Loss adjustor

Loss adjustor
See also
Windstorm Insurance Insurance cover note Accident policy Letter of advice Retroactive date Duties of employers Floater policy Bonding company Indemnity bond

Loss adjuster is a qualified person who deals with settlement of the insurance claim that arises from the insurance policy and decides on the sum that is paid to a person or group in whose name an insurance policy is held so as the claim is regulated. Loss adjusters settle insurance claims in case of damage of owned goods (e.g. natural disaster or property destruction) and other claims e.g. in case of bodily injury (K. Soultati, I. Sartzetaki 2013, p. 48).

Characteristics of loss adjusters

T. Boobier says that: Loss adjusters are impartial claims specialists paid by insurers (T. Boobier 2005, p. 306). Loss adjusters are very often appointed to assess the condition of real estate after various disasters, including floods (R. Soetanto, D. Proverbs 2004, p. 7). Before the claim is assigned to a specified loss adjuster a short-term insurer has to receive all the essential information about the claim. There are two options: loss adjuster may work for the short-term insurer or operate on his own, but in this case, he is nominated by the short-term insurer. Working on the claim's information contains both on detail of the event and the people involved. Summary and ratification of the data is the most important thing in the claim. It helps to track any fraudulent claims relying on the previous claims of a person or organization covered by insurance. To assess the claim, the loss adjuster has to make sure whether the insured does not fall behind with any premiums and if all the documents are valid. Then the claim adjuster should assess the cause of the loss or damage and the amount of money the insured should receive (Jaarsveld J., Mostert F J., Mostert J H. 2015, p.136).

History of loss adjusters

The history loss adjusters began in 1666 in London during the Great Fire of London. Shortly after these events, fire insurance became a common thing and loss adjusters advised independent surveyors and builders in dealing with claims. The word loss adjuster first appeared in 1941, when the Association of the Fire Loss Adjusters was founded. It was a group of experts involved at the time of a national suffering due to a huge fire caused by the bombing (T. Boobier 2005, p. 306).

Role of loss adjusters

For insurance companies to work flawlessly, loss adjusters should work fairly on insurance claims. Their duties may be different depending on a directive they are given and they can be as follows:

• meeting with the sites involved in the case and making a research about the claim
• conversation with clients in order to gather evidence for reasons of the situation
• collecting helpful materials such as security cameras recordings
• contacting a person who is highly skilled in a specific field if a precise report is needed
• filling out obligatory paperwork
• estimating the size of the physical harm
• making sure that the injured party is entitled to compensation, that the amount is appropriate and whether the amount of money requested is acceptable
• negotiating payments
• making sure that insured person did not omit any important factors of the claim, giving advice on how the damage can be repaired, dealing with cleaning or rescue
• examination or research if any fraud in claims is suspected
• preparation of a report comprising arrangements and suggestions for the insurer
• advising the applicant on how to protect himself so that he avoids accidents or losses in the future (K. Soultati, I. Sartzetaki 2013, p. 49)

Examples of Loss adjustor

• Public adjuster: A public adjuster is a professional who is hired by the policyholder of an insurance policy to represent them in the settlement of their insurance claim. They are usually hired to assess the damage and negotiate the settlement amount with the insurance company.
• Claims adjuster: A claims adjuster is an individual employed by an insurance company to investigate and assess claims made against the company. The adjuster’s role is to review the claim, investigate the circumstances surrounding the damage, evaluate the extent of the damage and determine the amount to be paid out by the insurance company.
• Independent adjuster: An independent adjuster is an individual who works on behalf of an insurance company to investigate and evaluate claims. They are not employed by the insurance company, but instead work on a contractual basis.
• Loss assessor: A loss assessor is a professional who is hired by the insured party to help them in the process of making an insurance claim. They are responsible for assessing the damage, negotiating the settlement amount and ensuring that the insurance company pays the claim in full.

Advantages of Loss adjustor

One of the main advantages of having a Loss adjustor is that they provide an impartial and independent assessment of insurance claims.

• Loss adjusters have extensive knowledge of the insurance policy terms, meaning they can ensure that the settlement provided is fair and accurate.
• Loss adjusters are able to provide support and advice to policyholders throughout the claims process, helping to reduce the stress of the situation.
• Loss adjusters are able to provide a full review of the claim and all associated documents to ensure that the settlement is appropriate and that all relevant facts are considered.
• Loss adjusters can also assist policyholders in negotiating a settlement with the insurer to ensure the best possible outcome for the claimant.
• Loss adjusters can also provide assistance in arranging temporary repairs to the damaged property, ensuring that any financial losses are minimised.

Limitations of Loss adjustor

The limitations of a loss adjustor include:

• They can only assess the damage or loss to the extent of what is covered by the insurance policy. They cannot make any decisions beyond the scope of the policy.
• Loss adjustors cannot alter the terms of the insurance policy as they are bound to the limits of the policy.
• Loss adjustors must work within the laws and regulations of the jurisdiction in which the claim is being settled.
• Loss adjustors must be impartial and objective when assessing a claim, meaning they cannot take sides in disputes or make judgements based on personal opinion.
• Loss adjustors are not authorized to negotiate with the claimant on behalf of the insurer.
• Loss adjustors cannot advise claimants about the legal implications of their claim.

Other approaches related to Loss adjustor

A Loss adjustor also performs many other tasks related to the insurance claim. These include:

• Investigating the claim and gathering evidence, such as witness reports, photographs, and police reports.
• Assessing the damage, verifying the amount and extent of the loss, and consulting with experts to determine the cause of the claim.
• Negotiating with the insured and the insurer to reach an agreement on the settlement amount.
• Preparing reports, including detailed calculations of the loss, and submitting them to the insurer for approval.
• Assisting the insured in filing claims and providing advice on the legal implications of the claim.

In summary, a Loss adjustor is responsible for assessing the validity of an insurance claim, gathering evidence, negotiating the settlement amount and preparing reports for the insurer.

References

• Boobier T. (2005), The war on subsidence — Solutions for an event year and the role of the loss adjuster Journal of Building Appraisal Volume 1, Issue 4
• Jaarsveld J., Mostert F J., Mostert, J H. (2015), The claims handling process of liability insurance in South Africa, Risk governance & control: Financial markets & institutions, 5(1-1)
• Soetanto R., Proverbs D. (2004), Impact of flood characteristics on damage caused to UK domestic properties: the perceptions of building surveyors, Structural Survey Vol. 22, No. 2
• Soultati K., and Sartzetaki I. (2013), Loss adjusters: should divergence across EU member states be dealt with?, European Insurance Law Review, no. 4

Author: Weronika Piotrowska