Why Adjusters Should Be Aware of Negligent Misrepresentation

Posted on October 07, 2015

Insurance adjusters have a unique place in the insurance industry due to working closely with both the insured party and insurance company. Because of their role in the claims process, insurance adjusters need to be especially thorough and honest in the work they do. Negligent misrepresentation in insurance adjusting exposes insurers to greater risk and adjusters to personal liability claims.

Insurance Companies’ Increased Exposure

When an adjuster misrepresents an insured party’s policy or claim, the insurance company that underwrote the policy is exposed to additional risk. The insurance industry is based on “good faith” efforts. When an adjuster who was selected by the insurance company does not act in good faith, the insurer may be held responsible (rules vary by state). This is true even though the adjuster may not be a direct employee of the insurer.

Be a Responsible Adjuster

This news is not meant to scare insurance adjusters, but rather to remind adjusters how important it is to be a responsible adjuster. Responsibility has three aspects. First, in today’s litigated world, all adjusters should have professional errors and omissions (E&O) insurance.

Second, you must remain current on new developments in the industry and earn continuing education credits.

Third, you need to approach each claim honestly and report what has actually transpired. Do not be negligent in work and do not be dishonest. Be an upright person in all your dealings.

Keep watch for negligent misrepresentation in insurance adjusting in all claims.