cat claims

What are cat claims, and how are they different from daily claims?

As insurance claims adjusters, we handle all types of losses and claims — from catastrophic claims to daily claims, crop adjusting to auto damage appraising and property adjusting. Within the various types of losses, there are also different ways that claims are dispatched to us.

The type of claims we handle greatly affects the type of work that goes into each claim. 

Many new adjusters don’t realize that there are many ways to get work, and you don’t have to choose just one. If you are an independent adjuster, and you ignore one way to get claims, it could cost you tens of thousands of dollars per year in missed opportunities.

So, what kind of claims work should you be looking for? 

In this article, I’ll clear up the differences between cat claims and daily claims, and help you choose your path as an independent adjuster.

What are Cat Claims?

Catastrophic claim hurricane damaged house

Cat claims, or catastrophic claims, result from a CATASTROPHE. They are typically large numbers of losses occurring due to a single event. As a result, insurance companies must allocate extra resources to handle the large influx of claims.

Whether you work directly for an insurance company or as an independent adjuster, you may be sent, or deployed, to an area that has been devastated by a catastrophic event. 

Whether it is a weather event like a tornado, hail storm, or hurricane, or a man-made disaster like an oil spill, adjusters are needed to handle the massive number of claims that have been filed as a result.

Catastrophic insurance adjusters are normally required to travel to the affected area to assist with those claims. Many times you will receive dozens of claims to be handled before you even arrive on site.

The most common types of cat claims are flood, wind or tornado damage, fire, and hail. Because their work aligns with major weather events, cat adjusters have busier seasons depending on the area. They also pay attention to hurricane predictions and other seasonal changes to plan where they may be needed.

How long do cat deployments last?

When you are sent to a catastrophic deployment, it is not determined beforehand how long you will be working in that area. It is likely that dozens or hundreds of others of adjusters have also been sent to assist the insurance company with their claims.

How long it takes to clean up all the claims varies GREATLY per storm and per insurance company. Each company has different tactics they employ to serve their insured clients.

The company that deployed you, whether an insurance company or one of many independent adjusting firms, will determine how long you stay. The length of your deployment is ultimately based on claim volume and your performance. The most efficient and customer-driven adjusters tend to stay deployed longer than others.

Being one of the best means you’ll likely get to stay longer and earn extra income. Independent adjusting is a career where if you are skilled, you will earn more money. Being prepared with auto or property adjuster training is ESSENTIAL to ensure you have the greatest opportunities for earning when cat claims arrive.

How much do you earn with cat claims?

Catastrophic claims can be a great way to boost your income as an adjuster. Your income depends on the type of claim and type of employment you have.

Staff adjusters working directly for insurance companies often earn a per diem plus additional cat pay for the hours they work.

Independent adjusters that are contracted for a storm are either paid per claim or per day. Some independent adjusters have earned six figures in a few months on a big storm, but the salary of a catastrophic independent adjuster varies GREATLY depending on the circumstances. 

Typically independent adjusters earn more handling cat claims than daily claims.

What are daily claims?

Wrecked Vehicle and Car Damage

Daily insurance claims are losses that result from everyday events. For example, two people backing into each other in a parking lot or water damage from a leaky pipe would result in a daily claim.

Adjusters that work for insurance companies usually have a set amount of claims they’ll handle on a given day. They may be given four to seven new claims that need to be processed each day.

Independent adjusters are dispatched by independent adjusting and auto damage appraisal companies, as the need arises. These daily claims can come in as a trickle, just a few each day, or in large waves, depending on the needs of the staffing company.

How long do daily claims take?

Daily claims are expected to be completed and turned in FAST. 

For auto claims, the expected completion time, also known as cycle time, is forty-eight hours. For property claims, you’ll need to complete those claims in less than five days.

You can’t predict how often or how many claims you will receive as an independent adjuster, so being signed up with many different independent adjusting firms is important.

How much do you earn for daily claims?

Staff adjusters that work for an insurance company typically earn a salary or an hourly rate to handle daily claims. Many staff adjusters receive a benefits compensation package, but the average salary of an adjuster is around $50,000.

Independent adjusters typically earn on a per claim basis. When just starting out, independent auto damage appraisers earn $60 per claim. Independent property adjusters earn $150 – $500 (or more!) per claim, depending on their fee schedule. A fee schedule is an agreement of what the adjuster will be paid, based on a percentage of the total claim amount.

Can you do both cat claims and daily claims?

Many new adjusters have no idea that you can handle BOTH daily and catastrophic claims in your career. If you work for an insurance company as a staff adjuster, you can also get on the company’s catastrophic team. You can be eligible to be deployed to the big storms, and continue working daily claims the rest of the year.

As an independent adjuster I HIGHLY recommend that you diversify your business by being available for daily and cat claims. With the ability to do both, you can earn money throughout the year, while waiting for the big earning potential of catastrophic deployments.

Keeping your options open and money coming in as a business is a great way to ensure you have a prosperous and successful career as an adjuster.

Next steps to get started with cat claims

If you are interested in getting started as an adjuster or auto damage appraiser I encourage you to get a free copy of our adjusting roadmap. It will walk you through the steps of how to get started and help you understand the journey you are about to embark on.

I’m also giving away this 5-part video training series, the ​Independent Adjusters 101: An Adjusters Crash Course that clarifies everything you need to know about becoming a successful adjuster.