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Insurance Adjuster vs. Contractor: FAQs Answered

None of us can predict if or when we will suffer damage to our property due to a sudden and accidental event. But when it happens, it might be hard to understand which parties are involved and their responsibilities.

Questions regarding the role and responsibilities of an insurance adjuster versus those of a contractor often arise.

With many years of experience as a Los Angeles public adjuster, we are happy to share some frequently asked questions and our responses.

Insurance adjuster and contractor looking over plans

Since we operate in Southern California, we refer to California law, rules, and regulations where necessary.

Insurance Adjuster vs. Contractor

Insurance Adjuster

When you file a claim for a covered event, your insurance company appoints an insurance adjuster to investigate and adjust your claim.

Insurance adjusters typically fall into one of two categories, namely:

Company or “Staff” Adjuster – A full-time employee of an insurance company.

Independent Adjuster – A contracted representative, acting on behalf of an insurance company. An independent insurance adjuster can work on a contract basis for multiple insurance companies.

Insurance adjusters act in the best interests of the insurer by helping to minimize their liability.

They should not be confused with public adjusters who act in the best interest of policyholders.

Refer to our article on public adjusters versus independent adjusters for more information.

In California, insurance adjusters need to be licensed by the California Department of Insurance.


A contractor is a party who is licensed to make the necessary repairs to your home after a covered event. You typically have a choice between picking a contractor that’s recommended by your insurance company or hiring another contractor. Either way, the contractor “officially” works for you, not your insurance company.

In California, contractors need to be licensed by the Contractors State License Board (CSLB).

Frequently Asked Questions

Is it true that insurance companies have their own contractors?

The short answer is NO.

Insurance companies typically have lists of preferred contractors. Although your insurer might suggest you use a preferred contractor known to them, it’s not an in-house contractor. You may either hire a preferred contractor or choose your own.

Preferred insurance contractors or vendors typically act in the best interests of your insurance company although they officially work for you, not your insurer.

Can I hire my appointed insurance adjuster as my contractor?

The short answer is NO.

An insurance adjuster, even an independent one, may not fulfill the roles of adjuster and contractor as it creates a conflict of interest. It would make them judge and jury.

Besides the fact that no insurance company would allow it, it’s also not permissible by law.

California Law

In California, Insurance Code – Section 14039 states:

No person licensed as an insurance adjuster shall do any of the following:

(a) Fail to disclose his or her full financial interest in a contract or agreement executed by him or her for the adjustment of a claim prior to the execution thereof.

(b) Use any misrepresentation to solicit a contract or agreement to adjust a claim.

(c) Solicit or accept remuneration from, or have a financial interest exceeding 3 percent in, any salvage, repair, or other firm, which obtains business in connection with any claim which he or she has a contract or agreement to adjust.”

Based on Section 14039 (c), an insurance adjuster may not receive payment from a contractor who obtains a contract for any claim they are adjusting. And they may not own more than 3% of said contractor.

Can I hire a contractor to help me settle my insurance claim?

The short answer is NO.

Contractors play an essential part in repairing your property. But they cannot file, manage, or help settle claims on your behalf.

It would constitute the unauthorized practice of public adjusting.

California Law

In California, Insurance Code Division 5 deals with insurance adjusters.

  • Chapter 1, Article 3 – Sections 14020 – 14047: Deals with the regulation, licensing, and registration of insurance adjusters.
  • Chapter 2, Article 3 – Sections 15006 – 15032: Deals with the regulation, licensing, and registration of public adjusters.

Anyone who acts or assumes to act or represent themselves as a licensed public adjuster while they are not is liable for up to $10,000, or if that violation is willful, up to $25,000 in a civil action.

What if the quotes I got from contractors are higher than the estimate of the insurance adjuster?

In principle, you should receive a settlement offer that is sufficient to restore your home to its pre-damaged condition. Note that some factors, such as the condition of your roof, for example, might play a role if you have a leaking roof.

Insurance adjusters often use computer programs to estimate the cost of repairs. In some cases, their cost estimate may no longer be accurate due to, for example, rising inflation and a shortage of materials.

The best way to remedy the situation is to present the insurance adjuster with quotes from contractors. Don’t hesitate to ask the adjuster to review their estimate if you think it will leave you out of pocket.

Can I use the adjuster appointed by my insurer to help settle my claim?

The adjuster appointed by your insurance company wants you to accept their first settlement offer. An insurance adjuster is not going to help you get a better settlement offer. They act in the best interests of your insurance company and won’t leave money on the table.

If you need help getting a better settlement offer, your best option is to hire a public adjuster. A public adjuster looks after YOUR best interests, not the best interests of your insurer.

That’s a Wrap

Dealing with an insurance adjuster and contractor(s) can be time-consuming and frustrating, especially if you get conflicting information.

Questions regarding the role and responsibilities of an insurance adjuster versus those of a contractor often arise. We trust after reading this article you have a better understanding of insurance adjusters versus contractors.

If you have a large or complex homeowners insurance claim, we highly recommend hiring a public adjuster to manage your claim.

A licensed public adjuster can deal with the insurance adjuster and assist you in hiring an insurance claim contractor. And they help you to get the best possible settlement offer you’re entitled to under your homeowners or business insurance policy.

Avner Gat, Inc. has 17+ years of experience as a public adjuster in Los Angeles and Southern California. We protect homeowners and business owners from the games and fine print that insurance companies are known for.

Call us at (818) 917-5256 to find out how we can help you.

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