The People who Keep the Promises Made by an Insurance Policy

Insurance Claims Personnel

The Claims Adjuster

The claims adjuster is the contact between the insured and the insurer. He or she can be an employee of the insurer or an independent contractor retained by the insurer to investigate and adjust insurance claims on its behalf.  The adjuster is person charged with investigating a claim to fulfill the promises made by the policy of insurance and establish whether the company is liable to the insured or a claimant and to what extent. The investigation can include interviews of the parties involved, property inspections, and reviewing hospital records or police reports.

Once the adjuster is assigned to deal with a first party property claim the adjuster must explain to the insured:

    • the coverages available to the insured under the policy;
    • the duties of the insured after a loss:
      • to protect the property from further loss;
      • if a crime has occurred, to report the loss to the appropriate police agency;
      • to present documents that support the amount of the loss;
      • to provide assistance and cooperation to the insurer so it can complete its investigation;
      • to appear and testify at examination under oath if the insurer requires; and
      • to present proof to the insurer about the extent of the loss in a sworn document; and
      • that the property belongs to the insured and that the insurer can only indemnify, that is, pay money to the insured to replace the property loss, but cannot repair or replace the property for the insured.

The adjuster will also investigate the loss on behalf of the insurer, review the policy wording to establish that the loss was due to a peril or risk of loss insured against, and investigate to determine if some third person is responsible for the loss who can contribute or pay all of the loss directly to the insured.

The adjuster usually has a great deal of experience responding to damage caused by fire, lightning, windstorm, hail, flood, earthquake, and other destructive events. If asked, the claims adjuster will recommend to the insured various reconstruction contractors, salvors, inventory specialists, accountants, or other professionals to assist the insured to prepare the evidence necessary to prove his or her loss and file a claim that will be accepted by the insurer.

The claims adjuster is empowered by the insurer to negotiate a settlement with the insured. He or she will “adjust” the loss, since values are often subjective and difficult to establish, to a dollar figure that is agreeable to both the insurer and the insured. Adjusters are often provided with authority to resolve claims up to a certain dollar amount without gaining permission from insurer management. Losses in excess of the authority must be approved by insurer management.

After an agreement is reached with the insured and the insurer, the claims adjuster will also assist the insured in preparing the necessary closing documents.

Once the adjuster is assigned to deal with a third party liability claim the adjuster must explain to the insured:

  • the coverages available to the insured under the policy;
  • the duties of the insured after a loss:
    • to cooperate with the investigation of the insurer.
    • to provide all information available to the insured including a detailed recorded statement.
    • to provide sworn testimony at deposition if required to defend any suit against the insured.
    • to attend trial, participate and assist counsel in the defense of any suit against the insured.

The Claims Investigator

Although a small part of the work of the claim adjuster is to investigate, the adjuster does many more things. Insurance companies now retain the services—either by employing them directly or by use of independent contractors—of investigators whose expertise relates exclusively to insurance claims. The experienced claims investigator is usually a part of, or vendor to, a Special Investigative Unit (SIU) set up to protect the insurer and mandated by most states as a means to reduce the amount of fraud perpetrated against insurers.

The fact that an insured is contacted by a claim investigator does not, however, mean that the insured is suspected of committing fraud. By virtue of his or her training and experience, the claim investigator is more skilled than the claim adjuster in discerning facts and evidence that can be used in a court of law if a fraud has been attempted.

When a third party is making claims against the insured the claim investigator will seek the assistance of the insured to determine whether the insured is liable to the claimant for injuries claimed and if not, the defenses available. The claim investigator is also required to conduct a thorough investigation to determine if the third person is attempting fraud.

The claims investigator will also contact independent witnesses and work with the police authorities to see to it that the value of the claim is accurately determined and to gather sufficient information to make certain that an attempted fraudulent claim is defeated.

Although the majority of suspected fraud cases claim investigators work on are perpetrated by third parties, they also handle fraudulent claims perpetrated by insureds.

The Claims Supervisor or Claims Manager

The insured presenting an average claim will resolve it with the claims adjuster who first contacts the insured after the report of the loss, usually within 40 days of presentation or report of the claim.

The insurance company claims department is set up with a hierarchy based upon the complexity and value of losses. The claims adjuster’s authority is limited, whether he or she is an employee of the insurer or a contractor. The claims supervisor has more authority to resolve claims than the adjuster and will be consulted by the claims adjuster if the loss exceeds the adjuster’s authority. The supervisor controls the work of several adjusters, drawing on his or her greater experience, education, and training.

The claims manager supervises several claims supervisors and all of the adjusters supervised by the various supervisors. He or she has the maximum authority in the office to resolve insurance claims.

In large insurance companies there are several other layers of supervision at regional and home office levels. The insured must be aware that his or her adjuster must obtain clearance to resolve the claim through the multiple levels of authority. The time needed to resolve the claim will be extended as each level of authority reports to the next.

The prudent claims adjuster advises the insured at the first meeting as to how complex the process will be, so that the delays inherent in a hierarchical business structure will not come as a surprise to the insured.

Claims Counsel

The insured may meet with an attorney representing the insurer under two circumstances:

  1. If the insured has been sued by a third person the insurer will retain counsel to defend the insured at the insurer’s expense. Counsel will meet with the insured and work to present the most effective defense to the suit. Insureds most often meet with claims counsel in a situation where the insured is in an automobile accident and a third party sues him or her for injuries incurred in the accident.
  2. If there is a problem with coverage or with the extent of the claim, if the insured retains counsel to present his or her claim, or if fraud is suspected, the insurer will retain counsel to protect its interests. Attorneys who represent insurers in such situations are often referred to as “Coverage Counsel.” Coverage Counsel will usually deal with the insured’s personal attorney.

The insured may meet with Coverage Counsel if an examination under oath is demanded by the insurer to resolve coverage issues found in the investigation of a first party property claim. In that case the insured must, as a condition of the insurance, appear before claims counsel and give sworn testimony.

The insurance Examination Under Oath (“EUO”) is a formal type of interview authorized by an insurance contract. It is taken under the authority provided by a condition of the insurance contract that compels the insured to appear and give sworn  testimony on the demand of the insurer or find his, her or it claim rejected for breach of a condition. A notary and a certified shorthand reporter are always present to give the oath to the person interviewed and record the entire conversation.

The EUO is a tool used sparingly by insurers in the United States when a thorough claims investigation raises questions about the application of the coverage to the facts of the loss, the potentiality that a fraud is being attempted, or to assist the insured in the obligation to prove to the insurer the cause and amount of loss. Although rarely used the EUO is an important tool needed by insurers when there is a question of coverage.

The adjuster, the independent adjuster, the Special Investigation Unit (“SIU”) investigator, the independent insurance adjuster and, in complex cases, the attorney retained to represent the insurer questions the person interviewed in a manner similar to a deposition in a legal proceeding. Because of the formality of the proceeding — it includes an oath, and the presence of a certified shorthand reporter — the task of establishing rapport with the person interviewed so that relevant information may be obtained from the insured is more difficult than in an informal interview. Unlike legal proceedings where questions are limited to those seeking a “yes” or “no” or brief answer the EUO seeks narrative responses from the person questioned.

Often, however, the purpose of the EUO is not to stop fraud but to allow an insured the opportunity to prove his or her claim of loss in cases where evidence has been destroyed by a casualty or is otherwise unavailable.

The authority to take an EUO is provided by the insurance contract and exists, as a result of statutes, establishing a state mandated fire insurance policy that must be incorporated in every policy in the state that insures against the peril of fire. For example, the New York Standard Fire Policy provides as follows:

“The insured, as often as may be reasonably required, shall exhibit to any person designated by this company all that remains of any property herein described and submit to EUO by any person named by this company, and subscribe the same; and as often as may be reasonably required, shall produce for examination and copying all books of account, bills, invoices, and other vouchers.”

This volume covers:


Adapted from my book “Zalma on Insurance Volume 101 – Second Edition” Available as a paperback  and Available as a Kindle Book 

All of Barry Zalma’s books are describe at

© 2019 – Barry Zalma

This article, and all of the blog posts on this site, digest and summarize cases published by courts of the various states and the United States.  The court decisions have been modified from the actual language of the court decisions, were condensed for ease of reading, and convey the opinions of the author regarding each case.

Barry Zalma, Esq., CFE, now limits his practice to service as an insurance consultant  specializing in insurance coverage, insurance claims handling, insurance bad faith and insurance fraud almost equally for insurers and policyholders. He also serves as an arbitrator or mediator for insurance related disputes. He practiced law in California for more than 44 years as an insurance coverage and claims handling lawyer and more than 50 years in the insurance business. He is available at and

Mr. Zalma is the first recipient of the first annual Claims Magazine/ACE Legend Award.

Over the last 51 years Barry Zalma has dedicated his life to insurance, insurance claims and the need to defeat insurance fraud. He has created the following library of books and other materials to make it possible for insurers and their claims staff to become insurance claims professionals.

Excellence in Claims Handling Courses From

The Excellence In Claims Handling program provides everything a person or entity presenting a claim needs to effectively present the claim and provides the insurance claims person with everything he or she needs to properly represent the insurer.

The insured, risk manager, or corporate counsel will be able to present a first party property claim – whether a fire, theft, or windstorm or some other insured against cause – with little difficulty and professionalism and present a sworn proof of loss acceptable to an insurer.

The insurance claims person completing the course will be able conduct a thorough investigation of the policy and claim. The insurance claims person will also be able to assist an insured to fulfill all of the promises made by the insured to the insurer and the insurer to provide the indemnity promised by the insurance policy.

The series of courses was designed so that the student can obtain the needed information easily while he or she sits down in the morning for a first cup of coffee or any other time in the day in short, easy to consume lessons. For instance “Insurance and Claims” is made up of three modules and 27 lectures while “Investigating the Property Claim” is made up of four modules and 65 lectures. You can review each course, each module and each lecture at the links below.

Each person completing the course will be able to claim that he or she is a professional first party property claims person ready to provide excellence in claims handling and be ready to resolve any claims problem that arises for the benefit of the insurer and the policy holder.

Insurance and Claims:

Investigating the Property Claims:

Insurance Law:

Solving Claims Problems:

About Barry Zalma

An insurance coverage and claims handling author, consultant and expert witness with more than 48 years of practical and court room experience.
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