Just how are adjusters paid?
Are Independent or Staff Adjusters expected to pay out of pocket for all job related travel expenses?
– A.T. Chrisler
Two great questions which I’ll try to tackle in this morning’s post.
First, lets review how adjusters are paid.
Staff adjusters are almost always salaried employees of insurance companies and are therefore compensated in the traditional form of a bi-weekly paycheck with taxes taken out.
Independent adjusters, however, are typically 1099 independent contractors who must handle calculation of their own taxes (get an accountant and do it quarterly!).
The particular method of compensation is generally done in one of two ways:
- Fee Schedule: In this arrangement, independent adjusters are compensated on a per claim basis with the amount determined as a percentage of the final claim settlement amount. Payment should be rendered roughly every two weeks but only for those claims which have been successfully closed and paid out. Submission of a claim to file-review does not constitute successful closure!
- Daily Rate: As it sounds, a daily rate is a set amount an adjuster makes for each day on duty and can range widely – from $250 a day to upwards of $750 depending on the complexity of the work and the severity of need. Usually there are some basic expectations or possibly even some hard and fast stipulations in place about how much an adjuster must accomplish each day (i.e., average 3 claims inspected, 2 files submitted per day). This is a less common arrangement than a fee schedule.
Now, to address the second question.
Staff adjusters rarely if ever are expected to handle travel expenses.
Independent adjusters, on the other hand, frequently must do so. This could include purchase and upkeep of your own software estimating system (i.e. Xactimate, IntegriClaim), all travel costs to and from a CAT, housing costs, food costs, etc. These are all significant certainly but you are being compensated well enough to make it a good deal even still. That said, learning how to live thriftily becomes very important while on assignment and as your paychecks are often quite sizable it can be a challenge not to become a free-spender. Not only do you need to make hay while the sun shines, you should be putting most of it in the barn for winter!