What Insurance Adjusters Won’t Tell You: Unveiling the Secrets of the Claims Game

Let’s cut to the chase. What insurance adjusters often won’t explicitly tell you is that their primary responsibility isn’t necessarily to ensure you receive the maximum compensation you deserve. It’s to protect the insurance company’s bottom line while adhering to the legal requirements of the insurance policy. This inherent conflict of interest shapes their approach and can leave policyholders feeling shortchanged if they aren’t equipped with the right knowledge. Adjusters are skilled negotiators, thoroughly trained, and experienced in managing claims, and are acting in the best interests of their employer. This does not automatically mean that they are acting in your best interests. The information below can help ensure that you receive the settlement that you are due.

Understanding the Adjuster’s Perspective

Insurance adjusting is a complex field. Adjusters must balance empathy for claimants with the financial realities of their employer. While ethical adjusters strive for fair settlements, the system itself can create situations where information asymmetry is weaponized. This means the insurance company possesses far more information about the claim’s value, applicable laws, and negotiating strategies than the average policyholder.

Many insurance policies are intentionally verbose, and written with legal language. This can make the policy difficult to understand, and allows insurance companies to deny, reduce or delay claims based on small details.

Adjusters are trained to find the lowest possible settlement that still complies with the terms of the policy and applicable laws. They will utilize their extensive training to leverage their position and save the insurance company money.

Key Insights Insurance Adjusters Often Omit

Here’s a deeper dive into specific things adjusters might not readily disclose, but are crucial for you to understand:

• The True Value of Your Claim: Adjusters may initially offer a settlement amount that is significantly lower than the actual value of your claim. They might downplay the extent of damages, overlook certain covered expenses, or use depreciation calculations that unfairly reduce the payout. You need to independently assess the full cost of your damages and be prepared to support your valuation with documentation.
• The Full Scope of Your Policy Coverage: Insurance policies can be dense and filled with legal jargon. Adjusters might not proactively explain all the coverages available to you, especially those that could significantly increase your settlement. It’s your responsibility to thoroughly review your policy and ask specific questions about potential benefits.
• Your Right to Negotiate: Many policyholders assume the adjuster’s initial offer is final. This is almost never the case. You have the right to negotiate the settlement amount, and you should do so if you believe the offer is insufficient.
• The Availability of an Independent Medical Examination (IME): In personal injury claims, the insurance company may request an IME performed by a doctor of their choosing. While they present this as an objective assessment, the doctor is often biased in favor of the insurance company. The results of the IME can be used to reduce or deny your claim. You should be aware of your rights regarding IMEs and consider seeking a second opinion from your own doctor.
• Statutes of Limitations: Every state has statutes of limitations that set deadlines for filing lawsuits related to insurance claims. Adjusters may not explicitly remind you of these deadlines, and missing them could permanently bar you from pursuing legal action. Be vigilant about tracking these deadlines and seeking legal advice if necessary.
• Bad Faith Insurance Practices: While hopefully uncommon, some insurance companies engage in “bad faith” practices, such as unreasonably delaying claims, denying valid claims without proper justification, or misrepresenting policy terms. If you suspect bad faith, document everything and consider consulting with an attorney specializing in insurance law.
• Alternative Dispute Resolution (ADR): Many policies include provisions for ADR, such as mediation or arbitration, to resolve disputes outside of court. Adjusters may not always emphasize these options, as they might prefer to control the negotiation process. Explore ADR if you and the adjuster reach an impasse.
• The Adjuster’s Authority Limits: Adjusters have varying levels of authority to approve settlement amounts. They may need to seek approval from a supervisor for larger claims or to deviate from standard settlement practices. Understanding these limits can help you gauge the adjuster’s flexibility during negotiations.
• The Complexity of Business Interruption Claims: For businesses affected by covered events, business interruption insurance can provide crucial financial support. However, these claims can be incredibly complex, involving intricate calculations of lost profits and ongoing expenses. Adjusters might attempt to simplify the process, potentially undervaluing the true extent of the business’s losses. Seek expert financial advice to accurately assess your business interruption claim.
• The Impact of Prior Claims: Previous claims, even seemingly minor ones, can affect your current claim and future insurance rates. Adjusters might not fully explain how past claims are factored into the assessment of your current situation. Be prepared to discuss your claims history and understand its potential implications.
• The Possibility of a Public Adjuster: A Public Adjuster is an expert that you can hire to work on your behalf and negotiate with the insurance company. They are experts in the insurance claims process, and know how to properly value and negotiate your claim. Insurance adjusters will never suggest that you hire a Public Adjuster, as that will mean the insurance company will need to pay a higher settlement.
• Their Performance Metrics: Insurance adjusters are typically graded on their ability to close claims quickly and for as little money as possible. This information is proprietary and will never be shared. However, understanding this fact can help you see an insurance adjuster’s perspective when dealing with them.

Frequently Asked Questions (FAQs)

Here are some common questions people have about dealing with insurance adjusters:

1. Should I record my conversations with the insurance adjuster?

Depending on your state’s laws, recording conversations may be permissible. In “one-party consent” states, you can record a conversation as long as you are a party to it. In “two-party consent” states, you generally need the consent of all parties involved. Even if legal, recording might make the adjuster less cooperative. Consider taking detailed notes instead.

2. What if I disagree with the adjuster’s estimate of damages?

Obtain your own independent estimates from qualified contractors or appraisers. Present these estimates to the adjuster with supporting documentation, and be prepared to explain why you believe your estimates are more accurate.

3. How long does the insurance company have to settle my claim?

State laws typically set deadlines for insurance companies to acknowledge claims, investigate them, and make a settlement offer. These timelines vary by state and type of claim. Know the deadlines in your state and hold the insurance company accountable.

4. What does “full and final settlement” mean?

Signing a “full and final settlement” agreement means you are releasing the insurance company from any further liability related to the claim. Ensure you are completely satisfied with the settlement amount before signing, as you generally cannot reopen the claim later.

5. Can I sue the insurance company if they deny my claim?

Yes, you generally have the right to sue the insurance company if you believe they wrongfully denied your claim or acted in bad faith. However, it’s crucial to consult with an attorney to assess the strength of your case and understand the legal process.

6. What is the difference between depreciation and actual cash value?

Depreciation is the reduction in value of an item due to age, wear and tear, and obsolescence. Actual cash value (ACV) is the replacement cost of an item minus depreciation. Insurance policies may offer ACV coverage or replacement cost value (RCV) coverage, which covers the full cost of replacing the item without deducting depreciation.

7. Do I have to accept the adjuster’s initial offer?

No, you are not obligated to accept the adjuster’s initial offer. It is often a starting point for negotiations, and you have the right to counteroffer with a higher amount if you believe it is justified.

8. What is a “reservation of rights” letter?

An insurance company may send a “reservation of rights” letter when investigating a claim if there is a question about coverage. This letter informs you that the company is investigating the claim but reserves the right to deny coverage later if it determines that the policy does not apply.

9. How can I document my damages effectively?

Take photographs and videos of the damage. Keep receipts for all expenses related to the claim, such as temporary housing or repairs. Maintain a detailed record of all communications with the insurance adjuster.

10. Should I hire an attorney for my insurance claim?

Hiring an attorney can be beneficial, especially for complex claims, claims involving significant damages, or claims where the insurance company is acting in bad faith. An attorney can protect your rights and negotiate on your behalf.

11. What are my options if I am unhappy with the adjuster assigned to my claim?

You can request to have a different adjuster assigned to your claim. Explain your reasons for the request and be prepared to provide specific examples of why you are dissatisfied with the current adjuster.

12. What role does the Better Business Bureau (BBB) play in insurance disputes?

The BBB is a private organization that collects and provides information about businesses, including complaint resolution. While the BBB can mediate disputes, it does not have the legal authority to force an insurance company to take any particular action. However, filing a complaint with the BBB can sometimes prompt the insurance company to address your concerns.

Empowering Yourself as a Policyholder

The key takeaway is this: be proactive and informed. Understand your insurance policy, document everything meticulously, and don’t be afraid to ask questions and challenge the adjuster’s assessment if you believe it’s unfair. By arming yourself with knowledge, you can level the playing field and ensure you receive the fair settlement you deserve. Remember, while the adjuster is working for the insurance company, you are your own best advocate.