The Changing Face of Independent Claims

Adam Gardiner | AdjusterPro® Blog | October 2, 2015

First in a seven-part series on the evolving state of the claims industry.

The independent claims industry is a bit like the Wild West: unpredictable, with few rules only erratically enforced and where only the strong survive.

It’s tough. It requires grit.  But often enough, you get to be the good guy wearing the white Stetson.

Yes, for the right cowboy (or cowgirl), independent adjusting is a rewarding career.  But you should know something.  While it’s still rough and tumble, the West is slowly being tamed.

Changes are afoot and those that best anticipate and adapt will win out in the new dispensation.

But before we understand how the West is being tamed and what it means, we need to look at how it was born.


Independent claims adjusting arose in the early 70’s from a simple need: to buffer spikes in claims volume.  Insurance carriers began to outsource “overflow” claims to independent adjusters.  Because these adjusters served as independent contractors, carriers saved money by not directly employing a massive army of adjusters – which they would otherwise need in the event of a major catastrophe.

Otherwise, a permanent Hurricane Katrina-sized workforce would largely sit idle.

To insurance carriers, the use of independent adjusters ceased to be a luxury decades ago — becoming instead an economical necessity.  And a billion dollar independent claims industry got its spurs.


Until recently, independent adjusting was been virtually synonymous with catastrophe adjusting.  And, since mobilizing thousands of adjusters in a matter of days in response to a catastrophe is expensive and messy, there were consequences.  Industry regulation was spotty, career paths unclear, training was all over the map, and safety rules were only randomly applied.  Things got tense and untidy.

Independent adjusting firms and adjusters tough enough to survive were paid handsomely.

Carriers, it turned out, were willing to pay millions to clean up claim spikes quickly enough to keep them out of trouble with regulators and skirt the wrath of the public.

And the industry still prefers the open range: low regulation, high expectation, unpredictability, and the chance of a big pay-day.  It’s a maverick industry, from the family-owned firms to the adjusters riding solitary in the field.

But industries evolve, and the claims industry is in an important evolutionary stage right now.


Rather than outsourcing as an economic necessity, carriers increasingly see a real strategic advantage in the use of independent adjusters – in particular, a long-term advantage.

They’re transferring the expense, hassle and liability of employees onto independent adjusting firms.

In effect, the independent industry is becoming a human resource solution: ‘leasing’ employees rather than hiring; outsourcing an entire “department” of an industry.  And, as they lean ever more heavily on independents as a long-term solution, carriers gradually tame the Wild West.


Outsourcing claims as a department is a bold move.  It means relinquishing full control of customer satisfaction for a growing percentage of non-catastrophe claims.

On the other hand, outsourcing grants carriers some enticing advantages.

One advantage is flexibility.  Cumbersome employee rights make it onerous to fire or lay off salaried employees, but independent adjusters are easily hired or let go in direct proportion to fluctuating claims volume.

Another advantage is financial. Using leased employees evades the burden of costly employee benefits.  This adds up to millions of dollars saved — a massive competitive advantage for the carriers and their shareholders.


Predictions are that the culture and the nature of the independent industry will continue to change until it is…

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