Insurance adjusters battle low pay, long hours, declining authority, trade groups say

Adjusters are often the first representative of the insurance company on the scene to assess a home destroyed by fire or storm damage, or a vehicle totaled in an accident.

Traditionally, insurance adjusters filled a key and respected role arbitrating fairness between often-distraught victims and their insurer.

Those days seem to be in the past, industry leaders say. Compensation, working conditions, dwindling responsibility and increased regulations are all thorny issues for insurance adjusters.

"There's a lot of disgruntled adjusters for various reasons," said Caeden Tinklenberg, CEO of Swift Public Adjusters. "A lot of adjusters haven't made out really well for a long time as far as what they are getting paid. And the freedom and authority that they enjoyed to settle claims as they saw fit, a lot of that has gone away."

There are an estimated 285,270 claims adjusters, examiners and investigators in the United States, according to the most recent data from the Bureau of Labor Statistics. The mean annual compensation is $73,380.

Working conditions cited

In an internal email this spring, a group of Nationwide adjusters aired complaints that “expectations have become overwhelming and impractical” and made six demands for change.

An emergency meeting held later in the day did little to placate employees, and sources say little has changed.

"Over the past six months, we have noticed a significant increase in our workload accompanied by unrealistic deadlines and objectives," the email read. "While we understand the importance of meeting targets and providing quality service to policyholders, the current expectations have become overwhelming and impractical. This has led to a detrimental impact on our well being resulting in heightened stress levels, burnout, and a decline in job satisfaction."

The message claimed Nationwide is understaffed and asking its claims adjusters to take on too many hours. It asked for the company to undertake a workload study to determine what is the appropriate output for a claims adjuster.

A Nationwide spokesman acknowledged the email message but did not provide a comment.

Chris Aldrich is president of the National Association of Public Insurance Adjusters. While not speaking specifically on the Nationwide complaints, he said compensation is an issue in the industry. One independent adjusting firm recently offered to pay adjusters $75 per report, he said.

Aldrich estimated that a legitimately done site inspection and report will take at least four hours, usually more.

"You can make that kind of money flipping burgers at McDonald's and not be subject to having to deal with people who have lost everything in their lives," he said.

Reports allegedly disregarded

In Florida, independent field adjusters are providing evidence to state regulators of alleged fraud, affecting thousands of homeowners in south and central Florida.

The controversy erupted in December, after three adjusters spoke during a special session on property insurance. Hurricane Ian, the costliest storm in Florida history at $109 billion, provided the backdrop.

“The insurance companies were directing the file reviewers to change my estimates to repair the roofs, rather than to replace a totaled roof," said Ben Mandel, one of the adjusters. "However, the insurance company was leaving my name on the estimates in a fraudulent effort to make it appear that I had written this bogus estimate, which defrauded the policyholders out of their proper claim payments.”

Gov. Ron DeSantis later said two state investigations were initiated into the adjusters' claims. In the meantime, several property owners filed lawsuits against insurers over alleged underpayment of claims.

"It's sad to see what's going on and, on the insurance carrier side, it's getting worse and worse with the hoops that you have to jump through to be able to file a claim and get paid accurately," said Aldrich, president of Andrew K. Knox and Co., a certified public adjuster firm in Toms River, N.J.

States suspend the rules

When Insurance Commissioner Glen Mulready signed an executive order last week, Oklahoma became the latest state to suspend the qualifications in order to fill a short-term need for insurance adjusters.

The Oklahoma order temporarily waives local licensing requirements for independent adjusters to be able to service clients and allows local insurance agents to ask out-of-state adjusters for help as they prepare multiple damage claims from recent storms.

"The unfortunate caveat to that is that it's likely that a lot of the people coming in without the licenses will not have the experience nor authority or training to adequately adjust these claims," Tinklenberg said, "and will probably cause more harm than good by these claims being improperly adjusted."

Swift Public Adjusters provides public adjusting, appraisal and umpiring services to first-party insurance claimants. The company is licensed in Iowa, Minnesota, South Dakota, Nebraska, and Colorado.

Tinklenberg is a member of the American Adjuster Association. The public adjuster trade associations keep busy lobbying several issues related to licensing and other issues. NAPIA has about 750 members, Aldrich said, and it heavily focused on fighting anti-public adjuster endorsements.

Certain insurers in specific states add language in property insurance policies that prohibit the policyholder from using the services of a public insurance adjuster. The practice reached a point by January 2022 that Louisiana Insurance Commissioner Jim Donelon issued a directive barring insurers from using that language in policies.

It's an ongoing fight to allow public adjusters to do the job as intended, Aldrich said.

"Sixteen years ago when I got started doing this, we had adjusters who had ... I guess you could call it authority," he recalled. "They had authority to make decisions. They had authority to settle claims. Today, adjusters are not adjusters. They're middlemen.

"Very honestly, there's not many adjusters who have any kind of authority."

Senior Editor John Hilton covered business and other beats in more than 20 years of daily journalism. John may be reached at [email protected]. Follow him on Twitter @INNJohnH.

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InsuranceNewsNet Senior Editor John Hilton has covered business and other beats in more than 20 years of daily journalism. John may be reached at [email protected]. Follow him on Twitter @INNJohnH.