Well-Adjusted

The Texas insurance adjuster license is easily the most sought after adjuster license in the country.  Famed for its extremely high level of reciprocity with other states’ licenses, the Texas adjuster license is often perceived as a cure-all to companies and independent adjusters looking for comprehensive licensure.  But what are the real implications of becoming a licensed Texas adjuster and are the common representations accurate?  Understanding the true reciprocal benefits of this license will enable companies to make sound licensing decisions for their staff adjusters and allow independent adjusters to maintain well-informed expectations and save time and money.  Let’s separate reality from common perception and demystify the nation’s most coveted adjuster license.

License Overview

There are two types of multi-line adjuster licenses that may be obtained through the Texas Department of Insurance (TDI): the 1) all-lines license and b) property and casualty license.  The all-lines designation enables licensees to handle residential, commercial, automobile, farm and ranch, inland marine, ocean marine, and worker’s compensation claims.  The property and casualty (P&C) license is different only in that it does not certify licensees to handle worker’s compensation claims.  For the purposes of property adjusters, particularly cat adjusters, these licenses are effectively the same.  Another distinction regarding licensure is the resident vs. non-resident status of the license.  While both certify its designees to work the exact same types of claims, there are absolutely crucial differences with regards to reciprocity that will be explained in greater detail below.

Obtaining the Texas Adjuster License

Obtaining your Texas adjuster license, be it all-lines or property and casualty, is ordinarily accomplished by taking either 1) the state exam administered by Prometric or 2) a certified pre-licensing course.  The state exam is notoriously difficult and there is absolutely no guarantee of passing the exam.  Many veterans within the insurance industry, counting on expertise in their particular field, have failed the exam owing to unexpected questions asked on more obscure lines such as farm and ranch and inland and ocean marine.  The state exam must be scheduled with Prometric and exam study courses are available to assist in preparation.  Pre-licensing courses are 40 hour classroom or online courses that are offered as substitutes for taking the state exam.  The 40 hours consist of 30 “classroom” hours and 10 hours of self-study.  An exam consisting of 150 questions is generally administered at the end of the course and serves as the culminating evaluation for the prospective adjusters.  The pre-licensing course satisfies all Texas Department of Insurance requirements for obtaining the Texas adjuster license.  Once the state exam or a pre-licensing course is completed, students must still submit their application to the state.  Application processing typically takes between 2 and 4 weeks.  The application may require a criminal background check and fingerprinting for successful submission.  Finally, any adjuster holding a CPCU or AIC designation is exempt from taking any course or exam and may immediately apply for licensure. 

Reciprocity and the Texas License

The reciprocal benefits of the Texas adjuster license are poorly understood and inaccurately represented.  One common misconception holds that once licensed as an adjuster in Texas you are automatically licensed in 32 other states as well.  Other notions have it that the Texas license is reciprocal with every other state in the country or that it is by far the most reciprocal license.  While certainly a powerful license, these statements incorrectly apply the principles of reciprocity and the scope of influence that this license truly has.  The real answer, unfortunately, is slightly complex and, because each state’s interpretation of reciprocity is different, varies from state to state.  Nonetheless, coming to a correct understanding of the situation is vital and will prevent undue expense of time and money for companies and individuals alike. 

First, what is reciprocity?  Reciprocity, generally speaking, is the principle whereby the favors, benefits, designations, or penalties granted by one state to the residents of another state should be returned in kind.  In the context of adjuster licensing, it means that if one state, say Florida, licenses adjusters already licensed in Texas, then Texas should do the same for those adjusters licensed in Florida.  That is the basic principle.  Most states, with the notable exceptions of Nevada, Hawaii, New York, Arizona, and South Carolina, are reciprocal with most other states that license adjusters.  The matter becomes complicated when dealing with non-resident licenses.  Many states (Kansas, Missouri, Pennsylvania, Ohio, Illinois, and Colorado to name a few) do not require their adjusters to be licensed.  Thus a twenty year adjuster from Kansas City wishing to become licensed in Georgia to work hurricane claims might have a problem because there is no license in Kansas for Georgia to be reciprocal with.  A Texas non-resident license is then often turned to as a means of resolving this dilemma.  The results can be disappointing.  Georgia, like many other states, mandates that if you do not hold a resident license you must pass their exam before successfully applying for licensure.  It is unfortunate that adjusters in states that don’t require licenses are punished when it comes to reciprocal privileges.  On the other hand states such as Georgia are merely trying to close reciprocal loopholes (i.e. Georgia residents attempting to get licensed in Georgia without taking the state exam by using a non-resident Texas adjuster license).  There are, however, some states (i.e. Alabama) that aren’t concerned whether your license is resident or non-resident. 

The lesson to be learned is that the matter should be examined on a case by case basis and should consider a) your state of residence b) the licenses you hold and their resident/non-resident status and c) the policies by state of the licenses you wish to obtain.  Again, merely holding a Texas license doesn’t guarantee reciprocal licensure in most states.  The most important consideration and the factor that will most influence the level of reciprocity to be enjoyed is the resident/non-resident factor.  Adjusters holding resident licenses will be able to gain far greater reciprocal privileges than those holding non-resident licenses – regardless of the state.

Other benefits of the Texas License

There are other benefits, aside from reciprocity, to be gained by obtaining the Texas adjuster license.  Within the independent insurance adjuster industry, and especially among cat (catastrophic) adjusters, the Texas adjuster license is probably the most widely recognized and respected of licenses.  Many adjusting firms that contract IAs to work claims are based in Texas.  Having this license may be even be mandatory as a prerequisite to employment in some cases, whether you are a resident of Texas or not. 

Another benefit of this license is that it is relatively easy to obtain.  Online licensing courses and an abundance of regularly scheduled classroom licensing courses are available for immediate registration.  Most other states lack the educational resources and support for licensure that are hallmarks of the Texas Department of Insurance and its licenses. 

With the greatest number of hurricanes making landfall, Florida is historically the busiest state for catastrophic claims adjusting.  Florida residents interested in working as a staff or independent claims adjuster must first obtain the Florida adjuster license.  Non-residents of Florida considering a career in catastrophic claims, particularly residents of states not requiring an adjuster license, should strongly consider obtaining a non-resident license in the “hurricane state”.  Follow these 3 steps to obtain and maintain your adjuster license in Florida: 

Step 1) Observe the Requirements

To become licensed as a resident staff or independent adjuster in Florida, individuals must:

• Be at least 18 years of age.
• Be a resident of the state of Florida.
• Complete an online application for License and submit appropriate fees.
• Be a U.S. citizen or legal alien who possesses a work authorization for the Immigration and Naturalization Services.
• Be fingerprinted at one of the Department’s fingerprint sites.
• If licensed in another state within 3 years, provide a Letter of Clearance.
• Successfully complete 1) an approved adjuster designation course (i.e. Florida Certified Adjuster {CA} Designation) or 2) the Florida Adjuster Examination.

If an individual already holds a general agent license and wishes to add or convert to an adjuster, one must apply online and submit the fee of $55 – no examination is required. 

To become licensed as a non-resident staff or independent adjuster in Florida, individuals must: 

• Be at least 18 years of age.
• Not be a resident of Florida.
• Complete an online application for License and submit appropriate fees.
• Be a U.S. citizen or legal alien who possesses a work authorization for the Immigration and Naturalization Services.
• Be fingerprinted on cards provided by the Florida Department of Financial Services.  Two fingerprint cards are mailed to the applicant.
• For reciprocal licensing, the applicant’s home state must have a reciprocal agreement with Florida.
• If the applicant does not meet the reciprocal requirement listed above, he or she must take either 1) an approved adjuster designation course (i.e. Florida Certified Adjuster Designation) or 2) take and pass the Florida Adjuster Examination.
  

Step 2) Obtain the License 

Unless you are eligible for reciprocal licensing, you will need to successfully complete an approved designation course or pass the state exam.  The Florida Certified Adjuster Designation Course, for example, satisfies all educational and evaluation requirements for obtaining the Florida adjuster license.  The course is available in online or classroom format.  The 4 day classroom course consists of 40 hours in-class time and a series of quizzes administered twice daily.  Cumulatively, these quizzes replace a final examination and are designed to be student friendly.  Topics of the course range from General & Homeowner’s Liability to Automobile Physical Damage Adjusting to Commercial and Homeowner’s Property Adjusting.  Designation courses such as the Certified Adjuster course enjoy extremely high student pass ratios.  Once the course is completed, graduates need only submit their online application (observing the requirements above) and they can expect to be licensed within weeks. 

The state exam can also be taken to satisfy the educational requirements.  The state exam is notoriously difficult and generally requires considerable preparation before it can be taken with realistic chances of success.  Still, it can at times offer a slightly faster, if uncertain, route to licensure. 

Step 3) Maintain the License 

Florida requires 24 hours of continuing education (CE) that must consist of at 2 hours ethics and 10 hours law.  The remaining 12 hours are optional.  The reporting period for completing Florida CE is 2 years. 

Summary: Becoming a licensed Florida insurance adjuster will become increasingly important for those interested in working catastrophic claims in this time of volatile weather activity.  Observing the requirements for licensure will ensure a smooth and expeditious transition into the world of claims.  Solid educational opportunities exist that will exempt prospective licensees from taking the state exam.

In an increasingly digitized workplace the demands of technical knowledge placed on insurance claims adjusters have expanded beyond simply knowing the logistics of property loss. Indeed, you must also know the software that knows the logistics of property loss. That software is Xactimate 25 by Xactware Inc.

Xactimate Overview

Xactimate 25, used by an estimated 75% of independent adjusters and 15 of the top 20 property insurers, is a robust program that generates an estimate of how much money it will take to return covered property to its pre-existing condition (less depreciation where applicable). The program relies upon a massive database that updates bi-weekly the cost for labor and virtually all commonly encountered materials for every county in the United States. The prices are historically quite accurate, although when necessary, you are able to manually override the price of particular materials and/or labor. The program is simply one of “How Much?” and “What kind of Stuff?”.

How Xactimate Works

Here is a simplified version of how it works: you are sent to adjust a claim for a residential property damaged by extreme high winds in Bourbon County, Kansas. 70% of the shingles on the 3 tab roof have been completely blown away. You decide the roof is totaled and that 100% of the roof will need replacement. After taking measurement of the roof (20 squares), you enter the dimensions into the Xactimate program in either Sketch (a more visual drawing component) or through simple dimensioning. Once the “How Much?” has been determined its time to address “What kind of Stuff?”. By searching the database (as one might search in Google or Yahoo) for the appropriate code for 3 tab shingles, you are able to apply the right “stuff” to the “how much” or 20 squares. Xactimate then draws upon its database of price for labor and 3 tab shingles for Bourbon County and generates a figure. This figure is included as the final recommended settlement amount for the claim in your estimate. In this way, Xactimate allows adjusters to accurately determine replacement costs for damaged property anywhere in the United States.

Previously, with hand-written estimates, the adjuster needed to have a good understanding of cost of labor and materials for the particular area he or she was working. As prices fluctuate dramatically, for instance prices in Miami Beach being substantially higher than prices in a rural part of the Midwest, it became a real challenge to the traveling adjuster. Xactimate takes the guesswork out, and not surprisingly, the days of hand-written claims are essentially over. The drawback of such a powerful program, of course, is that claims adjuster can get by with knowing less. Less familiarity with the prices of materials and labor cannot help but mean less familiarity with the materials and labor themselves. The end result is that Xactimate knows more so the adjuster may know less. Still, the advantages of efficiency, accuracy, and estimating speed cannot be taken lightly.

Conclusion

Property loss estimating in the 21st century will inevitably become more digitized and reliant on technology. Xactimate stands at the forefront of such developments and, if Xactware Inc. maintains its high standards and quality team, they will remain there for many years to come. Yet not all estimating can be boiled down to a computer. Each loss is unique and when property is damaged judgments must be made, and the only judge suitable to be the final arbiter of such claims is a flesh-and-blood claims adjuster. Technology will advance, and the successful insurance adjuster will be the one who most efficiently harnesses it to enforce reason, conscience, and sound judgment.

Openings in Austin, Houston, San Antonio, and Amarillo - click here.

The question has been put before me many times “How do I get a job as an adjuster with a major insurance company?”. Initially my answer was so simple and straightforward as to be nearly a non-answer - “Contact and apply”. But, as you could guess, its not quite that easy. From my brief research, if you want to apply for a position as a claims rep or claims adjuster with an All-State or StateFarm you must do so over the internet. Ok, so no major problem there. However, it begins to get a little sticky after that. It isn’t actually possible to upload your resume into a general human resources database. Instead you must search for an available position and submit your resume in response to a particular job title opening in a particular geographical location. The problem then of course is that, for the state of Minnesota as a hypothetical example, may only show two openings in two disparate rural areas. One has to believe that the opportunities are greater than that! So how about contacting a real person who can give you real answers and maybe even steer you in the right direction? Its not easy. So, I’ll be cracking this nut over the next several days in an effort to give a solid game-plan for efficiently and effectively applying for a big-time insurance company. Stay tuned.

After a short hiatus, the Well-Adjusted blog is back in the saddle.  I’ll be posting comments, links, and stories relevant to your claims career with far greater regularity.  I’m also going to be conducting some job search experiments based upon frequently asked questions that I hope will prove useful.

I just came across this website that might be a very good resource for those on the job hunt. Let me know if it works out for any you! I found the listings by Eagle Adjusting to be of particular interest…

How much insurance claims adjusters can make per annum is the subject of considerable interest and speculation to those interested in a career in claims. As unstable weather continues into the fall, and the Atlantic hurricane season reaches its stride, its important to correctly understand the financial landscape of the adjuster industry.

Some folks have heard from their girlfriend’s brother or an estranged uncle that claims adjusting is a money tree. The money tree sits there blooming Benjamins, apparently just waiting happily to be plucked by any newcomer with the inside scoop. And as an added bonus, you really don’t have to do work. The opposite extreme is my own previous misconception of the monetary compensation for claims adjusters which is that they made next to nothing and it was essentially a dead end job. This is as far from the truth as the money tree concept but, I would hazard to guess, a much more prevalent misunderstanding.

So how much money does an insurance adjuster really make?

According to the U.S. Department of Labor, claims adjusters earned an average of $44,220 in 2004. The top ten percent earned more than $72,620. The bottom ten percent earned less than $27,220. This seems like a fairly significant disparity. What type of adjuster is at the bottom and what type at the top?

The answer to this question depends largely upon the type of claims adjuster you are referring to. In general, there are two types of adjusters: staff adjusters who are salaried employees of an insurance carrier, and independent adjusters who are independent contractors working for adjusting firms. This initial difference will make as much of a difference in pay structure as the type of claims actually handled - from worker’s compensation to multi-million dollar commercial properties.

Staff adjusters are typically going to be earning less than independent adjusters and in some cases dramatically less. $25,000-$60,000 is a reasonable salary range for a career staff claim adjuster.

An independent adjuster in a good year, however, especially if he or she works catastrophe claims, can make well in excess of $100,000.

Staff adjusters can make a good stable living. For independent adjusters, the opportunity can be a little more interesting and, I think, exciting. Independent adjusters working catastrophe claims make essentially a percentage of the amount of each claim they settle. This system of payment is known as a fee schedule and is formulated differently for each insurance carrier represented and storm situation confronted. For example, an independent adjuster handling hurricane claims may receive a fee schedule that pays $500 for claims between $3,000 to $5,000, $650 for claims between $5,000 and $7,500, and $750 for claims between $7,500 and $10,000. An adjuster will receive between 60-70% with the other 30-40% going to the adjusting firm they work for. Hurricane adjusters can easily average $10,000 settlement per claim and thus average between $400 and $500 dollars in their pocket per claim. A good adjuster should be closing 2 to 4 claims per day with superb adjuster closing 4 to 7.

Making over $1,000 a day as an independent adjuster working catastrophe claims is common and very attainable. In this way, a good independent adjuster can surpass six figures income in less than six months.

So, is this the money tree after all? Well, not so fast. Remember that catastrophes, especially catastrophes sufficient to employ significant numbers of adjusters, are relatively few and far between. During “dry” spells for independent adjusters, work can be scarce and competition fierce for the claims that do come along. That said, there is a tremendous and exciting opportunity for very real, very lucrative money when disaster does strike.

Whether its operating on staff or as independent contractor, claims adjusting offers potential for solid and, in some cases, spectacular income.

Diamond National Adjusting LLC seeks adjuster/appraiser to cover their San Jose, CA territory.  Read More…

Hanover Insurance Group is seeking a Workers Compensation Adjuster at their headquarters in Worcester, MA. Read More…

Progressive Group of Insurance seeks a Claims Adjuster Trainee in Naperville, Illinois. Read More…

Erie Insurance Group seeks Property Adjuster in Chicago, Illinois. Read More…

The Hanover Insurance Group seeks experienced Inside Auto Liability Adjuster in their Somerset, NJ office. Read More…

The Hanover Insurance Group seeks a candidate to be trained as a Bodily Injury Adjuster in Braintree, MA office. Read More…

The doors are open.  According to California Insurance Commissioner Steve Poizner:

“The California Department of Insurance (CDI) proclamation will allow CDI-licensed insurance adjusters and insurers to use the services of non-CDI licensed adjusters, such as those from out-of-state, to assist with the processing of the multitude of anticipated insurance claims arising from the fire storms.”

Click here for the official DOI Declaration or read the entire press release.