Adjusting Firm
An adjusting firm is a third-party insurance organization that employs adjusters to investigate, manage, and adjust claims on behalf of insurance carriers or policyholders. Adjusting firms can be independent or public.
Independent adjusting firms work on behalf of insurers and may work with more than one carrier, while public adjusting firms work on behalf of policyholders. Many independent and public adjusters work for adjusting firms.
What is the Difference Between Independent and Public Adjusting Firms?
| Independent | Public |
| Manages claims on behalf of insurers, but is not limited to one single carrier. | Negotiates claims on behalf of policyholders. |
| Is often hired to help manage unusually high claim volumes during catastrophic events. | Is hired to help policyholders prepare, present, and settle claims with insurers. |
| Contracts with an insurance carrier. | Contracts with a policyholder. |
Why Are Adjusting Firms Important?
Insurance carriers do not always have the capacity to manage the volume of claims they receive in-house. Hiring independent adjusting firms allows insurers to scale operations efficiently and handle surges in claim volume in a cost-effective manner.
Public adjusting firms, by contrast, advocate for policyholders during the claims adjusting process. By providing claims expertise and assistance with documentation, they save policyholders time and resources.
How Do Adjusting Firms Function in the Claims Process?
Understanding adjusting firms requires an explanation of the key concepts within the insurance claim process.
- Carrier: Financially responsible for the claim settlement determined by the adjusting firm.
- Adjuster: Independent or public adjusters may work for independent or public adjusting firms.
- Claim: A formal request from a policyholder to an insurer to receive payment for losses covered under an insurance policy.
- Claimant: The claimant is the individual or entity that files a claim with an insurer. They may work with public adjusting firms to negotiate their claims.
- Claims Management Company: A third-party organization that oversees the entire claims process.