What do Insurance Adjustors Do?

Moshe Amos

Experiencing damage to your home is disconcerting and, depending on the extent of the devastation, can be downright frightening and traumatic. Whether the destruction comes in the form of fire, water damage, smoke, or mold, the effect is troublesome in the extreme, as your house is your most important investment. After the initial shock of the catastrophe has worn off, you realize that you had better call your home insurance agent because now is the time that all those monthly premiums pay off.

At this point, you may also begin to feel a little uneasy. You may wonder if your coverage is sufficient to take care of the damage and you might even wonder if you are going to get a fair shake from your insurance company. There will be a claims adjuster coming to your home to assess the property loss, and you could wonder if this person will make sure that your compensation is adequate.

Below, we are going to look at the claims adjusters’ responsibilities, and what actions that you can take to make sure that you maximize the benefits of your policy.

What is the Function of a Home Insurance Claims Adjuster?

Insurance claims adjusters have several job responsibilities, and most of them have to do with determining how much money is paid out on the claim the policyholder has filed. They will examine the damage to your home, consult with trade professionals, and submit a recommendation to the corporate office specifying a figure for settlement of the claim. However, that is not all that they will be doing. Remember, the claims adjuster does not work for you, the insurance company that holds your policy is their employer.

Technically, the claims adjuster is investigating for the insurance company, and this investigation has different components. You might be surprised to learn that part of what the adjuster is doing is gathering evidence to support the settlement if a court battle ensues. The adjuster may also function as a negotiator if you do not accept the settlement, to try and find common ground and avoid a court case.

The adjuster will also interview any witnesses, police and fire personnel, and hospital staff if there was an injury. He or she examines the title of the property to ensure that the claimant has clear title to the home. Critically, the adjuster determines liability – in other words, are you in any way liable for the damage to the house.

Another function of the claims adjuster is to evaluate your coverage to ascertain limitations to restoration from a financial perspective. In other words, if your policy covers $25,000 of damage, but the cost to repair the damage is $30,000, there is a $5,000 shortfall. Also, your policy may pay for temporary housing or it may not. The job of the claims adjuster is to determine what your policy covers and what you will have to pay out of pocket.

The insurance company that holds your policy is a giant corporation, and they want to settle your claim fairly, but for the least amount of money possible. The adjuster may seem like your best friend and savior at first, but there is a possibility that things may become adversarial and your job is to involve yourself in every step of the claims process, documenting everything, and advocating your position.

How Does a Claims Adjuster Arrive at a Settlement Amount?

Most states require that insurance claims adjusters be licensed, so they have to complete a course, get a certificate, submit it to the state department of insurance, and then must pass an exam for licensing. Also, claims adjusters receive additional training from their companies that is ongoing.

This licensing means that the adjuster is qualified to inspect property damage and estimate replacement costs. He or she will come into your home and complete a thorough examination of all the loss and take a lot of pictures. After the adjuster finishes the analysis, they will go back to their office to work on the claim.

Increasingly, many insurance companies use a type of software to process claims called Xactimate. This software, used by claims adjusters, calculates damage, rebuilding, and repair costs. Xactimate also produces loss estimates and settlement proposals. Because the software operates on a cookie-cutter premise, it often comes up with low settlement offers for homes, such as historical or custom-built homes.

Contractors do not use Xactimate, so there can be disparities between their estimates and the adjuster’s estimate. Make sure to stick with your contractor, and if the adjuster will not budge, then it’s a different ball game that we will discuss later in the article.

What is the Right Way to Deal with a Home Insurance Claims Adjuster?

Documentation throughout the claims process is crucial, and one of the best ways to keep everything on the record is to communicate by email. Emails are irrefutable evidence you can use for backup in a disagreement. Avoid phone conversations, because you cannot document them. The insurance company, however, will record conversations so that they can use them against you if necessary. Do not ever allow yourself to go on the record in any way, and do not sign anything until you are satisfied with the settlement.

Choose the Contractor Yourself.

Home insurance claims adjusters are more than happy to provide you with contractors that they regularly work with to repair the damage to your home. The foolishness of agreeing to these terms should be apparent, but some folks fall for it, so make sure that you are not one of them. Find a reputable contractor if you do not already have one in mind, preferably one that has some experience dealing with aggressive claims adjusters. Feel free to get several estimates if you would like.

Contractors that work with insurance companies are sometimes entities that have a hard time finding business any other way. These contractors are beholden to the insurance company and understand that part of their job is to keep costs low. They may use unskilled labor or inferior materials, so keep them out of your house.

Negotiation with a Claims Adjuster.

Sometimes, the settlement a claims adjuster offers is far apart from the amount of money that you or your contractor believe is necessary to restore your home correctly. Also, there is the issue of items lost within the house, such as furniture, clothing, appliances and other sundry items. You and your adjuster may not agree on the value of these material goods.

Under these circumstances, the first step is to try negotiation with the adjuster, because this avoids a lengthy court battle that costs money for both sides and delays work on the home. The negotiation process is where all the documentation that you have compiled becomes necessary. The adjuster requires proof that the settlement amount they offer is inadequate. Make sure that your contractor details specific costs of materials and labor to support their estimate because the adjuster will capitalize on any ambiguities.

The insurance company may ask you to obtain multiple estimates from different contractors and, if this is the case, comply with their request. Additional estimates that support your case serve to weaken theirs. Remember that the adjuster probably offered a lower settlement than the insurance company will pay in expectation of the negotiation process.

In summation, hopefully, you never have to engage the services of a claims adjuster, and if you do, your experience will probably be satisfactory. However, it pays to assume that there may be difficulties, so preparation and diligence are a must. Documentation and tenacity are essential to an acceptable settlement of your claim.


Moshe Amos

Moshe has more over 15 years as a licensed contractor in the New York City area. 

As a New York State-licensed Mold Assessor, he is especially knowledgeable about mold assessment and remediation.


Fire & Water Damage ‧ Mold Remediation ‧ Asbestos & Lead ‧ All Abatement ‧ Total Renovation