What is an Insurance Adjuster: All You Need to Know

If you're purchasing auto or home insurance for the first time, then you're aware of how tricky it can be to familiarize yourself with the necessary terms.

There's various insurance jargon that many Canadians are familiar with, some of which include:

• Rate
• Premium
• Deductible
• Insurance agent
• At fault

However, one term that many Canadians aren't as familiar with is "insurance adjuster". If you're currently asking yourself, "what is an insurance adjuster?" or "what does an insurance adjuster do?", you can find the answers to these questions, and more, in the following paragraphs.

What is a claims adjuster?

So, what is adjuster by definition?

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For starters, an insurance adjuster (also occasionally referred to as a claims adjuster or insurance adjustor) plays an extremely crucial role in the claim-making process.

As you likely know, when your insured property (car, home, etc.) gets damaged by an event that you can't control (often called risks and perils), you have to submit a claim to your insurance company. If you don't submit a claim, then you won't be able to receive compensation for the damage your property has sustained.

Once you've made a claim, your insurance provider is responsible for determining how much money you are owed.

Determining the correct value of a claim is imperative for insurance providers. Paying out too much will gradually cause the company to lose money, which, if not addressed quickly, can put a company out of business.

On the other hand, if the provider doesn't sufficiently compensate their customers, it can hinder their reputation. Neither of these potential outcomes are ideal in the long run.

This is why insurance providers rely on insurance adjusters. Insurance adjusters are responsible for investigating and determining the value of claims.

In short, insurance adjusters ensure that providers don't over or under-compensate their customers.

How do insurance adjusters help providers determine the value of a claim?

As mentioned above, insurance adjusters help providers determine the value of a claim. But how exactly do they do this?

Insurance adjusters do a lot of the investigative groundwork for insurance companies. This includes being the main point of contact for customers and gathering important information related to claims.

Once enough information has been gathered, the insurance adjuster writes a report for the provider that states what they've found.

Day in the life of an insurance adjuster

Here's a brief look at the average day for a fictional insurance adjuster in Canada:

Bob is an insurance adjuster in Toronto, ON. One morning, Bob receives a call from a customer stating that their house was damaged by fire while they were out of town for a business trip.

Bob then asks the customer a handful of questions related to the incident. Some examples of the information that Bob needs to obtain include:

• The estimated value of the damaged property
• The date of the incident
• Personal information (name, address, etc.)
• Whether a police report was filed or not

Once Bob has gathered enough information over the phone, he needs to visit the remains of the property. Doing this gives Bob a chance to get a personal look at the scene and gather more critical evidence.

During his visit, Bob needs to complete the following tasks:

Conduct interviews with the homeowner and potential witnesses

Conducting interviews is one of the primary ways that adjusters obtain information about incidents. During the interview, try to provide the adjuster with as much pertinent information as possible. Doing this makes their job substantially quicker and easier.

Take photos of the damaged goods

Adjusters need to take pictures of damaged property if they want to reference or reexamine the damage in the future. An insurance adjuster may also include these photos in their report.

Review the police report (if applicable)

Insurance adjusters can often find helpful information that customers may have forgotten or accidentally left out during the interview process by looking at the police report.

Consult with industry professionals

In some cases, insurance adjusters will reach out to industry-specific professionals for help.

Doing this gives them access to professional insights and opinions that they may not have considered. In the case of a house fire, an adjuster may want to reach out to an arson investigator or professional electrician.

Let's return to our friend Bob. Bob gathers this information in hopes of figuring out how the damage occurred. In this example, Bob finds out that the fire was started when lightning struck an adjacent wooded area, eventually spreading to the customer’s home.

Now that Bob has determined the cause of the incident and the value of the damage, he reports the information he obtained. The report states the value of the cause and the claim's value (minus the deductible).

Who do insurance adjusters work for?

Generally, adjusters work directly for an insurance provider or as freelancers. The primary difference between the two is that in-house adjusters usually focus on high-population areas, whereas their freelance counterparts tend to remote locales.

However, there's no need to worry about whether your adjuster is an in-house employee or freelancer. In Canada, each province has its own insurance adjustment regulator; these regulators are responsible for ensuring the quality and standards of Canadian adjusters. This means that Canadians have access to high-quality service, regardless of their location.

Is there a difference between auto and home insurance adjusters in Canada?

There are very few differences between auto and home insurance adjusters in Canada. Here's a brief description of the two roles:

What is an adjuster in auto insurance?

Auto insurance adjusters work solely on car-related claims, such as damage caused by a collision.

What is an adjuster in home insurance?

On the other hand, a home insurance adjuster focuses primarily on home-related claims, like fire and flood damage.

There are also several other types of adjusters that specialize in various facets of insurance, such as:

• Business
• Tenant
• Cottage

Insurance adjusters are here to help

After reading this article, you should have a solid understanding of what an insurance adjuster is and the role they play in the claim-making process.

And remember — insurance adjusters are here to help both you and your insurance company. Because of this, you should always cooperate with them and try to give them as much information as you can. Doing this will drastically speed up the claim-making process.