How to Become an Insurance Adjuster in Each State

Not many kids think to themselves, "I want to be a claims adjuster when I grow up." For a certain type of adult, though, it can be a pretty sweet gig.

It pays well, it's recession-proof, and unlike most lucrative jobs these days, you don't need a college degree to enter the field.

What is an Insurance Claims Adjuster?

An insurance claims adjuster investigates insurance claims to determine the liability in an individual case. In other words, they look for signs of fraud, and when the claim is legitimate, they decide on a fair and appropriate settlement amount.

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).

Within each line, there are many opportunities for specialization.

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 IA firms are often called in by insurance companies 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 big bucks 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, with the goal of getting that individual or business the highest possible settlement. Public adjusters typically 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 $70,650/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 To Become A Claims Adjuster

The process for becoming a claims adjuster depends on where you live and the type of work you want to do, but the general path goes like this.

Meet Insurance Adjuster Schooling Minimums

To become an entry-level insurance claims adjuster, you need to earn either 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. Do a little research into what will be expected for your specialty, if you have your heart set on one.

Complete Claims Adjuster Training

State licensing requirements vary, so you'll need to look at the current laws in your home state. Even if your state doesn't require a license, you probably need to apply for one elsewhere – more on this later.

Typically, the first step to becoming an insurance adjuster in any state is insurance adjuster training. You'll need to complete state-specific pre-licensing education, which typically takes 40 hours. In most cases, you'll take the education and exam specific to a particular insurance line, but some states have an "all-lines" license that allows you to process claims of any kind. Since you're covering more ground, all-lines coursework takes more time.

Some states have specific requirements for pre-license coursework including minimum hours and approved providers. Most of these allow you to complete insurance adjuster training in a classroom or online, but some require classroom-only. In either case, make sure you sign up with a course provider who's approved by the relevant state agency.

In states that only require an exam and not the coursework, pre-licensing courses are still a good idea so you're ready to pass the exam on the first try.

 

 

Pass Your State Insurance Adjuster's Licensing Exam

Most states require you to pass an exam that covers the same topics as your pre-licensing coursework. It's a good idea to find out how often these tests are offered in your home state so you can time your coursework appropriately.

Additionally, your state may have other requirements or restrictions you have to meet before you're qualified.

Apply for Your Adjuster's License and Any Reciprocal Licenses

After you pass the state exam and meet all qualifications, you'll need to put together a license application and submit the required fees. Most states require you to get fingerprinted and undergo a background check.

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 make sure you do your homework.

The good news is that reciprocal licenses are usually easy to earn. You probably won't need to take another test, just submit the application with proof of your home state license and pay a fee. A few states put up additional hoops, however.

Insurance Claims Adjuster Licensing By State

States either have their own insurance adjuster licensing process, or they don't. This affects where and how you get licensed.

Licensing States

Most states (34 out of 50) issue their own licenses for claims adjusters.

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. Most states honor reciprocity with at least a few other states.

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.

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

If you live in a non-licensing state, you still need to earn a license. Since most adjusters work in multiple states and most states require a license, most adjusting positions – regardless of type – require you to be licensed.

Residents of any of the jurisdictions named above can obtain a nonresident Designated Home State (DHS) license. Essentially, you just pick which state will be your "home," then apply from there.

What Insurance Adjuster Course Should I Take?

If you're eligible for a nonresident DHS license, you may be wondering what's the "best" state to pick.

We recommend earning a Texas adjuster's license. It allows online pre-license training, and it's a large, populous state along the Gulf Coast, which means it has a large claims volume by itself.

It also has reciprocal license agreements with 28 states, including:

• 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 that is approved to replace Texas's state exam. Just take the course and pass the final, then 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.

Start your new career today as a claims adjuster – register now!