How Insurance Adjusters Work

        Insurance claims adjusters come with different titles, such as claims specialist, claims representative, or independent claims analyst, but they all do the same job. Understanding who claims adjusters are and how they work to resolve an injury-related insurance claim lets you find that they have no real advantage over you in the negotiation process. Indeed, by having a good understanding of the facts of your own claim, you may properly have an advantage over them.

The Part of the Insurance Adjuster

When you have filed a claim against someone you believe was responsible for your accident, normally the negotiation process will be with a claims adjuster for that person’s liability insurance company.

Occasionally, a claim is not handled by an insurance company’s own adjuster, but instead is referred to a firm of independent insurance adjusters. Insurance companies often do this if they do not have a local claims office in a particular area.

Independent claims adjusters representing an insurance com­pany operate the same as in-house claims adjusters. The only difference is that they may have a lower authority limit within which to settle a case and therefore must have your settle­ment amount approved by way of a claims supervisor at an insurance company office. The negotiation process, however, is exactly the same.

General public entities such as state governments or big cities that receive lots of claims often have their own claims adjustment offices. The negotiation process with these national government claims adjusters works the same as with private insurance adjusters. The only notable difference in negotiating with an authorities claims adjuster is that if a claim eventually winds up in court, judges and juries tend not to become overly generous in awarding damages with public money. For this reason, authorities entity adjusters are usually tighter with settlement money than private insurance adjusters. For those who have a claim against a general public entity, expect your settlement to become 10% to 25% lower than if it were against a private party.

It sometimes happens that even though you have not filed a lawsuit, an attorney is available by you -- instead of a claims adjuster negotiating with you in relation to your claim. Self-insured corporations and some insurance companies without a local claims office sometimes use either their own staff attorney or a local attorney as a claims adjuster. And authorities entities have associate city, county, or state attorneys who deal directly with accident claims actually before they get to court.

If an attorney is handling your claim instead of a claims adjuster, don’t panic. In the claims negotiation process, a lawyer cannot do anything different from a non-attorney claims adjuster. A lawyer may bluff a little more than a claims adjuster about the statutory law regarding negligence and liability, but there are easy techniques to call that kind of bluff.

If you file a claim under your own car collision, uninsured, or underinsured motorist coverage, you do not negotiate a settlement with your own insurance agent. All an agent can do can be refer your claim to the claims department and then it is completely out from the agent’s hands. You will then negotiate an injury settlement with a claims adjuster who will be acting as the company’s representative, not yours.

How Adjusters Settle Claims

The job performance of insurance adjusters is judged not only by how little of the insurance company’s money they spend in settlements but also by how quickly they settle claims. Most adjusters get between 50 and 100 new claims a full month across their desks. They have to settle that many claims -- known as “clearing” or “closing” a claim file -- each month just to stay actually. Their performance is also rated on how many claims they can personally settle without having to involve supervisors or insurance company lawyers. Once an adjuster knows that you understand the range of how much your claim is worth, the adjuster will not usually stall your claim.

During negotiations, you will find that you know much more about your state than the adjuster does. Except for those assigned to the largest cases, insurance claims adjusters have no special medical or legal training. And most have neither the time nor the sources to investigate or study your claim very carefully.

The result is that while an adjuster will know more than you about the claims business in general, he or she will not know your particular claim nearly as well as you do. You were there during the accident. You know what your accidental injuries are, how much and where they hurt, and how long they have taken to heal. You have put in the time to understand how the accident happened and to demonstrate through photos and medical records and other docs what your damages were. The insurance adjuster, on the other hand, has only a couple of minutes a week to look at your file. As long as you are structured and under­remain the process, you are the one with the negotiating advantage.

The adjuster has the authority to come to an agreement with you on the telephone for what the final settlement amount should be. Once you and the adjuster agree on an amount, the adjuster basically sends you the paperwork to finalize the settlement. But adjusters’ authority to settle claims on their own is restricted to particular dollar limits. The limits depend on how much experience the adjuster offers. For less experienced adjusters, the limit is between $5,000 and $10,000. For more experienced adjusters, the limit is between $10,000 and $20,000.

An adjuster will not disclose the limits of the adjuster’s authority is unless you’re going to get an offer higher than that authority. If so, the adjuster will have to ask for approval from a superior-usually called a claims or supervisor manager. This is neither unusual nor difficult. But if the adjuster does need to check with a supervisor about your settle­ment offer, get a date by which you will hear back from either one, and then send out a letter to the adjuster confirming that time.

For more details on negotiating an insurance claim, including sample letters to insurance companies, suggestions for handling negotiations, and strategies for dealing with an insurance company that refuses to make a good offer.