One of the first things someone wants to know when getting a job is “How much will I get paid?”. Independent Adjusters, or IAs, are unique in the sense that they can typically be paid three different ways: day rate, hourly, and fee schedule split. Let’s break down each one and show some examples.
- Day Rate:
- With day rate, you are compensated per workday regardless of how many hours are worked. Day rate is used by IA Firms during a catastrophe to fill immediate and temporary staffing needs. The roles and rates can vary depending on the firm’s or insurance company’s needs. For example, I have been paid day-rate to be on stand-by and attend an orientation prior to Hurricane Dorian. I have also been paid day-rate for a temporary Team Lead position. It is also common for field adjusters to be offered day-rate on a deployment after the initial wave of claims from slows down. Each storm season is different, but I have seen rates ranging from $400 – $700 / day.
- Hourly Rate:
- Hourly rate is what most employees are familiar with. You get paid a set rate based on every hour worked. Over the years, I have seen this rate range between $18/hr to upwards of $60/hr. Again, this will depend on the specific role and experience of the adjuster. If you are being deployed as an independent adjuster on an hourly basis, it is important to consider the tax burden and living expenses you may incur. My first deployment was a 6 month assignment to St. Louis at $25/hour as a CAT Desk Adjuster. After taking into account the gas, food, hotel, and 30% for taxes, I ended up making only $10/hour. While this is not a lot, it led to invaluable friendships and many field deployment opportunities ever since.
- Fee Schedule
- This is where the real money is made. Most independent field adjusters are paid based on a percentage of the fee schedule. The fee schedule is negotiated between the IA firm and the insurance company. It is called a fee schedule because the rate paid increases as the size of the loss increases. It is typically based on the gross loss amount of the claim. The idea being, the higher the claim amount, the more work is involved in scoping and estimating the loss. See the example below: Fee Schedule Example
| Gross Loss | Fee Amount |
| Erroneous | $60 |
| Closed w/o Pay – $1,000 | $250 |
| $1,000.01 – $2,500 | $365 |
| $2.500.01 – $3,500 | $445 |
One Thing to Keep In Mind:
Since IAs are independent, they are their own business and mostly paid as a 1099 or independent contractor. There are some situations where you may be paid as a W2 employee, with the employer taking taxes out. Discuss this with your IA firm prior to accepting a job so you can plan accordingly. If you plan on working as an IA full time and make over $50,000/year, talk to a tax advisor to discuss your options.
Takeaways:
I have worked as an IA for the last eight years and been paid by each method described above. I have negotiated my fee schedule percentage and day-rate multiple times with different IA firms. I prefer the fee schedule method of compensation the most, since my pay is greatly dependent on the amount of effort and work I put in. The more efficient I am, the more homeowners I can help, and the more claims I can close. Whichever method works best for you, make sure you are familiar and comfortable with the rate prior to signing any contract.
I hope this helps answer some questions you may have regarding how independent adjusters get paid!
