INSURANCE CLAIM TERMINOLOGY
People new to the insurance claim realm often struggle with the terminology. The word adjuster is used within three terms, and while the terms are similar the distinctions are important. Following is a summary of important terms property owners should know during the claims process.
Notice the difference in these claim terms:
Staff adjuster. A staff adjuster is any person on the staff of an insurance company that evaluates a claim.
Claim adjuster. This term is essentially the same as a staff adjuster.
Independent adjuster. An individual serving in the role of an independent adjuster is an independent contractor who contracts with an insurance company to adjust the claim. You can think of these individuals as outside, third-party contractors not regularly on the payroll of an insurance company. Independent adjusters often adjust claims after large hail or wind storms when an insurer is managing a large volume of claims. Smaller insurers without a large staff can also rely on independent adjusters.
Public adjuster. A public adjuster serves as the property owner’s adjuster. Just as insurance company hire people to adjust a claim, property owners can also hire their person, and that person is referred to as a public adjuster.
I urge every property owner that interacts with an independent adjuster to be really thoughtful about what this term means. This term does not mean the adjuster is a neutral person whose only interest is to “independently” value a claim no matter whether an insurer or insured likes the outcome. This person is not like a judge in that sense. Insurance companies can overrule the decisions of an independent adjuster. It is important to understand that this person makes a living from work from an insurance company.
Another title people often confuse with an adjuster is an appraiser. An appraiser in the context of a real property (real estate) insurance claim is not someone hired to value property for its eventual sale. An appraiser is someone appointed by either a property owner, or insurance company, to serve on an appraisal panel. An appraisal panel is formed when the property owner and insurance company are unable to agree on the cause and scope of loss. An appraisal panel of three people resolve such a dispute with finality. For more information on the appraisal process visit here.
Finally, people involved in the insurance claim realm will use the term “contractor” to refer to the builder or construction company performing the work. In other areas the term “contractor” means any independent contractor performing work, but in the insurance claim realm it means the builder.
If you have any questions about the terminology used in the insurance claim realm feel free to contact me.