How to Become an Insurance Adjuster in Each State
While becoming an insurance claims adjuster may not be the first career choice for many people, it can be a lucrative and secure career option.
WHAT IS AN INSURANCE CLAIMS ADJUSTER?
An insurance claims adjuster investigates insurance claims and determines liability, deciding on fair and appropriate settlements, and specializing in different types of insurance.
Claims adjusters often specialize in a type of insurance, called a "line" (short for a line of authority). The major insurance lines are:
- Health & Disability
- Life
- Property
- Casualty
Health and Life are often grouped together for licensing purposes, as are Property & Casualty. Property & Casualty can be further split into personal lines (individual or family coverage) or commercial lines (business coverage).
WHERE DO CLAIMS ADJUSTERS WORK?
There are a few types of insurance adjusters by role.
Staff adjusters work as full-time, year-round employees for an insurance company. They pull in a salary and receive benefits. These days, most staff adjusters work in auto insurance, but each line needs staff adjusters to handle its everyday claims.
There are also independent adjusters. These aren't usually true freelancers but employees of an independent adjuster (IA) firm that operates as a third-party administrator (TPA). However, independent adjusters don't pull in a salary. They get paid more like freelancers based on expenses, claims volume, and type.
This makes sense because insurance companies often call IA firms for catastrophic claims, like natural disasters, when the case volume is higher than staff adjusters can handle. This means the amount of work and the flow of income can be flood and famine – long days and financial rewardsnbbn under trying conditions, followed by free time and little income between disasters.
Finally, there are public insurance adjusters. Public adjusters work for policyholders instead of insurers to get that individual or business the highest possible settlement. Public adjusters earn a percentage of the settlement amount, typically 5 to 15%.
According to the U.S. Bureau of Labor Services, the mean annual wage of insurance adjusters is $73,380/year, but there's a lot of variation. The top 10% make over $100k, while the bottom 10% make less than $40k.
The typical salary range of staff adjusters is $40-70,000. Independent and public adjusters explain the wide gap between the highest and lowest paid. Those types of adjuster jobs are high risk, high (or low) reward.
HOW DO YOU BECOME A CLAIMS ADJUSTER?
To become an insurance adjuster, you need to meet certain requirements, which may vary based on the state and the type of work you want to do. Generally, you need a high school diploma or GED, complete insurance adjuster training, and pass the State Insurance Adjuster's Licensing Exam.
MEET INSURANCE ADJUSTER SCHOOLING MINIMUMS
To become an entry-level insurance claims adjuster, you need to earn your high school diploma or its equivalent, like a GED. Some employers or specialties might prefer candidates with an associate’s or bachelor’s degree. That's one of the reasons to have some idea of what kind of adjuster you hope to become before you begin your journey.
COMPLETE CLAIMS ADJUSTER TRAINING
Requirements vary, so you need to look up your jurisdiction's current requirements with the appropriate regulatory agency. Typically, states require pre-licensing coursework and a state exam, a background check, an application, and processing fees.
The pre-licensing education usually requires 40 hours of coursework, and in some cases, there are specific requirements for the coursework providers. After completing the education and passing the exam, you can apply for your adjuster's license and pay the required fees. Additionally, you may need to undergo a background check and get fingerprinted.
APPLY FOR YOUR ADJUSTER'S LICENSE AND ANY RECIPROCAL LICENSES
Once your first state license is approved, you'll probably want to apply for reciprocal licenses in other states where you'd like to work. The average adjuster holds licenses in 10-12 states. Multi-state licensing is especially critical if you want to work as a catastrophic insurance adjuster.
Most employers favor people with licenses in the Gulf Coast states or the east coast because that's where most claims happen. The "best states" vary a little by specialty, so do your homework.
The good news is that reciprocal licenses are usually easy to earn. You probably won't need to take another test, submit the application with proof of your home state license and pay a fee. A few states put up additional hoops, however.
DOES GETTING YOUR INSURANCE CLAIMS ADJUSTER LICENSE VARY BY STATE?
Yes. Some states have their own insurance adjuster licensing process. This affects where and how you get licensed.
LICENSING STATES
Most states (34 out of 50) issue their own licenses for claims adjusters.
Some states are more difficult than others. New York and California are notorious due to two rules. First, neither state offers reciprocity (along with Hawaii), so if you want to process claims in those states, you need to complete all their requirements. Secondly, both New York and California (along with New Mexico) require adjusters to get bonded.
These two obstacles combined mean that few nonresidents hold California or New York adjuster's licenses, but if you make the effort, they can be valuable.
It's worth noting that reciprocity agreements can change over time, so it's always best to check with the individual state's insurance department for the most up-to-date information.
NON-LICENSING STATES
There are 17 jurisdictions that don't issue their own license:
- The District of Columbia
- Colorado
- Illinois
- Iowa
- Kansas
- Maryland
- Massachusetts
- Missouri
- Nebraska
- New Jersey
- North Dakota
- Ohio
- Pennsylvania
- South Dakota
- Tennessee
- Virginia
- Wisconsin
You still need to earn a license if you live in a non-licensing state. Since most adjusters work in multiple states and most require a license, most adjusting positions require you to be licensed regardless of type.
Residents of any above jurisdictions can obtain a nonresident Designated Home State (DHS) license. You pick which state will be your "home" and then apply from there.
WHAT INSURANCE ADJUSTER COURSE SHOULD I TAKE?
If you're eligible for a nonresident DHS license, earning a Texas adjuster's license makes the most sense. It allows online pre-license training, and it's a large, populous state along the Gulf Coast, meaning it has a large claims volume. It also has reciprocal license agreements with 28 states.
States with Texas adjuster’s license reciprocity:
- Alaska
- Arizona
- Arkansas
- Connecticut
- Delaware
- Florida
- Georgia
- Idaho
- Indiana
- Kentucky
- Louisiana
- Maine
- Michigan
- Minnesota
- Mississippi
- Montana
- Nevada
- New Hampshire
- New Mexico
- North Carolina
- Oklahoma
- Oregon
- Rhode Island
- South Carolina
- Utah
- Vermont
- Washington
- Wyoming
Our online Texas adjuster's pre-license course has a final approved to replace Texas's state exam. Just take the course, pass the final, and apply for your Texas adjuster's license. Our Ultimate Success package even comes with tutoring access and exam remediation support if you don't pass on your first attempt.
IMPORTANT SKILLS TO BE SUCCESSFUL AS AN INSURANCE ADJUSTERS
Networking is another important aspect of becoming an insurance adjuster. Joining professional associations and attending industry events can help you make connections with other professionals in the field and potentially lead to job opportunities. Additionally, staying up-to-date on industry news and trends can help you stay ahead of the game and make informed decisions.
In addition, having strong communication skills and attention to detail is essential in this line of work. As an insurance adjuster, you will be interacting with a wide range of people, from policyholders to attorneys, and you must be able to effectively communicate complex information. Additionally, you must be able to thoroughly investigate claims and document your findings in a clear and concise manner.
In summary, becoming an insurance adjuster requires completing the necessary training and licensing requirements in your state, gaining experience in the industry, networking, and having strong communication and attention to detail skills. With dedication and hard work, you can build a successful career as an insurance adjuster.
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