Name: Wallace Law
Address: 1414 North Taylor Drive, Sheboygan, Wisconsin, 53081
Telephone: 920.276.8320
Price range: Free consultation

While an insurance adjuster may not receive a bonus as a direct result of denying a claim, it is hard to argue that they do not benefit financially from doing so. Bonuses or other financial rewards are usually much higher for adjusters when the insurance company they represent saves more money. Because an insurance company will make more money when denying a claim (as opposed to approving it), an insurance adjuster is more likely to receive better job security and larger bonuses when they deny or offer lower settlements.

If you believe your claim was unfairly denied or need help filing a claim, Wallace Law can help you by investigating the reason for the denial or negotiating a fair settlement on your behalf. To learn more, contact us for a free consultation.

Insurance adjuster standing next to a several cars that were in an accident

What Does an Insurance Adjuster Do?

An insurance adjuster is a professional who works for (or with) an insurance company to investigate insurance claims and determine the extent of the insurance company’s liability. Depending on what type of insurance company they represent, their job may be to examine property damage, personal injury claims, or health conditions, review police reports, speak with witnesses, consult medical or repair records, or assess the value of damaged items or the severity of medical conditions.

While insurance adjusters are essential to the insurance claims system, it is important to remember that their primary goal when fulfilling these duties is to save the insurance company as much money as possible, meaning they may be motivated financially to deny your claim.

How Do Insurance Adjusters Get Paid?

It depends on what kind of insurance adjuster they are and who they work for:

Company Adjusters: Also known as “staff adjusters,” these individuals work directly for insurance companies and receive a regular salary, along with benefits like health insurance, bonuses, and retirement plans.
Independent Adjusters: Hired by insurance companies on a contract basis, these adjusters are usually paid per claim or on a daily rate. Their income can vary depending on the volume and complexity of the claims they process.
Public Adjuster: These adjusters work on behalf of policyholders, not insurance companies. They typically charge a fee that is a percentage of the final claim settlement, often ranging from 5% to 15%.

How Much Do Insurance Adjusters Make?

According to the most recent data from the Bureau of Labor Statistics, claims adjusters (including examiners and investigators) earn a median annual salary of $75,050 per year. Of course, this does not include benefits, including retirement funds or performance bonuses.

Why Do Insurance Companies Deny Claims?

There are many reasons why an insurance company may deny a claim. In many situations, it may be a simple mistake, either from human error or a tech problem. In other cases, the policy itself may restrict the amount that a policyholder can receive or prevent them from coverage altogether.

Regardless of the reason that your claim may have been denied, it is always a good idea to follow up with the insurance adjuster or fight the ruling when necessary. As our firm has witnessed time and time again, insurance companies are often motivated to find any reason at all to deny your claim so that they can save their employer money and protect their career stability. However, it is illegal for a claims adjuster to deny you without any reason at all.

Does an Insurance Claim Denial Affect an Insurance Adjuster’s Salary?

Yes and no. While an insurance adjuster’s salary is not directly impacted by the number of claims they approve or deny, the company itself is. Many insurance adjusters receive bonuses at the end of the quarter or year based on how much money the company makes.

If the company saves more money as a result of the number of claims denied, the bonus for insurance adjusters will be higher. The opposite is also true. If an insurance adjuster approves too many claims, not only will their bonus be affected, but their job security may also be impacted.

Insurance companies are motivated to save as much money as possible, so many have a natural inclination to hold onto insurance adjusters who deny claims rather than those who approve them.

What Is a Whistleblower?

A whistleblower is a person who works within an organization or company and reports on fraud, waste, dangerous working conditions, or threats to public health or well-being. In the context of insurance companies, a whistleblower may be an insurance adjuster themself or another individual working for or with an insurance company that reports on illegal business practices such as bad faith claims or other illegal claim denial practices.

Whistleblower Cases Tied to Denied Claims

There are many examples in the news of insurance adjusters (and other insurance professionals) blowing the whistle on alleged illegal claims denials. Here are a few recent examples:

Heritage Insurance

One of the most recent examples of alleged insurance fraud comes from Florida after several former claims adjusters who worked on behalf of Heritage Insurance accused the company of systematically altering the damage estimates for 2024 Hurricane Ian and Milton victims. Heritage Insurance is also accused of illegally denying claims or reducing the payout amount unjustifiably. A class action lawsuit was brought against the company by policyholders and is still ongoing, however, the company has already been fined $1 million by the Florida Office of Insurance Regulation for improperly handling claims.

Group Health Cooperative

While the whistleblower action filed against Group Health Cooperative occurred over a decade ago, the case only recently wrapped up just a few years ago. In 2012, Teresa Ross, a former medical coding manager at the company, filed a suit claiming that a consulting firm hired by GHC relayed unsubstantiated diagnoses to defraud Medicare to boost their reimbursements. Ross and her attorneys estimated that approximately $8 million was fraudulently obtained in 2010 alone.

In 2020, GHC agreed to settle the case by paying $6.3 million.

Cigna, Humana, and UnitedHealth Group

In recent years, many insurance companies have used AI technology to handle their policyholders’ claims. Unfortunately, this has led to many claims being wrongfully denied and has even allegedly resulted in fraud. In response, a class action lawsuit against Cigna, Humana, and UnitedHealth Group has been filed by Clarkson Law Firm, claiming that over 300,000 claims have been denied by Cigna’s AI services over 2 months, meaning that each claim was allegedly only “assessed” for an average of 1.2 seconds.

Common Reasons for Health Insurance Claim Denials

There are many cases where claims are mistakenly denied, and by appealing, policyholders can recover lost coverage. However, in other cases, the insurance company may be fraudulently or negligently denying claims with no regard for the health and safety of its policyholders.

Below are a few common reasons our firm sees for claim denials. If you believe your claim was denied in error or may be a bad faith claim denial, our firm can advocate on your behalf to settle it.

female insurance agent listening to her client with her hand on her chin

Prior Authorizations

Some treatments or medications may require pre-authorization from the insurance company, even if it is within the policyholder’s coverage. If the policyholder fails to check with the insurance company first, the claim can be automatically denied, even though it would otherwise be covered by their policy.

Insufficient Coverage

When an insurance company cites “insufficient coverage” as the reason the claim is denied, it means that the claim amount goes beyond the limits of the policy. For example, if a patient’s health insurance policy has a $10,000 annual limit for mental health services and the submitted claim is for $12,000, the insurer may deny the portion that exceeds that limit.

Similarly, if a specific service is not included in the plan (like certain alternative therapies or elective procedures), the insurer may deny the entire claim, stating that there is insufficient coverage for that treatment. Of course, many insurance companies may try and abuse this reasoning, and if they think that they can deem something as an outlier to your coverage without you challenging the decision, they oftentimes will.

Not Medically Necessary

Insurers often deny claims if they determine that the treatment provided was not “medically necessary.” This judgment is based on the insurer’s guidelines, not necessarily the doctor’s opinion, and can even sometimes contradict what a physician recommends. Our firm has seen countless cases where the insurance company has denied coverage for lifesaving procedures, so if you believe that you have been unfairly denied, contact our insurance attorneys right away.

Claim Submission Errors

Even minor mistakes, such as the misspelling of your name or incorrect policy number, can result in your claim being denied. Of course, these mistakes go both ways, and some insurance companies have even been accused of intentionally altering policyholder submission details to deny their claim.

Out-of-Network Doctor

Most health insurance companies provide a limited network of healthcare providers for policyholders. This means that if you see a doctor outside of your policy’s network, your treatment may be denied, leaving you to pay most or all of the bill yourself.

Pre-Existing Condition

Many policies only cover certain medical conditions if the condition surfaces after the policyholder enrolls. To deny coverage, your insurance company may try to claim that your condition existed before you purchased your policy. This is frequently seen in patients with cancer or other asymptomatic conditions because they can be hard to detect in the first stages.

However, regardless of your medical condition, you still have the right to challenge all decisions made by the insurance company with the help of a lawyer.

Coding Errors

Healthcare providers use a system of medical codes to indicate specific treatments and medications. If the incorrect code is inserted or if it does not match the insurance company’s records, the claim may be denied or flagged as a result.

Lack of Documentation

There is a lot of documentation involved with medical insurance claims, including medical records, test results, doctor’s notes, identification, and prescriptions. If you, the healthcare provider, or even the insurance company, fail to provide documentation when reviewing the claim, you can be denied.

Missed Deadline

Most insurance companies have filing and enrollment deadlines you will need to meet to get coverage. The exact timeframe you will be working with varies, but they are almost always strictly enforced, even if the treatment or procedure is normally covered.

How to Protect Yourself When Dealing with Insurance Adjusters

An insurance adjuster’s job is to investigate an insurance claim to determine if the claim meets the terms of the policy and calculate how much the insurance company will offer to the policyholder. When investigating a claim, it is imperative to remember that when interacting with them, they are looking for any information that they can use to deny your claim or offer you an unfair amount. They may even attempt to show up at your work or your neighborhood unannounced to look for physical evidence or trick you into offering incriminating information.

The good news is that there are steps you can take to prevent the insurance adjuster from benefiting from these predatory tactics. When in doubt, you can always hire an insurance lawyer to communicate with the insurance adjuster on your behalf. Here are a few additional tips:

Answer all questions honestly, but do not offer more information than you are obligated to give.
Do not consent to your conversation being recorded.
Keep detailed records of all things related to your claim.
Do not accept a settlement offer without consulting your lawyer.
Understand what your policy covers and speak up if something sounds off.

Can a Lawyer Help with a Denied Insurance Claim?

Absolutely. Our insurance dispute lawyers are specifically trained in navigating the insurance system and dealing with predatory insurance adjusters who work in a variety of fields, including:

Property insurance (home and commercial)
Health insurance
Life insurance
Travel insurance

Our firm can also investigate the reasons you may have been denied, file paperwork, collect evidence and documentation, and advocate fiercely on your behalf to help you get the settlement you deserve.

Insurance Adjuster FAQ

Once you’ve decided to pursue an appeal or lawsuit against your insurance company, it can be hard to know where to start. Below are a few questions that our firm commonly receives from our clients. If you have any additional questions, we encourage you to contact us directly.

How Do You Know if an Insurance Adjuster Is Acting in Bad Faith?

Insurance companies are legally obligated to make their judgments based on factual information and within the confines of the policy. If they falsify their reports or deny or reduce your claim with no legitimate reason for doing so, the ruling may be considered a bad-faith claim. Other signs that the insurance company is acting in bad faith may include:

Contacting you during hours when they know you are unavailable to talk or not contacting you at all.
Denying your claim with no reason given.
Offering an unreasonable settlement amount.
Lying about or misrepresenting policy terms.
Waiting out the filing deadline.
Pressuring you to settle quickly or dissuading you from contacting a lawyer.

What Can You Do if Your Insurance Claim Was Denied?

Being denied coverage is stressful, but with prompt action, there are steps you can take to try and reverse the decision:

Read the denial letter. There should be a clear explanation for the denial, a method of contact, and steps for appealing the decision.
Contact your insurance company through the method provided and clarify the reason for the denial.
Collect all documentation relating to your claim, including policy guidelines, submission and denial letters, and medical or property records.
File an appeal. Every insurance company has its own appeal process. Learn the process and follow the steps, making sure to meet all deadlines and filing requirements.
Contact a lawyer. A lawyer will help you understand the appeals process, help you gather documentation, file paperwork, and explore alternative options if needed.

How Do I Appeal an Insurance Claim Denial?

Every insurance company has its own appeals process, but generally, you’ll need to send a letter or form directly to the insurance company along with documentation relating to your claim. If filing a health insurance appeal, you may also need your healthcare provider to send a letter on your behalf. A lawyer can walk you through the appeals process and help you take the next steps.

Are All Adjusters Trying to Deny Insurance Claims?

Unfortunately, yes. Insurance adjusters are trained to look for any information they can use to justify denying your claim so that they can save their employer money. This may include lying to you, spying on you, trying to trick you into giving untrue information, or giving up your right to an appeal.

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Insurance Dispute Lawyer

Bad Faith Insurance Attorney

Commercial Property Insurance Dispute Lawyer

Denied Renters Insurance Claims Lawyer

Health Insurance Dispute Lawyer

Life Insurance Dispute Lawyer

Long-Term Care Insurance Denials Lawyer

Property Insurance Dispute Lawyer

Travel Insurance Dispute Lawyer

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Talk to a Lawyer for Help with Your Denied Insurance Claim

Receiving notice that your claim has been denied when you likely need it most is an event that no one should have to go through. Fortunately, you do not have to go through it alone. Our firm has extensive experience dealing with insurance companies that will not pay their fair share and has recovered hundreds of thousands of dollars on behalf of our clients.

If you need help filing or appealing a claim, contact Wallace Law to speak with an insurance dispute lawyer today.

We Can Help You

Reach out to us today for help with a denied claim.

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