Adjuster – Definition

Cite this article as:"Adjuster – Definition," in The Business Professor, updated September 7, 2019, last accessed October 20, 2020,


Adjuster Definition

An adjuster is a claim agent who is responsible for investigating and evaluating an insurance claim to determine the extent of the insurance company’s liability. During the investigation process, the adjuster may interview the claimant and witnesses, inspect the damaged property or may review hospital records and police records to evaluate a claim.

A Little More on What is an Adjuster

There are broadly three types of adjusters who evaluate an insurance claim. An adjuster may represent an insurance company, they are known as Insurer adjusters. The adjusters who are hired by a claimant are known as public adjusters and there are independent adjusters who work on a freelance basis.

Insurer adjusters work on behalf of the insurance company and are directly employed by the company. They investigate the claims to establish whether the company is liable to pay for the claim and if yes, the extension of the liability. It is their responsibility to ensure that the company does not have to pay an undue amount, while at the same time they confirm that the claimant is not cheated.

Independent adjusters are also hired by the insurance companies and have the same responsibilities, but they are not an employee of an insurance company, they work on a freelance case to case basis. If a company has too many cases to handle or doesn’t have an adjuster at its disposal to handle their cases, the company may hire an independent adjuster. During the times of natural calamity, the demand for such adjusters increases.

A claimant may hire a public adjuster to ensure the highest possible settlement. Generally, when a claim is of a significant amount, the claimant tends to hire their adjuster. The public adjusters usually take a percentage of the claim amount as their commission. Thus, they try to secure the highest amount of settlement for the claimant as their income depends on that.

Property claims and liability claims are two of the most investigated claims. It is the responsibility of the claimant to convince the insurer adjuster about a settlement. Thus, they need to take photographs of damaged property and get all the paper works done with precision.

If a claimant receives a settlement amount which is significantly low, they must follow the appeal process before depositing the cheque. They may also consider hiring a public adjuster who will assess the claim and prepare a report. The claimant can submit this report during the appeal process to secure a higher amount. Hiring an efficient public adjuster is often crucial for getting a settlement amount which is deserved by the policy owner.

Reference for “Adjuster”

Academics research on “Adjuster”

Collusion in the US crop insurance program: applied data mining, Little, B. B., Johnston Jr, W. L., Lovell, A. C., Rejesus, R. M., & Steed, S. A. (2002, April). Collusion in the US crop insurance program: applied data mining. In Proceedings of the 2002 SIAM International Conference on Data Mining (pp. 583-597). Society for Industrial and Applied Mathematics. This paper quantitatively analyzes indicators of Agent (policy seller), Adjuster (indemnity claim adjuster), Producer (policy purchaser/holder) indemnity behavior suggestive of collusion in the United States Department of Agriculture (USDA) Risk Management Agency (RMA) national crop insurance program. According to guidance from the federal law and using six indicator variables of indemnity behavior, those entities equal to or exceeding 150% of the county mean (computed using a simple jackknife procedure) on all entity-relevant indicators were flagged as “anomalous.” Log linear analysis was used to test (1) hierarchical node-node arrangements and (2) a non-recursive model of node information sharing. Chi-square distributed deviance statistic identified the optimal log linear model. The results of the applied data mining technique used here suggest that the non-recursive triplet and agent-producer doublet collusion probabilistically accounts for the greatest proportion of waste, fraud, and abuse in the federal crop insurance program. Triplet and agent-producer doublets need detailed investigation for possible collusion. Hence, this data mining technique provided a high level of confidence when 24 million records were quantitatively analyzed for possible fraud, waste, or other abuse of the crop insurance program administered by the USDA RMA. This data mining technique can be applied where vast amounts of data are available to detect patterns of collusion or conspiracy as may be of interest to the criminal justice or intelligence agencies.

The Other Intermediaries: The Increasingly Anachronistic Immunity of Managing General Agents and Independent Claims Adjusters, Stempel, J. W. (2008). The Other Intermediaries: The Increasingly Anachronistic Immunity of Managing General Agents and Independent Claims Adjusters. Conn. Ins. LJ, 15, 599.

Constructing the insurance relationship: Sales stories, claims stories, and insurance contract damages, Baker, T. (1993). Constructing the insurance relationship: Sales stories, claims stories, and insurance contract damages. Tex. L. Rev., 72, 1395.

A private network of social control: Insurance investigation units, Ghezzi, S. G. (1983). A private network of social control: Insurance investigation units. Social Problems, 30(5), 521-531. Fraud investigation units have sprung up within insurance companies across the United States to counter corporate losses due to fraud and the restrictions imposed on the industry by government regulations. This paper looks at the birth, operating strategies, and effectiveness of these units in three automobile insurance companies in Massachusetts. Because fraud cases are rarely brought to court, these units operate as a kind of private police. They exchange information with the public police and other companies and circumvent judicial control, often using investigative procedures which would render the evidence they collect inadmissible in court. Recent legislation has strengthened their power and cut off avenues of redress once available to wronged policyholders.

Liability of Marine Surveyors, Adjusters, and Claims Handlers, Stuart III, C. L., & Caffrey, E. T. (1997). Liability of Marine Surveyors, Adjusters, and Claims Handlers. Tul. Mar. LJ, 22, 1.

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