance bad faith and is ILLEGAL) by “neglecting” to properly assess the covered damages and offering ridiculously low sums as final payment, the services of Public Adjusters have become increasingly valuable. In 2010 the state government of Florida discovered that, on average, the involvement of a Public Adjuster increased claims payments by an incredible 88% (See Florida Legislature Office of Program Policy Analysis and Government Accountability report, page 7).
For more on Public Adjusters, visit the Defever Law blog.
What is an Independent Adjuster?
So-called Independent Adjusters are adjusters that insurance companies hire if they do not have on-staff adjusters of their own. Most insurance companies have their own force of adjusters, but as economic times change, insurers sometime opt to hire only independent adjusters and eliminate their in-house staff entirely.