Is Claims Adjusting for Me?

AdjusterPro

By Adam GardinerCo-Founder, AdjusterPro

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A guide to determining if a career as a claims adjuster is a good fit for you.Over the last 10 years I’ve been fortunate to work with thousands of new

and aspiring adjusters to help them get ready for a successful career in

the claims business. In that time, I’ve learned a lot about who makes a

good adjuster and who doesn’t...and why.

I love this industry and I love helping new folks discover it. What follows

is meant to serve as a guide for you if you’re interested in becoming an

adjuster but don’t yet understand how the industry works and what the

opportunity truly is. I hope you’ll find it helpful and I’d be glad to hear

from you. Onward!

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Stumbling Into Adjusting myStory

I became a believer when I

got my first pay-check for over

$14,700.

I stumbled accidentally into claims adjusting in 2004, when I took a job as a salesman in Kentucky for my brother-in-law’s roofing company following a major hailstorm. As part of my job, I’d meet claims adjusters on damaged roofs. They had been deployed to determine if the insurance company would pay to replace the hail-damaged roof.

I was seriously intrigued by their job. Unlike my commission-based pay, they got a direct deposit every two weeks. They

made way more than me, and the job actually looked fun.

So I got myself an adjuster license and with new license in hand, I was deployed to Hurricane Charley in 2004. It was total chaos. I put my nose to the grindstone and worked harder than I had ever worked before. I became a believer when I got my first full two-week paycheck for over $14,700. That clinched it. I loved the job and I was making huge money. I had found my niche.

Since that time, I’ve adjusted commercial claims, residential claims, CAT claims, daily claims and liability claims. I’ve done file review, quality control, dispute resolution, appraisal and mediation. I’ve managed adjusters and I’ve run my own claims company. I currently co-own the largest and most respected training company in the industry. I’ve trained literally thousands of folks to get into adjusting, so I’ve learned a ton about this little-known niche industry and how to get into it. Perhaps more importantly, I’ve learned quite a bit about what kind of people do well in adjusting, who does not, and why.

To help you make an informed decision, I’ll answer the following questions in this book:

1. Is adjusting a legitimate opportunity?2. What is adjusting like?3. How much does it pay?4. What are the qualifications to get into adjusting?5. Are there different career paths?6. If it does fit me, how do I get started?

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Is Adjusting a Legit Opportunity?

Adjusting is a whole

different animal...

its actually enjoyable.

In order to size up adjusting, first consider the insurance industry itself. In the United States, our very way of life is underpinned by insurance. Take for example, that people buy houses by borrowing money from a bank. Banks offset the risk of lending money by requiring the homeowner to purchase a policy that protects their investment. Anyone who has let their homeowners policy lapse knows that their mortgage company will immediately rectify the situation, and the remedy is not pleasant. The same principle applies to almost all property ownership: autos, businesses, boats, planes, etc., and the same is true for liability insurance and workers’ comp.

This is all part of risk management. Whenever and wherever there is “exposure” (the chance of loss), risk is transferred to the insurance company in exchange for premiums.

The bottom line is that insurance is here to stay, and it’s big business. This is good news for folks interested in claims, because as long as there is insurance, there will be claims.

Adjusters are the folks who investigate the loss when a claim is filed. If a tree falls on your house during a winter storm, you would call your insurance company and they would send out an adjuster to determine if the loss is covered by the policy and if so how much needs to be paid and to whom. Similarly, if you get into a car accident, it will be an adjuster who comes to investigate the damage, including injuries to people and damage to property.

Not to insult other insurance related jobs, but they all seem boring or distasteful to me. Adjusting is a whole different animal; it’s actually enjoyable. There’s a flexible mix of office and field work, there’s endless room for growth, and you constantly deal with people. The icing on the cake for me, though, is how much money adjusters can make.

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What Is IndependentAdjusting?

Managing the ebb and

flow of claims volume has

created a multi-billion dollar

industry called independent

claims adjusting.

Insurance companies profit by collecting more in premiums than they are paying out in claims. They know that there will be spikes and dips in claim volume, and set policy premiums accordingly. For example, a large insurance company might expect 30,000 claims to be filed in Galveston, Texas during a normal year, but they realize that number could spike to 130,000 if a hurricane hits. Claims fluctuate throughout a normal year, too; ice storms may spike claims during the winter in New Hampshire, while heat waves may spike claims in Arizona during the summer.

This fluctuation in the number of claims presents a staffing dilemma for insurance companies.

1. If they keep enough adjusters on the payroll to handle any contingency, they’d be overstaffed 90% of the time, decreasing their profitability.

2. On the other hand, if they keep only a skeleton crew, the delay caused by trying to staff after a large spike would be disastrous for insurance companies. There are strict laws, steep fines and public relations problems if claims are not handled on time, and it is difficult to hire qualified adjusters on short notice.

Managing the ebb and flow of claims volume has created a multi-billion dollar industry called independent claims adjusting. Insurance companies outsource this employment problem to IA firms (Independent Adjusting firms) who handle the overflow claims volume.

This has created two distinct career paths; working for an insurance company as a staff adjuster or working for an IA firm as an independent adjuster. Additionally, within each path, there are a wide variety of claim careers to choose from. Some positions are more stable jobs with salaries but lower pay, and others have more volatility but higher pay. Some are your basic 9 to 5 office jobs; others are more like a military deployment.

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Getting into DifferentKinds of Claims Jobs

Significant changes have taken place in

the business which is good news for new independent

adjusters.

Getting into claims has two distinct paths. Starting a career as a staff adjuster (an employee of an insurance company) is an established process of applying directly to an insurance company through advertised job openings. Larger insurance companies typically require a four-year college degree. There is not much I can do to illuminate this well-established process.

Getting into independent claims adjusting, on the other hand, is not as straight forward. Traditionally, it has been very difficult to break into. It is a little known industry that has functioned for years through word-of-mouth referral; you had to know someone to get in. Additionally, it requires a high level of training and professionalism, but candidates were somehow expected to get qualified before they started working. Many an interested candidate has been discouraged by the “minimum three year experience” qualification listed on IA firms’ application page.

Thankfully, over the past decade a number of significant changes have taken place in the independent claims business. The old word-of-mouth model caused a lot of problems, including a shortage of qualified adjusters. This problem has only gotten worse over the last few years. To fix the broken business model, insurance companies and IA firms have utilized ever-improving technology to make the claims process more “virtual.” The changes in effect are good news for new independent adjusters in two primary ways.

First, whenever there is change, there is opportunity. These changes have created a bounty of entry-level positions for new hires. The industry is actively trying to fill them as you are reading this. Second, these positions do not require nearly the level of training demanded in the past. They focus on part of the full process of adjusting, and include on-the-job training that prepares employees to handle additional responsibilities as they learn. So instead of having to jump into the deep end with the “sink-or-swim” approach, new hires are given more limited tasks that are expanded over time, eventually leading to full-fledged independent claims adjusting.

Ready to get started? Visit www.adjusterpro.com.

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How Much Does Adjusting Pay?

When I last worked as a catastrophe

adjuster, I closed an

average of five claims per day

at an average of $405 per claim.

Claims adjusting is a great paying career, and one of the primary reasons folks are interested in it is the pay. Staff adjusters, on average, make less than independent adjusters. Our latest data from the Bureau of Labor and Statistics shows that the average salary for a staff adjuster is around $60,000, while independent adjusters can average much higher depending on deployments and catastophes in any given year. It is very realistic to expect a six-figure income within a reasonable period of time. Staff adjusters are paid as salaried employees, and positions can include benefits such as health insurance, paid vacations and company-provided equipment. While staff adjusters often have better benefits and job security, there is a trade-off. There is less flexibility and more managerial control and oversight. Independent contractors can expect to make more but also to shoulder more of the responsibility of managing their own income. They also must work to earn job security by continually performing well.

For example, when I worked as a catastrophe adjuster (“CAT adjuster”), on average I could close five hurricane claims per day, with an average payment of $405 a day on my last eight month deployment. And this is not unusual. I know adjusters who are much more efficient than I was, closing quite a few more per day than I did.

Independent adjusters are paid in different ways. Through the main part of a deployment I was paid according to a fee schedule (see left) picture below).

The more claims I closed and the larger the claim, the more I made. As the storm wound down, I would stay on the “clean up crew.” This meant transferring to a “daily rate” (some fixed amount, typically between $500 and $1,200 per day). I would not be required to handle as many claims, but I had to deal with more re-opened, problematic claims which I really enjoyed.

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How Much Does Adjusting Pay? (Cont.)

Over time I transitioned from CAT claims to “daily claims.” These are claims filed by policyholders for normal day-to-day losses. As a property claims adjuster, I handled claims on buildings. These included pipe leaks, tub overflows, kitchen fires and any other scenario you could imagine. As a daily claims adjuster, I was paid “T&E” (time and expense). I would keep track of

my time, and then bill the IA firm anywhere from $35 an hour to $125 an hour, depending on my duties (see below examples of my time sheet and invoice).

Some companies pay according to components. Take a hail loss for example; there is a flat fee for adjusting a roof, an additional fee for siding damage, and again for fence, deck or interior damage, and so on. All methods are an attempt to pay fairly according to the amount of time and know-how it requires to complete the claim.

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What Are the Qualifications for Getting into Independent Claims Adjusting?

First and foremost,

successful adjusters

possess a solid

character.

If you want to pursue a career in independent adjusting, you should know that there are hard and soft qualifications.

Hard qualifications include such things as being over 18 years old, holding an adjuster’s license in your state of residence (or having a designated home state license if you do not live in a licensing state), having a clean criminal record, passing a drug test and maintaining a valid driver’s license.

Additionally, there are professional skills that must be mastered. You must have the capacity to understand insurance policies, work well with computers, conquer estimating software such as Xactimate, and pass the industry certifications required by the IA firm you choose to work for (the State Farm certification, for example). All of the above are minimum entry requirements. The soft skills separate successful adjusters from mediocre ones.

First and foremost, successful adjusters possess a solid character. This is not a career for shady characters; they are quickly weeded out because insurance companies require a high level of integrity. Moreover, hours can be long; above-average work ethic is a must. Going above and beyond is expected.

Following very close behind is the ability to communicate well with others, both in writing and verbally. You must understand that this business is about customer service, and you are often required to communicate effectively with folks who are in a high state of stress. An inability to follow through, easily losing your temper or being unable to read people well will severely limit your career. Modern claims handling is as much about customer and manager satisfaction as it is about being proficient in the technical aspects of the job.

To put it bluntly, employers are looking for candidates with both the hard skills and the soft skills. If this describes you, I can assure you that you will do well in the claims industry.

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Will I Be at a Desk or Climbing Roofs?

The claims business offers an

almost endless

number of career paths.

Thankfully, the claims business is a merit-based industry, with a wide variety of entry-level positions and an almost endless number of career advancement paths. This means employment opportunities regardless of your age, race, gender, physical ability or professional background. For example, if you prefer to be behind a desk because of physical ability or just because of personal preference, changes in the industry have opened a huge number of desk-adjusting positions. These desk jobs usually pay between $25-50 an hour, and require lots of overtime. Usually there is a ton of on-the-job training, and lots of different types of claims come across your desk. The result is a firm base of experience and understanding of the claims business. Success in these positions can lead to in-field claims handling for those desiring this career path. While desk adjusters handle claims over the phone, field adjusters physically visit the loss and interview people in person.

Both desk adjusters and field adjusters handle claims of all kinds; houses, commercial buildings, automobiles, liability, workers’ compensation, aviation, marine and more. Often, adjusters will develop specialties in certain types of claims. I’ve met very successful adjusters who specialize in circular saw claims, for example, and others who have followed their love of airplanes into a career in aviation claims.

Personally, I enjoyed and therefore developed my skills in dispute resolution, which brought me lots of work in mediation and appraisal. Commonly, in the beginning of an adjusting career, you take available assignments, regardless of the type. Although this keeps you on your toes, it also firmly establishes you as a valuable asset, someone who can tackle anything thrown at you.

Ready to get started? Visit www.adjusterpro.com.

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CAT Adjusting

If you manage your money well,

expect down-time with your

family, occasional high intensity

deployments, and a very comfortable

living.

Catastrophe adjusting is very attractive to many people. I’ve ‘retired’ to teaching, but I loved CAT adjusting personally. It’s exciting and lucrative.

There are pluses and minuses about CAT adjusting. Obviously, a significant drawback is that the work is sporadic; no catastrophe, no work. However, non-adjusters might assume that the only catastrophes that happen are the ones that make the news. This is not so. Hailstorms, floods, fires, minor earthquakes, tornadoes, winter storms and more happen all year round. CAT adjusters handle these losses. The more you prove your competence as an independent adjuster, the more often you’ll be deployed to these “choice” assignments. This means is that if you’re good, you get to deploy all the time if you wish.

On the plus side, CAT adjusting is high-energy, challenging and very lucrative. It is also not for the dabbler or overly dependent person. Successful CAT adjusting requires a lot of self-management. Mastery of the claims process, including knowledge of local laws and statutes, constant work on efficiency, and effective communication are a must. A CAT adjuster typically fronts all of his or her expenses, including equipment, travel, transportation and lodging. Discipline with finances is required; if you fail to budget your money well to manage the ebbs and flows of the work volume, the job will burn you out. If you do manage your money well, expect extended vacations and down-time with your family, occasional high-intensity deployments and a very comfortable living.

In today’s independent environment, CAT adjusting will most probably mean a mixture of handling CAT claims both from a desk and in-field, depending on the deployment. Successful CAT adjusters say “yes” to either, even if some deployments pay less than others. Because that’s what successful claims adjusters do; they become the go-to solution for their employer.

Want to learn more about the claims industry? Visit The AdjusterPro Blog.

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Getting Started

The first step to

becoming an adjuster is to secure

your adjuster’s

license.

Daily ClaimsGetting into daily claims has traditionally been something adjusters do after they’ve gained experience in the field as a CAT adjuster or as a staff adjuster. Today, all that has changed. The industry has opened daily claims positions that begin in “hubs,” handling daily claims as desk adjusters. These hubs are in many major metropolitan areas, and smaller branches are located throughout the United States. Under the new arrangement, adjusters working desk claims are typically compensated from $25-50 an hour, with lots of opportunity to make overtime. In fact, overtime is often expected; 10-hour days are common, as are 6 day work-weeks. Obviously, this is not for the faint of heart, but this is true for all claims work. You truly get out of it what you put into it, and there is little room for just doing the minimum.

Okay, this Sounds Interesting. How Do I Get Started?If adjusting sounds attractive to you and you have the capacity to gain the hard and soft qualifications, it’s time to get started. Remember, solid character traits, good people skills and a great work ethic are indispensable!

I like to compare preparing for adjusting as a career to building a house. The foundation comes first, then the framing, then drywall, roof, etc. In preparing to be an adjuster, you should first obtain your license, then begin to master the software and knowledge absolutely necessary to the job, and finally you should continue to expand your eligibility by obtaining additional certifications, skills and knowledge.

Getting LicensedMost states require a license to work as an adjuster. If you live in a state that requires licensing, you must obtain your home state’s license. If you live in a state that does not require licensing, you need to hold a designated home state license, or DHS to work for almost any carrier or IA Firm. For more on designating a home state, see our blog article here.

Depending on the state, AdjusterPro offers pre-licensing or exam prep courses. A pre-licensing course qualifies you to apply for your state license – and it dramatically increases your chance of passing the state exam. What’s more, you can take your pre-licensing course easily online. Employers make no distinction whatsoever between a license obtained through an online class or a live class.

AdjusterPro is, by far, the most trusted source for obtaining your license. The certificate you print at the completion of your course will be included in your application to the state.

You should plan on 40 hours to complete your pre-licensing course. When you submit your application to the state, expect to pay between $50 and $150, depending on the state. How long the application process takes differs from state-to-state also; some states are backlogged, so be prepared to wait from two up to ten weeks.

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Software Training

AdjusterPro’s live, instructor-led

Xactimate classes are 100% online,

and supremely effective.

The days of adjusters hand writing claims on paper forms are long gone. Everything is computer-based now. You will need to learn an estimating software, and by far the most widely used software is Xactimate. Unless you already have a job lined up with a company that does not use it, you should learn and master Xactimate, because this will give you the widest possible employment opportunity. Other software platforms can be added to your repertoire later as needed.

Expect to spend a significant amount of time learning and practicing on Xactimate. Our live, instructor-led classes are 100% online, and supremely effective, even for a beginner. This means you can learn it on your own computer in the comfort of your own home, ask all the questions you want, and ramp up quickly.

We will help you get set up with a 30-day free demo of Xactimate that you can use during training. Xactware will extend your 30-days if you call in and request an extension, but 30 days should suffice if you practice. When you go to work, your employer may absorb the cost of your Xactimate subscription, depending on the employer and the assignment. If you have to cover the cost, expect to pay in the neighborhood of $1,600 per year. This may seem like a lot of money, but you’ll make enough to cover the entire year very quickly with your first assignment as an adjuster.

In addition to Xactimate, you will need to master your employer’s software systems. The only sure-fire way to do this is to start working; they’ll provide on-the-job training. It can be a lot to digest in a very short period of time, but you will be an old pro after a couple of weeks of diligent work.

Have questions? Email us at info@adjusterpro.com.

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Additional Training

I have found that the folks who

really do well in this business are intelligently and

systematically adding

qualifications to their resume.

One interesting development in the current claims environment is that you may not know ahead of time what kind of claims you will be assigned on your first deployment. This can make it tricky to pinpoint exactly what to study first. For example, you may not know if you will be assigned auto claims or property claims. The good news is that current entry-level positions typically limit you to a specific part of the claims process, which has the effect of letting you learn in smaller “bites” as you get trained in additional areas.

Does this mean all you need is a license and Xactimate training? By no means. You should begin immediately to expand your qualifications by adding professional certifications, additional training on how to adjust claims, and additional state licenses. I have found that the folks who really do well in this business are intelligently and systematically adding qualifications to their resume that make them progressively more deployable.

For example; you’ll never work State Farm claims without a State Farm certification. You can’t work claims in Bismarck, NY without a New York license (even if you’re at a desk in Phoenix, AZ). You can’t do claims with steep roofs without a Rope Access certification, and so on. Getting a handle on what employers are looking for and adding additional qualifications to your resume in a prioritized, systematic way is what you need to do.

AdjusterPro’s specialty is giving you the help and direction you need as you work to improve yourself and your qualifications. We’ll help you build a plan and be ready for what you need to focus on next.

Ready to get started? Visit www.adjusterpro.com.

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Getting Your First Job

If you are serious about making a career in claims adjusting, there

has never been a better time.

Having helped literally thousands of folks break into the claims industry, we’ve gained years of insight into how to start. We offer some great video-based resources that will walk you step by step through the process, from getting licensed to the successful completion of your first deployment. Becoming an adjuster is an important step to take, and AdjusterPro offers everything you will need in an easy to use, online format, including downloadable resume templates and more.

www.adjusterpro.com

ConclusionInsurance adjusting is a rewarding, high-paying industry, but it’s not for everyone. If you are serious about making a career in claims adjusting, however, there has never been a better time. Industry-wide changes have opened the door to new hires, and the initial investment to get licensed and trained is minimal compared to the level of pay in the industry. I encourage you to think it over carefully, make sure you are willing to jump in whole-heartedly, and then contact us when you are ready!