How to Start an Insurance Adjuster Business in 7 Steps

Naturally, the first step in starting an insurance adjuster business is choosing a name for it. A good business name in the insurance industry gives the impression that the company is credible, reliable, and professional. Words that suggest accuracy and integrity tend to be a good fit for an industry where owners handle sensitive financial matters regularly.

Many business owners include phrases like “claims service,” “adjusting,” or “investigations” that make it clear what the company’s purpose is. No matter what, the business name can’t include any words that are prohibited by state law.

That said, a business owner can’t pick their favorite business name and assume that it’s fair game for them to use. First, they need to run some checks to verify it’s available: a business name search on the state’s website, a federal trademark search, and a state trademark search, to name just a few. These search tools can help the business owner verify that the desired name doesn’t infringe on any protected ones.

If the name passes those initial checks, it’s wise to see if there’s a matching domain name available. Clients will have an easier time finding the brand online if its web address matches (or closely mirrors) the company’s official name.

Some insurance adjusters decide to get a business name reservation (allowed in many states) to tackle other startup tasks without losing their desired name.

Need some inspiration? Here are just a few insurance adjuster business name ideas:

• Apex Claims Solutions
• Blue Line Adjusting
• Pinnacle Claims Service
• Keystone Independent Adjusting
• True North Investigations
• Reliant Claims Group
• Bedrock Adjusters

Just as an adjuster needs a plan of attack for assessing a property damage claim, an insurance adjusting company needs a good business plan. Writing a business plan is an important process; it forces the entrepreneur to think through key aspects of their business before they spend too much time or money on it. And once the plan is written, it acts like a road map for the company’s first few years of operation.

Every company’s business plan will look a bit different, but most will include a few key components. For starters, the plan should explain what the adjuster’s niche will be, such as residential property, commercial property, or even auto claims. This niche will also affect who the company’s target customers are (and the marketing strategy to reach them).

If there are local competitors, the plan should identify them and outline the strategy for standing out from them.

Last but not least, a vital part of a good business plan is the financial projections. This section should estimate the insurance adjuster’s startup costs and ongoing expenses. It also needs to outline the brand’s pricing strategy. Revenue projections for the first years are another important inclusion.

This financials section is especially important if the business owner plans to get third-party funding. Banks and investors want to see that the company has a realistic chance of becoming profitable before they’ll back the project.

For many business owners, the most intimidating part of starting a business is navigating the startup costs. But thankfully, understanding what expenses to expect can make it easier to budget for them.

An insurance adjusting business doesn’t require a physical storefront, so it’s possible to keep the startup costs reasonable. Even if the business owner does opt for a commercial location, they’ll still need to budget for expenses like professional licenses, equipment, and software.

Here’s a breakdown of some of the most common startup cost ranges for an insurance adjuster business.

Becoming a licensed adjuster serves as the primary requirement for starting this type of business. The license grants the legal authority to investigate and evaluate insurance claims on behalf of a carrier. Without this credential, an individual cannot legally operate as an adjuster in most jurisdictions.

Here is a quick look at the most common steps involved in this licensing process:

Many new business owners don’t realize how important it is to choose the right legal structure for their company. This is especially important in the insurance industry, where there’s always a certain amount of risk.

For example, what happens if an adjuster goes to inspect a storm-damaged roof and accidentally causes additional damage, and the business gets sued as a result? Worse, what if the business doesn’t have enough capital to cover the settlement?

The answer to those questions largely depends on how the insurance adjuster business is structured. If the business is a sole proprietorship, the business owner could be forced to pay for the damages from their personal assets and finances. That’s because sole proprietorships don’t offer personal asset protection.

In contrast, LLCs, or limited liability companies, do offer personal liability protection to the business owner. That’s why many new entrepreneurs ultimately decide on an insurance adjuster LLC. As an added plus, LLCs offer tax flexibility; the owner can choose whether to be taxed as a pass-through entity or as a corporation.

This guide has already covered the insurance adjuster license that the business owner needs to get personally. Now it’s time to address the licenses that the business entity needs. The tricky part is that these licenses can vary a lot depending on the business’s location.

For starters, the business itself might need an insurance adjuster business license. Not all states require a firm-specific license, but some do.

Another common requirement is a general business license. This license gives the company permission to operate in a particular jurisdiction, such as the state, county, or city (again, the specific requirements vary by location). If the business owner operates out of their home, they might need a home occupation permit to meet zoning requirements.

Ultimately, it’s a business owner’s responsibility to ensure that their company has all of the licenses it needs to operate compliantly.

Now that the insurance adjuster business has its legal framework and licenses, it’s time to get the day-to-day operations set up. This phase helps the business set up an efficient way to manage claims so the owner can serve their clients effectively from day one.

Here are some of the key operational tasks to tackle: