A lot of people hate insurance adjusters, believing that they are what is standing between you and a pile full of cash. But, do you know what an insurance adjuster does? Most people don’t. Here’s what they do, and how to handle them when they are working on your claim.
First, Understand What They Do
An insurance adjuster works either as an independent agent or directly for the insurance company. The adjuster’s job is to investigate claims made by individuals and assess damages or losses incurred that are payable under the insurance policy.
Most property and casualty insurance policies list perils for which a policyholder can file a claim against. When the named peril occurs, and a policyholder suffers a loss, an insurance adjuster analyzes the situation and tries to determine the best possible course of action which will result in a fair payment to the policyholder.
Some people believe that adjusters serve as gatekeepers for insurance companies, helping them keep more of policyholders’ money, shuttling legitimate claims, and denying payments.
While there are likely some adjusters out there who do this, a dishonest adjuster becomes a liability for the insurance company, which can be sued by policyholders for non-payment of a valid claim.
Because the insurer has a responsibility to all policyholders to pay valid claims, the insurer must make fiscally sound decisions about how much to pay for each loss. Sometimes, a policyholder won’t agree with an adjuster, and this is where the negative perception of the adjuster comes in.
The Claims Process
The claims process is fairly straightforward. First, the policyholder calls the insurance company, notifying them of a loss they believe is covered under their insurance policy. Next, an insurance adjuster visits the individual to assess the nature of the loss and tries to estimate the damages to the policyholder.
Finally, the adjuster makes an offer to settle the claim. This settlement offer is supposed to be for an amount which will pay for all of the damage to the insured’s property. Depending on the policy, however, it may not be enough to replace the loss of the item.
Some policies only cover the cash value of the item in question.
When “cash value” replacement is elected at policy issue, an insurance company is only responsible for the full market value at the time of the loss. In other words, the policyholder will have to accept that he or she will not get the full replacement value of the loss due to depreciation of the item.
For example, if a policyholder has the contents of his home insured under a “cash value” type policy, then he will only get the market value of those items at the time of the loss. If the policyholder has old items which have depreciated in value, they may not be worth much, so the claim amount will be rather small.
Contrast this to “full replacement value.” This is a method of adjusting where the insurance adjuster can offer the full replacement value for all items covered under the policy. So, continuing with the same example, if the policyholder suffered a loss of the contents in the home, he or she would be entitled to an amount of money which would be sufficient to buy new items of the same or similar quality.
Obviously, this results in much more money being paid out.
Protecting Yourself From A Stingy Adjuster
Some insurance adjusters just want to successfully resolve a claim in a fair and equitable manner. But, some are out to minimize the amount of the payout. And, they must get an approval from their supervisor to pay out more than their authorization limit.
In other words, while adjusters may not necessarily be out to get you, some of them aren’t exactly on your side, either. A good Personal Injury Lawyer can help you by being the counterbalance to the opinion of the adjuster, assessing whether you’re being treated fairly during the claims process.
Sample Questions You Might Be Asked
You should hire a lawyer if you meet with an adjuster personally, or if you don’t understand the claims process. An adjuster is trained to ask you for information like your name, the date and time of the incident, pictures of the accident and damage, a copy of the police report, copies of medical bills and documentation from your medical care provider to prove injury, and the costs of your initial hospital stay, if there was one.
Your answers to these questions influence how much money is paid out to you.
Peter Ticktin is an insurance claims associate. He likes sharing his insights online. His articles can be found on many legal and insurance websites.