The Role of an Insurance Adjuster in Short-Term Rentals

When an accident or disaster strikes your vacation rental property, your insurance adjuster plays a critical role in determining the extent of the resulting damage. They serve as a link between property managers, owners, and insurance companies, and they have extensive training and experience in analyzing and appraising the value of all the items and structures that have suffered the brunt of a catastrophe.

Below, we’ll take a close look at the many roles an insurance adjuster plays during the claims process. We’ll also describe the different types of insurance adjusters and how their responsibilities differ. Finally, we’ll discuss how short-term rental property managers can engage adjusters to ensure a smoother, streamlined evaluation.

What Is the Job of an Insurance Adjuster?

What does an insurance adjuster do? During an insurance assessment and settlement, they are tasked with the following duties:

Verifying Coverage

An insurance adjuster hits the ground running whenever a policyholder files a claim. The first thing they assess is whether the holder’s existing coverage can be applied to their current losses.

If the adjuster decides the current policy cannot cover the claim, they might issue an official denial or contact the policyholder to explain how the damage falls outside of the policy’s scope. Depending on policy conditions, property managers may have the ability to appeal coverage denial. The adjuster can also look for alternate solutions that may be deployed as well.

If the adjuster determines the claim has merit, they move on with the claim as soon as possible.

Establishing a Timeline

The first function of an insurance adjuster, once they take on a claim, is setting a reasonable adjustment time frame based on prior experience to anticipate potential hold-ups or drawbacks.

The adjuster must address many matters. A timeline, therefore, often helps keep the operation efficient and practicable. It could also help the parties control the evaluation’s costs, and authorities may require that adjusters follow a prescribed timeline to meet compliance regulations.

Collect Witness and Interested Party Statements

Next, the adjuster will gather information from any potential witnesses of the property damage, including the tenant, if the unit was occupied at the time. They’ll also speak with the property manager and (if different) the owner.

Once witnesses and interested parties are identified, the adjuster will arrange interviews or group meetings to record their statements. They may ask about when the incident happened, the surrounding environment or circumstances, and other factors specific to the event. The evidence an insurance adjuster collects helps determine the validity and liability of the claim at hand.

File Relevant Documentation

Paperwork is inevitable in insurance adjustments, and there’s much of it that the adjuster must file. In addition to the witness statements mentioned above, the adjuster will gather photographic evidence, police reports, estimated repair costs, and any other property records and policy documents.

Together, all of the documentation provides a comprehensive picture of the damage and its impact on the property, which, in turn, helps the adjuster evaluate the claim more efficiently and fully.

Assess Damage and Investigate Liability

From here, the adjuster will examine every aspect of the damage and the extent of liability. They’ll visit the site to inspect visible damages, usually documenting them with photographs, weather reports, tenant agreements,  maintenance records, and whatever information they can access to establish a better idea of how the damage unfolded.

Weigh Damage Against Policy Terms

After the assessment, the adjuster will cross-check the incident report against the policy’s coverage and terms. They’ll contact contractors to estimate the cost of repairs, referring to the property’s condition before the damage occurs. They may also determine whether neglect or external factors contributed to the damage, as well as research market values and average replacement costs for the affected items and properties.

Report Back to the Authorities and Negotiate With Vendors

Depending on their job structure, the adjuster will report to either the insurance company or the authority they work for. Their report should be highly detailed and precise. At this stage, the adjuster may negotiate with contractors to set costs and establish resolution timelines.

Review the Incident Upon Policyholder Appeal

If the property manager disagrees with the settlement offer, the adjuster may review the collected information and evidence to see if corrections are needed. Though doing so may result in a better settlement offer, it may also end in the insurance company’s original decision being reinforced.

Types of Insurance Adjusters

Speaking very generally, insurance adjusters operate in one of three business structures, and there are different advantages to using each of them:

Company

Some adjusters are employed by insurance companies or agents. They work with and report exclusively to their employers, typically following company directives regarding timelines and the overall claim process. Going through an insurance company can provide a documented and straightforward claims process.

Independent

Independent adjusters may also work as contractors with multiple insurers and third-party administrators. Their independence often means they’re on-site sooner than most other adjusters. Depending on their experience, independent adjusters may have particular skill sets and be able to maintain impartiality.

Public

A public adjuster works on behalf of the policyholder, much like a fiduciary, who is obligated to serve their client’s interests first and foremost. They’re usually employed by independent firms or sole proprietors. And since they “work” directly with managers, they may be able to maximize settlement amounts. 

How to Work With a Claims Adjuster

In order to properly engage with insurance adjusters, short-term property managers should take the following steps:

• Start the reporting process as quickly as possible after the damage occurs
• Make and keep comprehensive records of the incident, including receipts and photos
• Give the adjuster full access to the property and be on-site to answer their questions
• Maintain a clear and honest path of communication with the adjuster during negotiations
• If the insurer offers a settlement, review the terms very thoroughly

It’s imperative to ask any questions you might be unclear about and not hesitate to bring up any concerns you may have. 

Safely: Providing Short-Term Rental Insurance

Safely helps short-term and vacation property managers obtain insurance and supports them during discussions with adjusters. Contact our sales staff via our online form today to learn more about what we offer.