When a property owner suffers a major loss and meets an insurance adjuster in the field, it is natural to assume that the adjuster standing in the living room is the person who can decide how much gets paid. The reality is more complicated, and understanding it is critical for anyone negotiating with insurers.
This topic came about as a result of a question posed to me by public adjuster Jack Hanks, who was the moderator of a panel on which Steve Badger and I were on last week at the very successful Win The Storm conference. Hanks asked me what would be the one thing I would demand from Badger if he were running an insurance company. I responded by saying that Badger should give his field adjusters much higher claims payment authority because the current situation is killing the swift claims adjustment process.
I briefly touched on this topic in yesterday’s post, Mastery of Claims Comes with Years of Dedicated Experience.
The Myth of the Field Adjuster’s Power
Most field adjusters do not have unlimited check-writing authority. Their role is primarily investigative: they gather facts, take photographs, measure damages, and input estimates. When it comes to writing checks, they often have strict limits that are very low.
New adjusters may begin with authority of only a few thousand dollars. More experienced adjusters might be able to settle claims in the range of $20,000 to $50,000. Anything beyond that almost always requires escalation to a supervisor, claims manager, or committee.
Even for million-dollar policies, the person a policyholder meets in the field may only be authorized to issue relatively small advances. Larger or final settlement offers are usually made by someone higher up in the company.
Where Those Limits Come From
The specific dollar amounts are usually considered confidential, but insurers do not run without structure. These authority limits are spelled out in several places. Carriers maintain claims-handling manuals, which in states like Florida are required by law and subject to regulator review. Within those manuals are authority matrices that assign specific thresholds to field adjusters, desk adjusters, supervisors, and directors.
In delegated claims agreements, such as those used in the Lloyd’s market, managing agents limit third-party administrators to claims up to a certain amount and require referrals above that threshold. Modern claims systems like Guidewire or Origami Risk also enforce these limits by configuring payment permissions according to an adjuster’s role. Auditors often verify whether payments were approved within the correct authority level.
Why It Matters for Policyholders
When negotiating a claim, it is critical to know whether the person across the table actually has the power to say “yes.” Too often, policyholders and even public adjusters end up debating estimates with someone who is contractually unable to authorize a final check. This leads to delay, frustration, and the perception that the adjuster refuses to move, when in reality the adjuster’s hands are tied by internal limits.
How to Identify Who Holds the Real Authority
One way to move a claim forward is to ask directly and politely what level of authority the adjuster has. If the damages clearly exceed that level, request escalation to a supervisor or manager early. Repeated statements such as “I need to check with my manager” are a sign that the person you are speaking with does not have final decision-making authority.
During litigation, attorneys can also request manuals, authority matrices, or delegated claims agreements to uncover the actual thresholds and decision makers. Payment patterns themselves can also provide clues. When small checks for temporary repairs are approved quickly but larger repair or replacement payments stall, it often signals that an authority ceiling has been reached.
The Takeaway
The person you see in the field may be the insurer’s eyes and ears, but they are rarely the true decision-maker for settlements. Understanding the limits of adjuster authority allows policyholders and their advocates to direct negotiations to the right level, reduce delays, and hold accountable those who actually control payment decisions. In every claim, knowing who has the real checkbook can make the difference between months of frustration and a fair, timely settlement.
The fact that insurance companies no longer provide even experienced field property claims adjusters with much authority for payment is one reason why there exists disillusionment among many property claims adjusters, as noted in The Critical Role of Insurance Adjusters and the Growing Disenchantment in the Industry.
Thought For The Day
“Trust is the glue of life. It’s the most essential ingredient in effective communication. It’s the foundational principle that holds all relationships.”
—Stephen Covey
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