Insurance Loss Adjusters- How are they Paid?

[Watty100]

Without getting too specific, so as not to prejudice any legal action I may have to take in the future, I'm curious as to how the loss adjusters appointed by insurance companies to handle claims are paid?

Is it a flat fee, a percentage of the claim as a whole, a percentage of how much they can save by beating you down, or something completely different.

The tale is that I made a household claim for damage a year ago, it was accepted, loss adjusters appointed, who in turn appointed contractors but the damage is still not repaired.
The loss adjusters made a derisory offer to settle for cash, no more than 40% of its estimated value, since then the contractors failed to show on the agreed date, don't return calls, won't book a new date for the work to start, leaving me with the growing impression that between them they are trying to force me into accepting a low cash offer and will pocket the difference between them.

Any inside knowledge out there?

 

[theoneandonly]

go back to your insurance company.

 

[stever1]

I imagine there’ll be am ombudsman you could contact.

 

[Wapping]

Assuming there isn’t some other part of the story….

Contact your insurer to whom you made the claim and who, presumably, agreed to the settlement.

Your contract of indemnity (ie your insurance policy) is with your insurer, not with the loss adjuster or the builder, who didn’t turn up.

PS To answer your opening question, as to how loss adjusters are paid and by whom:

Who pays the loss adjuster?

The Loss Adjuster's fee is paid by the insurance company. Their fees are paid as part of the insurance claim.

=======

For a simple made-up example:

Water damage claim £500

Policy excess £50

Net claim £450 to put right the damage

The insurer pays you (the insured) £450

The insurer pays the loss adjuster separately, £10 for carrying out the adjustment role.

You receive your full amount £450 and the loss adjuster their £10. It is a very simple system and, more often than not, works for the tens or hundreds of thousands of household and motor claims, totalling into the millions of pounds each year.

The amount of the loss adjusters’ fees will vary. But, for the vast majority of simple household and motor claims, the insurer will probably have a basic scale of fees, agreed between them (the insurer) and the loss adjuster. Whilst it’s not impossible to have the adjuster’s fee expressed as a percentage (say 10% by way of illustration only) of the claim, it would serve neither party too well. For example, if the loss adjuster came in with a low settlement number, the loss adjuster would receive less (10% of £100 is less than 10% of £150). The reverse side of the coin would be the same: If the loss adjuster inflated the settlement figure artificially (10% of £200 is more than 10% of £150 or £100) then the insurer would suffer.

 

[Wapping]

I imagine there’ll be am ombudsman you could contact.

The ombudsman should only be contacted after the insured person has exhausted his insurer’s complaints procedures and then, only if the insured person is unhappy with the outcome.

The process will be set out (in not particularly small print) in the documents which the insured will have received, either when he took out the policy and / or when he submitted the claim.

 

[Watty100]

Thank you @Wapping , I was curious as to whether the loss adjusters could benefit by coercing me to accept a low offer.

And yes, there is much more to this story, but this question was prompted by a message from the contractors amounting to a huge change to what work was agreed, hence my feeling that someone is trying to rip me off. Just need to figure out who and how.

And another yes, I am dealing directly with the insurer as well but their assurances to closely monitor the situation are somewhat hollow.

 

[Wapping]

And yes, there is much more to this story…..

There usually is.

 

[wessie]

Thank you @Wapping , I was curious as to whether the loss adjusters could benefit by coercing me to accept a low offer.

And yes, there is much more to this story, but this question was prompted by a message from the contractors amounting to a huge change to what work was agreed, hence my feeling that someone is trying to rip me off. Just need to figure out who and how.

And another yes, I am dealing directly with the insurer as well but their assurances to closely monitor the situation are somewhat hollow.

as Wapping states, raise a formal complaint with the underwriter (not the broker) about the delay. They will have a defined process which is likely to have set timescales to get resolution before the regulator could be involved.

 

[Wapping]

There seems to be a lot missing in the story.

In the opening post it says:

……made a household claim for damage a year ago, it was accepted, loss adjusters appointed, who in turn appointed contractors but the damage is still not repaired.
The loss adjusters made a derisory offer to settle for cash, no more than 40% of its estimated value, since then the contractors failed to show on the agreed date, don't return calls, won't book a new date for the work to start

Which reads that nothing has happened for a year.

But the subsequent post says something a bit different….

….but this question was prompted by a message from the contractors amounting to a huge change to what work was agreed, hence my feeling that someone is trying to rip me off.

Quite what has been going on over the past 365 days, who said what to whom, why and when is shrouded in mystery, as is the reasons why the work didn’t start reasonably soon after the claim was first lodged. Nor is it at all clear as to whether we are looking at a claim of a few hundred, several thousands or a couple of million. It’s not even clear if the OP even got as far as agreeing a contract price with the builder. We might though assume that he did eventually agree terms, as he says, that the builder simply didn’t turn up to commence the work. This at least implies that work of some sort was due to commence, but didn’t.

It’s not even too clear who the OP‘s gripe is with. Is it his insurer (they hardly get a mention). The builder? The loss adjuster? Some combiation of all three? Someone or something else?

There is usually two sides (or more) to every story. Maybe, the builder is just feeling like he has had enough? Who knows?

 

[Watty100]

I'm holding back with full details because, as I said originally, this may go legal. It is irrelevant to the question I asked.

I wanted a specific bit of information regarding loss adjusters and how they are paid, I have that information now.

As much as Wapping would love to think everyone in the insurance industry smells of roses, and everyone who tries to make a claim is a potential fraudster, that isn't the case here and the insurance industry is not looking good in this case.

And if Wapping would like me redress the balance for his beloved profession, I have just received the insurance renewal for my GS and the robbing sods have increased the premium by.............9 pence! So congrats to Swinton

 

[Wapping]

Who suggested you are being fraudulent?

Good luck progressing your year old claim and (most particularly) getting the builder to start.