Shuman Roy is an entrepreneur, business owner, and musician. He started RoysNoys, LLC in 2013 as a music production and education service company. He also offers small business consulting and advisory services to help businesses get from start-up mode to turn-key operations. Shuman earned his M.B.A from the Stern School of Business in 2001 and has an undergraduate degree from Manhattan College in ...

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Joel Ohman is the CEO of a private equity-backed digital media company. He is a CERTIFIED FINANCIAL PLANNER™, author, angel investor, and serial entrepreneur who loves creating new things, whether books or businesses. He has also previously served as the founder and resident CFP® of a national insurance agency, Real Time Health Quotes. He has an MBA from the University of South Florida. Joel...

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Reviewed by Joel Ohman
Founder, CFP®

UPDATED: Jul 19, 2021

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An “insurance adjuster,” frequently referred to as a “claims adjuster,” is either your best friend…or your worst enemy; depending on whether or not you agree with their valuation of your property or liability claim.

If you’re reading this article, you’re probably currently involved in an insurance claim.

What Do Insurance Adjusters Do?

An insurance adjuster is the individual who basically determines how much money an insurance company will pay for a liability or property damage claim. Your adjuster will investigate the claim from every angle necessary to settle the claim.

Investigation may include interviewing witnesses, reading police reports, reviewing medical records, and/or evaluating damaged property.

It can be argued that insurance adjusters have the hardest insurance-related job.

First, they are often dealing with people who have suffered a loss of some sort and may already not be in the best mood.

Secondly, many people expect to get huge sums of money as the result of an insurance claim (and don’t), so you’ve got a position that deals with a lot of conflict.

That said, there is a high turnover rate when it comes to insurance claims. Many people simply cannot deal with the stress of the job and the treatment they receive by the people whose claims they are adjusting.

In fact, insurance claims sometimes take so long that you might have one insurance adjuster quit and another take your case. This can be frustrating, as the whole process tends to repeat itself.

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Types of Insurance Adjusters

1. Insurance Company Staff Adjusters: These individuals work for the insurance company who will be paying the claim. Large insurance companies operating in multiple states typically have this type of insurance adjuster on staff. Staffers may or may not leave the building they work in to settle claims, depending on the circumstances or severity of a claim.

2. Independent Adjusters: Hired guns, these are insurance adjusters who work independently of the insurance company, but are hired to settle claims. Independent adjusters are commonly used by smaller insurers or companies that do not have a physical location in a particular state where they offer insurance.

3. Claims Service Reps (also known as CSR’s): These insurance adjusters may work for an insurance company or an independent adjuster. They may handle smaller claims, such as a broken windshield, which does not require intensive investigation to settle.

4. Public Adjusters: These are insurance adjusters who work for the policyholder or claimant. You would be looking to a public adjuster if you cannot reach an agreement with the insurance company’s adjuster over the settlement offered for your claim. The public adjuster’s findings may be used as evidence in a court case if your claim goes that far.

5. Insurance Agents: Although relatively uncommon, some insurance agents have authority to settle minor claims for a company they represent. Again, we are looking at cracked windshields, and in some cases, weather related claims; a hail claim for example.

Settling First Party Claims

These are your property damage claims, as in most cases you cannot file a liability claim against yourself.

Note: you may also file a liability claim against your own insurance company under the uninsured motorist coverage of your own personal auto policy.

A dollar value must be determined when a piece of property, a home or a car for example, is damaged, either by the owner or a third party (depending on the type of coverage you purchased) and a claim is filed.

The adjuster is also the person who determines if your car is totaled or not.

There are too many variables concerning coverage for the scope of this article, but at the end of the day, the adjuster has the final word…that is unless you or the third party involved doesn’t agree with the evaluation, which may result in mediation or a lawsuit to settle a claim.

For example, if you purchased an actual cash value loss settlement policy, you are at the mercy of the insurance adjuster’s view of the depreciated value of the property in question.

The process is a slightly more streamlined when a replacement cost policy has been purchased, as your property is typically replaced with new property of “like kind and quality.”

Settling Third Party Claims

These types of claims are often more complicated, as there is always a third party involved in the process. The third party is the individual or entity that is not part of the insurance contract between you and your insurer.

For example, if working on a bodily injury claim, the insurance adjuster will need to determine a fair amount of money to indemnify the injured person.

A property damage claim can be a liability claim, as you may be held liable for damage you cause to property as a result of your negligence. The easiest example of property damage liability would be when you are found to be at fault for an auto accident in which you hit someone’s car.

Your best bet is to cooperate with an insurance adjuster and let them do their job.

If you don’t agree with their findings you may seek to work with a public adjuster and/or hire an attorney to get your claim settled more in your favor.

Read more: What to do when your insurance company won’t pay your car insurance claim.

(photo: Marco Verch)