What Does a Liability Adjuster Do?

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  • Written By: Terry Masters
  • Edited By: Shereen Skola
  • Last Modified Date: 03 December 2019
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A liability adjuster works for an insurance company; when an insured party or third-party beneficiary makes an insurance claim under a policy, the liability adjuster investigates. He or she works to determine whether the circumstances fall under the terms of the policy. If the insurance company decides to deny the claim or must try to recoup a policy payout from another responsible party, the liability adjuster acts as the company's representative in legal actions.

Insurance companies are in the business of managing risk. They profit when people take out policies and pay the premiums but never need the insurance company to pay out on a claim. Conversely, every time an insurance company has to pay out on a claim, they lose the investment gamble and their profits suffer. A liability adjuster is an insurance company's investigative agent in the field. He is the person who ensures that the company only has to pay legitimate claims that fall under the exact terms of the policy.


An insurance policy is a contract between a company and the person paying the premiums. Insurance is a calculated gamble, so the terms of the policy are extremely important to protect the company's profitability. Insurance companies will only pay a claim if it falls under the terms of the contract. There is always a period of time between when an insured party makes a claim and the company accepts or denies the claim. The liability adjuster manages that time period and decides whether the company should pay.

When a person calls his insurance company to make a claim, a liability adjuster is assigned to the case. The adjuster investigates the claim by collecting information from the insured party and, sometimes, visiting the site of the loss. He establishes an investigation file and includes everything he learns about the case in it. Some people attempt to defraud insurance companies by lying about the details of an accident or other loss incident; adjusters attempt to figure out whether a claim is bogus or legitimate.

Not only does a liability adjuster determine if the insured party's account of the loss is accurate, he must also determine if the loss is covered. An adjuster must be an expert in the types of insurance coverages that are in use in his area of work. For example, if he typically works on homeowners insurance policy claims, he must know the legal parameters of the coverages that are ordinarily included in those types of policies.

Once the liability adjuster determines whether a claim should be paid or denied, he must do what is necessary to close the case. That can include authorizing a check or defending his decision to deny the claim on behalf of the company in a mediation, arbitration or court trial. The adjuster is also responsible for pursuing reimbursements from responsible individuals or their insurance companies.


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