lossadjustment

Loss adjustment is the process by which a loss adjuster investigates, evaluates, and settles insurance claims to determine the insurer's liability and the amount payable. It involves examining the facts of a claim, validating policy coverage, assessing damages, and negotiating settlements to resolve claims fairly and promptly.

Participants include loss adjusters (employees or independent contractors), insurers, insured parties, and sometimes public adjusters who represent the policyholder. Other specialists such as engineers, appraisers, or repair experts may be engaged for technical assessments to determine cause, extent of damage, and appropriate valuation.

A typical workflow includes reporting the loss, opening a claim file, investigating coverage and liability, assessing damages, estimating replacement or repair costs, negotiating settlements, and paying claims. If disagreement arises, remedies may include appraisal, arbitration, or litigation. Adjusters also establish reserves to reflect expected claims costs while the file is active.

Loss adjustment types range from internal adjusters to independent adjusters and public adjusters; specialized categories include catastrophe (cat) adjusters handling large-scale events, auto, property, or liability claims. Some adjusters focus on first-party claims (insured's losses) while others handle third-party claims (claims asserted against the insured).

Industry practices emphasize regulatory compliance, fair dealing, timely processing, and accuracy in damage valuation. Standards may be set by insurers, professional associations, or local regulators. Subrogation and salvage operations may recover costs from responsible third parties, reducing net loss to the insurer and supporting overall claim resolution.