What Does an Insurance Adjuster Do?

It’s common to hear the title — insurance adjuster, but what does this title mean?  In this article, we will explain the job description of an insurance adjuster and provide information about the process that is involved in this job, as well. 

Insurance adjusters are employed either by the insurance company or by an individual to settle claims on their behalf.  When an accident occurs, the insurance company sends the adjuster to the scene to assess the damage and to determine the amount of money needed to repair the damage of the insured car or home.  This individual evaluates and researches the details of the claim in order to make their own settlement recommendations to the insurance company. 

When evaluating a claim, the insurance adjuster overviews any pertinent information regarding the residence.  This information can include the location of the home, including the distance from the residence to the fire department.  A home that is more distant to the local fire department or water source is at a higher risk of sustaining damage caused by smoke and/or fire.  The length of time a home is on fire affects the cost to clean or repair it, therefore, the longer the home is burning, the more the cost will be to clean or repair it.  If the home is left too long without putting out the fire, the home may be considered a total loss. 

In addition, an adjuster overviews the size of the home, the building materials used to build the home and the structure to determine whether the insured has purchased enough coverage.  Moreover, the adjuster evaluates the crime rate in the area because the higher the crime, the higher the cost will be to insure the home. 

If the claim is for a vehicle, the insurance adjuster must contact various mechanics to determine the approximate cost of the parts and labor.  If the damages are more than the value of the vehicle, the damages will be written off.  If the vehicle is written off, the insurance will replace the cost of the vehicle based on its book value, which could be less or more than the actual value of the vehicle. 

The adjuster compiles the appropriate data and then overviews the applicant’s credit report to determine if the individual is capable of paying the premiums.  Applicants with an excessive amount of late payments or unpaid debts will have counts again them.  The reason for this is insurance companies believe that insured individuals with low incomes may have difficulty in paying their premium.  In addition, individuals with large amounts of debt compared to their income often have difficulty maintaining the payments for the premiums, as well.  If an applicant has bad credit, a higher premium will be suggested. 

In addition to examining the credit report, insurance adjusters also overview the claim applicant’s CLUE report, which provides information about past insurance claims in the last five years.  It’s important to remember that any claim (no matter how big or small) shows up on the CLUE report and can potentially count against a claim — ultimately leading to higher premiums or even denial of coverage. 

When the claim has been thoroughly evaluated, the insurance adjuster will suggest the appropriate amount that the insurance company must pay.  This process typically involves two quotes: the maximum determined amount it would take to have a top mechanic or construction company to make the repairs and the minimum amount (in the form of a cash settlement) to get the work done by the company or mechanic’s garage of their choosing.  When the person making the claim decides which option they prefer, the insurance company issues a check.  If the vehicle or home is paid off at the time the check is issued, they will receive the entire check.  However, if there are still payments on the home of vehicle, the check will be made out to the person making the claim and the lender. 

The insurance adjuster’s job description is simply to assess the damages and to determine the appropriate amount to cover the cost of the repair.

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