How do independent adjusters typically operate in the insurance industry?

• A. They work on a commission or fee-plus-expenses basis
• B. They are salaried employees of major insurance firms
• C. They handle government-related claims only
• D. They exclusively work with farmers and crop insurers

Answer: (A)

Independent adjusters play a vital role in the insurance industry by operating as third-party professionals who evaluate claims on behalf of insurance companies. Typically, they do not have a permanent employment relationship with a single insurer, which allows them to work for multiple insurance firms as needed. This flexibility encourages a performance-based compensation structure.

The correct answer highlights that independent adjusters often receive compensation either through commissions based on the claims they adjust or through a fee-plus-expenses model. This means they might charge a set fee for their services and be reimbursed for related expenses incurred during the claims process. This payment structure aligns their interests with the insurers, incentivizing them to resolve claims efficiently while ensuring a fair assessment of losses.

In contrast, being salaried employees of major insurance firms would not align with the independent nature of their work. Additionally, focusing solely on government-related claims or exclusively working with farmers and crop insurers would restrict their broad functionality in the market, as independent adjusters can operate in various sectors and claim types. This versatility is key to their role in the insurance ecosystem.