Insurance Agents Versus Adjusters: The Sordid Differences

According to reports, State Farm pays Aaron Rodgers around $7,500,000 annually for his “Discount Double Check” ad campaign. I’m sure this sounds like loads of money, particularly to homeowners who’ve collected paltry payments on their storm claims.

For State Farm, however, this amount represents a mere fraction of yearly spending for insurance marketing campaigns. In fact, consumers might be surprised at how much insurance companies spend annually on advertising to attract new policyholders. Reports indicate that insurance companies spent the following amounts on marketing in 2015:

CompanyMarketing CampaignAnnual Amount Spent
State FarmDiscount Double Check$543,000,000
Liberty MutualN/A$354,000,000
AllstateGood Hands$259,000,000
USAAKnowing What It Means to Serve$141,000,000

Insurance companies have two sides to their business:

1) Marketing

Insurers spend billions annually. Insurance agents themselves are part of the insurance marketing business. Agents sell you a policy to protect against foreseeable accidental events such as fires, storms, theft, etc.

Insurance marketing is filled with gregarious people who provide clients a sense of security and well-being. Unfortunately, those trusted insurance agents don’t have authority to oversee or pay claims.

Once you file a claim, the other side of the insurance business raises its ugly head:

2) Claims Adjustment

The insurance company assigns an insurance adjuster to your claim with whom your agent has no affiliation. In fact, insurance companies often retain adjusters from out of state with whom you have no relationship whatsoever. Unfortunately, insurance adjusters are not as generous or gregarious as the marketing side of the insurance business.

In fact, adjusters are trained to look for any possible way to avoid paying the claim. They look for any applicable exclusions and conditions to coverage. If adjusters cannot find applicable exclusions, they look for ways to minimize payout.

For example, Pennebaker Law was recently hired by a San Antonio client whose home was damaged by 3.5″ hail. The out-of-state adjuster couldn’t find an applicable exclusion, so the insurance company has now retained an expensive engineering firm to write a report justifying the adjuster’s $33 payment on the policyholder’s claim.

Such bad-faith insurance practice is simply unconscionable. The policyholder’s agent doesn’t condone the insurance company’s behavior, but has no input or control over how the policyholder’s claim is adjusted.

Anyone who thinks insurance adjusters are working for them are simply not facing reality. The reality is this: All insurance companies train their adjusters in a manner consistent with the insurers’ ultimate goal. And what is that goal? Maximizing insurance premiums (thus the bloated, yearly advertising budgets), while minimizing claim payments (thus adjusters trained to look for exclusions).

If you’re unfortunate enough to be experiencing this firsthand, Pennebaker Law can help. You have contractual rights as well as protections afforded by the Texas Insurance Code and the Texas Deceptive Trade Practices Act (DTPA).

For a free assessment of your case, contact Pennebaker Law today.

My next blog will touch on “the fine print” within lengthy, verbose insurance policies. Insurance policies are replete with self-serving language, including exclusions and conditions that adjusters consistently utilize to deny or underpay claims.

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