If you make a claim on your home insurance, they may send a loss adjuster to establish the facts about the claim.
We explain all you need to know about loss adjusters and how they operate to help you ensure you're covered for any large claims.
What is a loss adjuster?
A loss adjuster or public loss adjuster is an insurance industry expert. They specialise in investigating and assessing the cause of a claim and the costs involved.
Home insurance claims can be complicated. It’s often less obvious to gauge the likely cost than, say, that of a car that’s been written off.
Damage to your home could be more or less severe than it first appears, and the cost of repairs can vary. For example, damage caused by a burst pipe could be far more serious if the electrics are compromised.
Loss adjusters help your insurer evaluate the situation and thoroughly assess the damage.
They're typically only sent out to investigate large insurance claims, such as damage from a major storm or flood.
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What does a loss adjuster do?
A loss adjuster is an impartial investigator who examines what’s happened to cause you to make a claim.
They should assess any damage and, if your home insurance is valid, provide an estimate of the costs involved in fixing it.
This ensures you're claiming the right amount for the damage caused.
Although they work for your home insurance provider, it's not their job to reduce the value of your claim. Depending on the situation, the loss adjuster may even determine you're claiming too little and recommend increasing the value of your payout.
Loss adjusters only assess claims that are covered by your home insurance policy. Anything outside of this isn’t considered.
What does a loss adjuster look for?
When they visit your home, a loss adjuster looks for:
The cause of the incident
Whether the damage is covered by your home insurance policy
The value of loss or damage
Whether you've met your policy's terms and conditions
Whether the amount you're claiming for is reasonable and correct
Loss adjusters often take photographs of any visible damage they see. This should act as evidence for their report.
Once they’ve identified the cause of the claim and calculated the cost of repairs, a loss adjuster then assesses the amount you’ve claimed for. This is to ensure it matches their conclusion.
When the loss adjuster has completed their survey, they write up a report that’s submitted to your insurer. You should also get a copy.
How can conflict with loss adjusters arise?
One of the most common reasons insurers call on the services of a loss adjuster is when they suspect a case of underinsurance.
This is where the amount you’re insured for isn’t enough to cover the cost of repairs, meaning you’d be responsible for the difference.
Underinsuring can happen because you’ve genuinely underestimated the value of the property and belongings you’re looking to insure. In doing so, you might have paid less for your home insurance than you should.
For example, if your home is insured for £250,000, but its actual value is double this, you could be underinsured by 50%. If your home suffers £100,000 of damage, the insurer might only cover half this sum.
Are loss adjusters impartial?
Although loss adjusters work for insurance companies, their job isn't to minimise your claim or save your insurer money.
They’re professionals with their own codes of conduct. Loss adjusters must also adhere to the rules set by the Financial Conduct Authority (FCA), meaning they must be impartial in their decisions.
Loss adjusters are governed by 3 organisations:
- The Association of British Insurers
- The General Insurance Standards Council
- The Chartered Association of Loss Adjusters
Whilst they must be impartial, the loss adjuster’s job is to establish how the incident that led to the claim occurred. This might involve asking you some potentially uncomfortable questions. This is because they’re required to rule out instances of fraud.
It's an unfortunate fact that not everyone who underestimates the value of their property does so unintentionally.
How can I help the loss adjuster speed up the process?
The loss adjuster needs as much information from you as possible. It's helpful to provide this before their visit.
Find any receipts for items you’ve included in the claim and be honest and open with them when they ask questions.
If they need more information that you don’t have readily available, make a note or ask them to email you further questions.
If possible, don’t clean any mess caused by the incident or throw away anything that was affected. But, if you must get rid of damaged items, such as spoiled food from a broken fridge or freezer, take photos of the items first.
If emergency work needs to be done, such as replacing broken windows or doors, inform your home insurance company upfront. In this case, take photos of the damage beforehand and keep the receipts for the work done.
What if I'm unhappy with the loss adjuster's work?
It’s not unheard of for the settlement figure to be lower than expected.
If this is the case, you can complain to the insurer so they can review the claim and supporting assessment.
Should you still be unsatisfied, you can call in an insurance loss assessor. They can carry out an inspection on your behalf and further investigate the claim.
What’s the difference between a loss adjuster and a loss assessor?
Unlike a loss adjuster, a loss assessor represents you rather than the insurer.
They can negotiate on your behalf and deal with all the paperwork involved. Being insurance experts, they’re well-educated in claims-related arguments.
Loss assessors can also organise alternative accommodation if your home is uninhabitable. They can ensure your property is secure following a break-in or after fire damage to help ease your worry while you're out of your home.
For all of these reasons, it’s best to consider hiring a loss assessor as soon as you suspect there could be conflict over the settlement figure.
Can I hire a loss assessor?
Every home insurance customer has a legal right to challenge a loss adjuster’s conclusion by hiring a loss assessor. Don’t be concerned that this course of action might upset the insurer or the loss adjuster.
You can contact a loss assessor through their trade body, the Institute of Public Loss Assessors.
If you get a recommendation from a friend or colleague, ensure the loss assessor is authorised by the FCA by searching the Financial Services Register.
How does a loss assessor get paid?
Loss assessors often charge a percentage of the final settlement - typically around 10%.
But some loss assessors might not charge for their time if you use a recommended company to undertake the required repairs.
In this case, the loss assessor usually gets a commission from the chosen firm.
Can I hire a loss adjuster instead?
Although they’re more commonly used by insurers, it’s possible to hire another loss adjuster to oversee your claim.
Conducting the investigation and producing the report involves more work than that required of a loss assessor. This means it can cost more to employ a loss adjuster than a loss assessor.
Typically, loss adjusters charge an hourly rate or work for a percentage of the settlement figure, depending on the scale and nature of the claim.
It’s also possible to buy insurance to cover the cost of a loss adjuster’s fees. But you need to speak to your insurer beforehand to check if your policy covers this.
Can a loss adjuster’s decision result in my claim being rejected?
A loss adjuster's decision may result in your claim being rejected if they determine:
- You don't have the correct level of home insurance cover
- You're withholding information
- The damage is a result of natural wear and tear
- You haven't met the terms and conditions of the policy
Whether a loss adjuster has the final decision on the claim’s status depends on the arrangement they have with your insurer.
In some cases, the home insurance company immediately accepts the loss adjuster’s report. In others, it’s treated as a recommendation and is considered alongside their own expert’s conclusions.
How to appeal a loss adjuster’s decision
If the insurer says they’re rejecting your claim following the loss adjuster’s report, you have the right to appeal.
You can do this whether or not you’ve used a loss assessor.
You need to prepare and present your reasons for believing the loss adjuster and insurer were incorrect or acted unfairly. Be as accurate as possible and include a precise timeline from the incident that prompted the claim up to the decision to reject it.
Should your appeal fail and you’re still not satisfied with the insurer’s reasoning, you can take the matter to the Financial Ombudsman Service. You need to do this within 6 months of the insurer’s final decision.
The Ombudsman should evaluate both sides of the case and issue an outcome based on their independent investigations. This decision is then binding on the insurer.