As an insurer, employing loss adjusters to assess and settle claims is a deliberate choice that requires careful consideration of both potential advantages and drawbacks for both sides. Here, we examine what are considered to be some advantages and disadvantages of using loss adjusters from an insurer perspective. If you’re a policyholder making a claim, we recommend you contact a loss assessor like Claimrite. Loss assessors are the only party that work solely in your best interest.
Pros
Experience and Efficiency
Loss adjusters bring extensive expertise and efficiency to the claims process, enabling quicker and more accurate assessments of losses. Their services help insurers expedite settlements faster while simultaneously increasing customer satisfaction and decreasing processing times.
Cost Savings
Loss adjusters charge fees for their services, but their expertise often leads to more accurate assessments of damages which helps insurers prevent overpayment on claims, saving money over time.
Objective Assessment
Loss adjusters provide impartial evaluations of claims, helping insurers avoid potential bias that can occur from handling them internally. Their objective assessment increases credibility of claims processes while decreasing disputes with policyholders.
Resource Optimization
By outsourcing claims assessment and settlement to loss adjusters, insurers can better utilise their internal resources by allocating them more efficiently, which allows them to focus more on core operations and strategic initiatives rather than being bogged down with individual claims details.
Risk Mitigation
Loss adjusters play an essential role in helping insurers detect fraudulent or exaggerated claims, helping mitigate risk and limit losses associated with fraudulent activity. Their thorough investigations and documentation strengthen insurers’ defences against false or exaggerated claims.
Cons
Increased Costs
Utilising loss adjusters adds another expense to the claims process for insurers, as they must pay them. While their expenses are often justified by their services and benefits brought forth, their presence still impacts insurers’ bottom lines and must be carefully managed.
Loss of Control
Outsourcing claims evaluation requires relinquishing some control of the process to loss adjusters, who must act in both your and policyholder’s best interest, which may not always coincide perfectly.
Conflict of Interest
Loss adjusters could prioritise relationships with policyholders over maximising fees for themselves, leading to potential conflicts of interest. Insurers should carefully vet and monitor loss adjuster performance so as to mitigate this risk.
Communication Challenges
Working with external loss adjusters can create communication issues between their internal claims teams and external loss adjusters, including any discrepancies or misunderstandings between adjusters and internal claim teams. Insurance carriers must ensure there are clear and efficient channels of communication to avoid delays or errors during claims processes.
Quality Control
Not all loss adjusters provide equal services or adhere to insurer standards and procedures, so insurers must implement rigorous quality control measures to ensure loss adjusters meet expectations and deliver consistent results.
Conclusion
Employing loss adjusters can bring considerable benefits for insurers in terms of expertise, efficiency, cost savings, risk mitigation and resource optimization; however, employing them comes with additional challenges, including increased costs, loss of control over conflicts of interest and quality control concerns; insurers must carefully consider these considerations when using loss adjusters in claims processing to maximise value derived from using loss adjusters in this process.
