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Inexpensive Home Business Ideas: Independent Insurance Adjuster

Updated on January 27, 2011

So you have been thinking about starting you own business. Working for yourself is still the dream of many Americans, and the American dream is definitely alive and well. That being said, as your own boss you only have yourself to blame when things don't go according to plan.

Independent insurance adjusting is a relatively low start-up cost business. For under $5,000, you can equip yourself with the basic tools, office supplies, and software to be an entrepreneur in an industry that always needs skilled people to handle claims. Adjusters come from many backgrounds. While most "staff adjusters" (adjusters who work as employees for insurance carriers) are required to have a college degree, independent adjusters are not typically required to have a degree as a condition or work. Some of the best adjusters come from a background in the building trades and/or auto repair industry. But without specific knowledge or experience in these fields, you may find you need training. That being said, these skills can be learned at various schools such as the US Career Institute. See additional information online at Learning coverage, or how to interpret a policy, is perhaps a bit easier, but it too has it challenges - things are rarely cut and dried in the world of insurance claims. Thankfully, independent adjusters typically aren't responsible for making the ultimate decision on coverage - that is a task left to the actual insurance company.

So let's assume you have the background and/or training - you are familiar with building construction and you know your way around a body shop. What next? Many independent adjusters find themselves freelancing for larger, established adjusting firms. Effectively you are a subcontractor of a subcontractor. Before you shrug this idea off, think about the advantages of this situation. An established independent adjusting firm already has a customer base so you aren't required to scare up new business. But your "cut" of the service fee your contractor charges the insurance company will be less - everyone gets their cut and as the last in the chain, yours will be the smallest. If that isn't for you, you can always market your services directly to the insurance companies. Fliers or bulletins detailing your experience, training, and fees are simple and cheap and surprisingly effective.

Now that you have some customers, what do you charge in order to remain competitive in the market and most importantly, obtain repeat business. And this isn't an easy question to answer. Cost of living, as in everything, has a lot do with rates. Independent adjusters usually have an hourly rate. In all but the most expensive markets in the county, the hourly rate is somewhere between $60 and $75 per hour. Mileage is billed at the government sanctioned rate of $.52 per mile. However, many insurance companies have their own guidelines on what an independent adjuster can charge per mile, how many miles are "free-of-charge," etc. Service invoices have been traditionally broken down in tenths of an hour. For example, you make a phone call to an insured as a process in handling the claim for your insurance customer. Phone calls are typically billed at .1 of an hour or 6 minutes. Longer phone calls, of course, are billed at greater increments. The national average for adjusting a homeowners loss with $3000 to $10,000 of damage is about $375.00. But that is only a guide - no two claims are identical; claims of greater difficulty may cost more. And it is important to note that you must establish a minimum charge. Plumbers, electricians - all service industries have a minimum charge. In property adjusting, a minimum charge is around $180.00.

Auto damage appraisals are a different story. Auto appraisals don't pay nearly as much as property appraisals. The national average fee for an auto damage appraisal is around $100.00. But if this is where your passion or your expertise lies, go for it. Autos claims often "turn" very quickly which facilitates cash flow into your business. Multi-line adjusters handle both auto and real property adjustments. But the bread and butter of the independent business is real property.

No small business can operate without basic office equipment. The following is a list of the very basics you will need to run your new operation:

1. A reliable, fuel efficient automobile is a must. Some adjusters prefers pick-up trucks, but these often don't deliver the gas mileage needed in order to keep expenses down and profits up. The Chevrolet Impala is a favorite fleet vehicle for adjusters.

2. You will need a ladder. If you are driving a standard passenger car and not a pick-up truck, you will need to buy a fold-up ladder. These ladders are 12 feet in length and will get you to most placed you need to go. Werner brand ladders are excellent and very affordable.

3. You will need a laptop computer. Any decent brand laptop with standard options and memory is sufficient. I recommend HP laptops - they are plentiful, relatively inexpensive, and reliable.

4. You will need estimating software. The industry standard for real property is Xactimate. This software is not cheap - an average package, yearly subscription will set you back $1500 to over $2000 but it is definitely worth it. Again, this has, for good or bad, become the industry standard for real property estimating.

For automobiles, an inexpensive and fairly comprehensive software in Comp-est by CCC.

5. You will need a fax machine, a scanner, and a copier. HP makes an all-in-one series, HP Officejet Pro 8500. At 32 pages per minute, it is an excellent and reliable machine. And for $280.00, you can't beat it. Most insurance companies have gone or are attempting to go "paperless." The scanning functions of this machine are second to none. Almost all documentation sent to your customer will be via email using Adobe PDF files.

6. You will need phone service, and a cell phone is an absolute must - you can't conduct this type of business without one. I suggest getting an unlimited minute plan - you will burn through the minutes with this type of work. As for standard phone service, I recommend Vonage. A dedicated fax line and voice line will run about $67.00 a month. And that is with unlimited long distance, call forwarding, etc. I just can't say enough good about Vonage service. It is incredibly affordable and reliable.

7. Don't forget your camera. Part of the claims documentation process for your customer will involve taking photos that show the damage - and these photos will be used, in many cases, by your customer in order to scrutinize the accuracy of your adjustment. My advice - take plenty of pictures. Nikon makes several high quality and reliable cameras.

In closing, I have to warn you - this is not an easy job. But it is a low start-up cost business with very little overhead. It is a business you can run out of your spare bedroom, your basement - or even a hotel room if you are away from home on business. And don't forget to call you local independent insurance agent. You will need liability coverage, enhanced auto insurance, etc. Don't skimp or forgo the insurance - it's just not worth the risk and your customers may ask to see proof of insurance before allowing you to work for them.

See other insurance articles by this author at:


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    • Spencer Wouldhe profile image

      Spencer Wouldhe 16 months ago

      Great article on the Insurance Industry. If you are looking to join the industry and you are looking for a trusted solution provider. You should look into They have been in the Insurance Software Industry for over 25 years. FileHandler and PolicyHandler are the leading trusted programs in the industry.

    • profile image

      Shannon 2 years ago

      Enjoyed the article...I would like to research a little more about this

    • profile image

      Hope 3 years ago

      Good advice

    • profile image

      quebae 5 years ago

      Excellent advice.

    • junko profile image

      junko 6 years ago

      You have given hope to some bodies who didn' have a clue. Good and Useful