Legal Definitions - independent adjuster

An independent adjuster is a professional who investigates and assesses insurance claims on behalf of various insurance companies. Unlike staff adjusters who are direct employees of a single insurer, independent adjusters operate as contractors, offering their services to multiple insurers as needed. They determine the cause of loss, estimate damages, and recommend settlement amounts, providing an objective assessment for the hiring insurance company.

Here are some examples:

• Imagine a massive hailstorm sweeps through a metropolitan area, causing extensive damage to thousands of homes and vehicles. Many insurance companies are suddenly inundated with a huge volume of claims, far more than their regular staff adjusters can handle. To process these claims efficiently and promptly, these insurers will often hire several independent adjusters from different firms. These adjusters are brought in specifically to help manage the surge in workload, working on a contract basis for whichever insurance company needs their assistance.

  This illustrates an independent adjuster's role as an external resource, brought in by multiple insurers to handle high-volume events without being a permanent employee of any one company.

• Consider a small regional insurance company that receives a claim for significant damage to a commercial fishing vessel. Their in-house adjusters typically handle auto and home claims and lack the specialized expertise required to accurately assess marine damage, salvage operations, and repair costs for such a unique asset. The insurance company would then engage an independent adjuster who specializes in maritime claims. This expert adjuster, not employed directly by the company, provides the necessary specialized knowledge to properly evaluate the complex claim.

  This example highlights how independent adjusters provide specialized expertise that an insurer's regular staff might not possess, working as a contracted specialist.

• Suppose a high-ranking executive at a large insurance corporation is involved in a serious car accident, and the claim falls under a policy issued by their own company. To avoid any potential conflict of interest or the appearance of impropriety, the insurance company might choose to hire an independent adjuster to handle the claim. This external adjuster would conduct the investigation, assess damages, and recommend a settlement amount, ensuring an unbiased and objective process free from internal influence.

  This demonstrates the use of an independent adjuster to maintain impartiality and objectivity, especially in situations where an internal conflict of interest might arise.