What is an Insurance Adjustment | With Adjusting Options to Consider

What is an insurance adjustment? Insurance companies reimburse hospital charges at a reduced rate. The amount of the discount varies by the insurance company.

These disagreements are resolved by adjusting the claim or, if necessary, the appraisal procedure, a simple and affordable type of arbitration. However, numerous recent changes in the wording of specific policies have eliminated the appraisal process in favor of requiring the parties to litigate.

Appraisers act as negotiators. This straightforward fact seems to be the most difficult for policyholders to understand. The dictionary defines the term “adjust” as “to settle or bring to a satisfactory state so that the parties agree on the outcome: to settle our differences, come to an agreement, and determine the amount you must pay as in settlement of an insurance claim.”

Historically, only the insurance company representative was considered an adjuster. Historically, the insured has been called the adjuster, who receives the adjustment.

If you have difficulty visualizing yourself as an adjuster, it’s probably due to the word itself. When a role is incompatible with your history, education, and experience, it’s natural to have difficulty taking it on.

Some Adjusting Options to Consider

What is an Insurance Adjustment

Allow the company’s insurance adjuster to handle your claim.

Use a public adjuster. However, they do exist. They are rare and limited in number, but they do exist.

You must adjust the claim. This involves much more than simply notifying the company of the claim. It consists in calculating what you are entitled to, presenting it in a way that makes them understand that you are aware of your rights, and learning how to negotiate effectively on your behalf.

  • You must decide how you will approach the situation from the outset.
  • Once authority has been ceded, it is tough to regain it.
  • Some insurance adjustment tips

Read the Loss Notice

The notice of loss is one of the first documents the adjuster will review. It provides the adjuster with critical information that enables them to adequately prepare to meet the obligations imposed by the State’s Fair Claims Settlement Practices Act and Fair Claims Settlement Practices Rules.

  • The location of the claim
  • When the occurrence took place,
  • The extent of the insured’s coverage
  • The nature of the loss

Read the Policy

The adjuster should know the terms and circumstances of the insurer’s contract with the insured. To understand a property insurance policy firsthand, the adjuster must study and examine it thoroughly. The facts of each particular claim help explain and color the interpretation of the insurance contract, adding nuance to the policy wording. 

Before a loss adjuster can begin investigating a claim, they must establish or confirm coverage. He must obtain an exact duplicate of the insurance policy to do this.

The company’s copy (commonly referred to as a “journal”), so the data is on a private website accessible only to employees and officers of the insurer.

If the database is unavailable, the adjuster can obtain an electronic or paper copy of the policy by checking a current manuscript in the insured’s, insurance agents, or broker’s possession.

For example, is it a standard fire policy covering numerous listed perils, an older “all risks” policy, or a policy covering the immediate risk of physical loss?

The adjuster should be aware of all exclusions, restrictions, and exceptions to coverage.

Meet with the Insured and Witnesses

Once the adjuster has completed the initial preparation of the notice of loss assessment and policy language, they should contact the insured immediately (no later than 24 hours after receiving the information of loss) and arrange a meeting with the insured and witnesses as soon as possible. The loss adjuster must inform the insured that he must show his loss to the insurer under the policy terms.

To provide the best possible service and conduct itself in good faith with its insureds, the insurer employs adjusters to assist the insured in establishing the extent of his loss. The adjuster has no authority to prove the insured’s loss; he is present only to assist the insured.

Suppose the notice of loss and the policy wording indicates a potential coverage problem. While explaining that, if you need more time, the adjuster and the insurer, which he represents, will grant the insured any reasonable extension of time the insured asks for.

Get a Recorded Declaration

The adjuster should answer the most important questions about the policy and the loss. The adjuster’s ability to answer these questions will help the customer service officer provide the necessary support. Some insurers are reluctant to give a recorded statement, either in person or by telephone, and the adjuster should take the time necessary to accustom the insured to this technique.

Once the messages have been converted into an account, they should be sent to the insured to read, amend, sign, and date.

Moreover, you should pay close attention to how the tab is punched to avoid tampering with the recording. So, if the statement has digital records, it should transcribe and give them to the insured to read, correct, sign, and date.

Create the Sum of the Damage and Claim

To help the insured meet its requirement to prove the loss, the adjuster must first determine the precise extent of the damage with the insured at the initial visit. This requires the loss adjuster and the insured (or his representative) to tour the insured’s home or business. Also, to agree on precisely what has been damaged or destroyed due to the insured’s peril.

The loss adjuster may obtain this agreement orally or in writing using a tape recorder. So, you must specify the scope of the loss in detail. The content of the loss should include descriptions of the size of the room. 

While claiming the damage adjuster should not:

  • Leave blank papers for the insured, except for supplemental items discovered after performing the basic scope of work.
  • Consider only a portion of the scope and attempt the rest later.
  • Rely on the knowledge of the insured’s assistant.
  • Rely on a contractor to define the scope of work.

Frequently Asked Questions

How does insurance adjusting work?

The work of loss adjusters determines an insurance company’s appropriate compensation. Loss adjusters question claimants and witnesses, and property is examined. In addition, to conduct additional investigations, such as reviewing police reports.

What is claim adjustment?

Claims adjusting are the process of identifying coverage, establishing legal fault, and settling a claim. The claims function ensures that the insurer meets its commitments to policyholders.

What is the difference between an insurance payment and an adjustment?

The amount you agree upon by the healthcare provider not to collect is the adjustment itself. Insurer payment is the amount your health insurance company has previously paid. Patient payments: the amount you owe

What is the adjustment amount?

An adjustment amount equals the maximum cash settlement amount concerning a credit event and a reference obligation, less the cash settlement amount for the corresponding credit event, with a minimum of zero.

What is the difference between a write-off and an adjustment?

A contractual adjustment is an amount that an insurance company agrees to accept as a participating provider. A write-off is the amount of money you cannot recover from a patient for various reasons.

Bottom line

Insurance payments are funds that your insurer has paid to the hospital. Insurance adjustments are discounts negotiated on your behalf by your insurance company. The remainder is (for the most part) your responsibility. However, complications can arise when a third party (liability insurance) is present.


Adam Grabois is an expert in all aspects of Insurance and Property with 20 years of experience. He is a licensed broker of all lines including property, casualty, life, and health. As a licensed adjuster, he is well-versed in all aspects of insurance, and he owns All Needs Insurance agency in Florida.

He attended Tufts University where he earned his undergraduate degree, followed by a Master's degree from Columbia University.

Adam shares his breadth of experience by helping many businesses and individuals manage risk and protect themselves financially. He now shares this with the audience of the "Pro Insurance Info" website.

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