Fee Schedules Explored

Fee Schedules Explored
Everyone want to know about getting paid. In most professions, it is rather straight forward, you are either paid a wage, a salary or a commission. As an Adjuster, you are paid as an Independent Contractor. Some IA Firms pay on a daily rate, but in most cases, Adjusters are paid a percentage of the “Fee Schedule.”

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The Insurance Companies pay the IA Firms a fee for every claim worked. It is based on a percentage of the settlement amount. This fee is then split with the Adjuster that closed the claim.

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Most IA Firms pay between 55 and 70% of the fee to the Adjuster. In major disasters when Adjusters are in high demand, that percentage increases as the different IA Firms find themselves in a bidding war for the experienced Adjusters.

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There are other factors that can determine the percentage paid, such as the types of disasters, location, the severity of the claims and the Adjuster’s skills. Offering a higher percentage is one way the different IA Firms compete to maintain a roster of the best Adjusters available.

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For example, you work a claim that settles for $35,000. Your IA Firm is then paid around $1,640. You will then be paid 55% to 70% of that amount ($902 to $1,148).

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There are nominal payments made when you discover a claim given you is bogus, the claim is withdrawn, or it is closed without payment.

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Keep in mind, you are paid as an Independent Contractor (1099), no taxes are taken out. Doesn’t mean you don’t owe tax! You can pay quarterly or annually, whichever way you want to go. A good business plan is to find an account you can have a long term relationship with.

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