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Last Post 08/23/2007 12:43 PM by  Ray Hall
Adjuster Commission Rate
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Gamegetter
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08/22/2007 11:20 PM

    1. What commission rate do you feel an experienced and proven adjuster should be paid?

    50%........60%..........70%..........

     

     

    Medulus
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    08/23/2007 8:39 AM

    Not a simple question, Tim. There are any number of factors that could be considered in determining the answer. The first would be, "What is the fee schedule?" Fee schedules are negotiated by people other than the adjuster. In many cases, the vendor sales staff or executive who "negotiated" the fee schedule should be pounding the pavement looking for a new job. Yesterday I spoke to a staff adjuster at a major vendor. He was compalining to me about having to travel about 120 miles round trip to inspect a hail claim for a flat fee (0 to $5000 loss) of $165, no miles, no photos. The insured on the claim was represented for some reason by a public adjuster. The correct answer to that fee schedule would be that an experienced and proven adjuster should be paid at least 300% of that fee billing. The cat department at the same company has recently been bucking the trend and simply saying to companies with abysmal fee schedules that they simply do not need their business, no matter the volume. Imagine that! Now that's courage on the part of the vendor's cat department.

    The second factor involves what the carrier expects in terms of file requirements. Do they expect an unagreed estimate and close? Do they expect full adjustment? Do they expect us to deal with public adjusters, reopens, etc. under the original fee or do they then become time and expense files?

    Then there is the expense factor. If I am handling claims from home as daily claims or branch assist, then 50% may be acceptable. If I am incurring road expenses, 60% is bare minimum. 65% to 70% would be better. This would also vary depending on whether the vendor is providing workers comp, errors and ommissions, and whether the vendor hires us as an "as needed" employee and pays social security.

    Supply and demand will also play a part in what is a fair commission, but I hope we never need to get so desperate for work that we see the fee schedules and commission percentages erode to pre-2004 levels again. File requirements never go down. Our costs never go down. Gas prices go down only in preparation for assaulting us with new highs. Fee schedules and commission percentages should not be going down either.

    Steve Ebner CPCU AIC AMIM

    "With great power comes great responsibility." (Stanley Martin Lieber, Amazing Fantasy # 15 August 1962)
    JimGary
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    08/23/2007 10:39 AM
    I have worked for all three (50-60 & 70). And I set through classes and seminars, and see folks that are having trouble understanding the simplest concepts in adjusting, yet getting offered the same contract as the seasoned adjuster. It is frustrating knowing that "5, 10,20 years experience" are just words on a resume.

    To get to the question, obviously 70% is preferred.
    I know the voices aren't real, but sometimes they're right!
    swink_d
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    08/23/2007 10:50 AM

         Is this a trick question?

    JimGary
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    08/23/2007 11:07 AM
    Not a trick, question. Just not the smartest way to ask it. If the norm is 60/40, should you pay the seasoned adjuster more, or the inexperienced adjuster less?
    I know the voices aren't real, but sometimes they're right!
    cajunadj
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    08/23/2007 11:25 AM
    I work for a company that pays 65. The one I worked for before this one paid 75....They now offer 70...The stability, help,the people you work with, the amt. of work you get from them and not having to worry about getting paid is worth alot more than the 10% less you get paid. I would not want to work for anyone else after I have been spoiled...Just my humble opinion..
    Buford Gonzales
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    08/23/2007 11:41 AM
    I am a business man, I work for the best pay I can negotiate with the most reliable firm I am called to work for. I provide for my own living expenses, fuel, medical, computer programs, etc: I have to pay these expenses during a Cat deployment, or when I am at home. I don't see a reason to work for less than 65%. By the way, an IA Firm cannot get a contract without E&O Insurance. The reason they require us to have it is to lower their risk.
    Ray Hall
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    08/23/2007 12:43 PM

    Measure all compensation by the Independant Contractor status. Pilot one of the largest and best pays 65% of a schedule that has no hidden charges(charge the carrier more than your copy). This is VERY important. Next you are a temp. employee, with FICA and Tax taken out of your pay. Pilot has 401 K and pays unemployment tax in ever state. Workers Comp  and E & O.  An advance with deployment. A cut off payday date and direct deposit twice monthly. The real biggie is Pilot encourges their people to draw unemployment on the down times.  Measure all others against this and 75-80% would not be unreasonable," IF" you can get it. Good luck.

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