Claims Examiner and Investigator Careers

Significant Points

  • Employment is concentrated in insurance-related industries.
  • Training and entry requirements vary widely.
  • College graduates and those with related experience should have the best opportunities for most types of jobs; competition will be keen for jobs as investigators.
  • Job opportunities should be best in health insurance companies, and in regions susceptible to natural disasters.

Nature of the Work

Individuals and businesses purchase insurance policies to protect against monetary losses. In the event of a loss, policyholders submit claims, or requests for payment, seeking compensation for their loss. Examiners and investigators deal with those claims. They work primarily for property and casualty insurance companies, for whom they handle a wide variety of claims alleging property damage, liability, or bodily injury. Their main role is to investigate claims, negotiate settlements, and authorize payments to claimants, who are the policyholders who make a claim. They must be mindful not to violate their rights under Federal and State privacy laws. They must determine whether the customer's insurance policy covers the loss and how much of the loss should be paid. Although many examiners and investigators have overlapping functions and may even perform the same tasks, the insurance industry generally assigns specific roles to each of these claims workers.

Claims examiners within property and casualty insurance firms may have duties similar to those of an adjuster, but often their primary job is to review claims after they are submitted in order to ensure that proper guidelines have been followed. They may assist adjusters with complicated claims or when, for instance, a natural disaster suddenly greatly increases the volume of claims.

Most claims examiners work for life or health insurance companies. In health insurance companies, examiners review health-related claims to see whether costs are reasonable given the diagnosis. They use guides that have information on the average period of disability, expected treatments, and average hospital stays for various ailments. Examiners check claim applications for completeness and accuracy, interview medical specialists, and consult policy files to verify the information reported in a claim. They then authorize appropriate payment, deny the claim, or refer the claim to an investigator for a more thorough review. Claims examiners usually specialize in group or individual insurance plans and in hospital, dental, or prescription drug claims.

In life insurance, claims examiners review the causes of death, particularly in the case of an accident, since most life insurance policies pay additional benefits if a death is accidental. Claims examiners also may review new applications for life insurance to make sure that the applicants have no serious illnesses that would make them a high risk to insure.

Another occupation that plays an important role in the accurate settlement of claims is that of the appraiser, whose role is to estimate the cost or value of an insured item. The majority of appraisers employed by insurance companies and independent adjusting firms are auto damage appraisers. These appraisers inspect damaged vehicles after an accident and estimate the cost of repairs. This information is then relayed to the adjuster, who incorporates the appraisal into the settlement.

When examiners suspect fraud, they refer the claim to an investigator. Insurance investigators handle claims in which the company suspects fraudulent or criminal activity, such as arson, falsified workers' disability claims, staged accidents, or unnecessary medical treatments. The severity of insurance fraud cases can vary greatly, from claimants simply overstating damage to a vehicle to complicated fraud rings supported by dishonest doctors, lawyers, and even insurance personnel.

Investigators usually start with a database search to obtain background information on claimants and witnesses. Investigators can access personal information and identify Social Security numbers, aliases, driver's license numbers, addresses, phone numbers, criminal records, and past claims histories to establish whether a claimant has ever attempted insurance fraud. Then, investigators may visit claimants and witnesses to obtain an oral statement, take photographs, and inspect facilities, such as doctors' offices, to determine, for example, whether the doctors have a proper license. Investigators often consult with legal counsel and can be expert witnesses in court cases.

Often, investigators also perform surveillance work. For example, in a case involving fraudulent workers' compensation claims, an investigator may covertly observe the claimant for several days or even weeks. If the investigator observes the subject performing an activity that is ruled out by injuries stated in a workers' compensation claim, the investigator will take photos to document the activity and report it to the insurance company.

Work environment. Working environments of claims examiners and investigators vary greatly. Most claims examiners employed by life and health insurance companies work a standard 5-day, 40-hour week in a typical office environment. In contrast, adjusters often must arrange their work schedules to accommodate evening and weekend appointments with clients. This sometimes results in adjusters working irregular schedules, especially when they have a lot of claims to scrutinize. Adjusters are often called to work in the event of emergencies and may have to work 50 or 60 hours a week until all claims are resolved.

Some days, investigators will spend all day in the office, searching databases, making telephone calls, and writing reports. Other times, they may be away, performing surveillance activities or interviewing witnesses. Some of the work can involve disagreements with claimants, so the job can be stressful and potentially confrontational. Insurance investigators often work irregular hours because of the need to conduct surveillance and contact people who are not available during normal working hours. Early morning, evening, and weekend work is common.

Training, Other Qualifications, and Advancement

Training and entry requirements vary widely. Although many in these occupations do not have a college degree, most companies prefer to hire college graduates, or those with some insurance-related work experience or vocational training.

Education and training. There are no formal education requirements for any of these occupations, and a high school degree is typically the minimal requirement needed to obtain employment. However, most employers prefer to hire college graduates or people who have some insurance-related work experience or vocational training.

While a variety of degrees can be an asset, no specific college major is recommended. For example, a claims adjuster who has a business or an accounting background might be suited to specialize in claims of financial loss due to strikes, breakdowns of equipment, or damage to merchandise. College training in architecture or engineering is helpful in adjusting industrial claims, such as those involving damage from fires or other accidents. A legal background can be beneficial to someone handling workers' compensation and product liability cases. A medical background is useful for those examiners working on medical and life insurance claims.

While auto damage appraisers are not required to have a college education, most companies prefer to hire persons with formal training, previous experience, or those with knowledge and technical skills who can identify and estimate the cost of repair. Many vocational colleges offer 2-year programs in auto body repair and teach students how to estimate the costs to repair damaged vehicles.

For investigator jobs, most insurance companies prefer to hire people trained as law enforcement officers, private investigators, claims adjusters, or examiners because these workers have good interviewing and interrogation skills.

Beginning claims examiners and investigators work on small claims under the supervision of an experienced worker. As they learn more about claims investigation and settlement, they are assigned larger, more complex claims. Trainees take on more responsibility as they demonstrate competence in handling assignments and progress in their coursework. Auto damage appraisers typically receive on-the-job training, which may last several months. This training usually involves of working under close supervision while estimating damage costs until the employer decides the trainee is ready to perform estimates on their own.

Continuing education is very important for claims examiners and investigators because Federal and State laws and court decisions affect how claims are handled and the scope of insurance policies. Also, examiners working on life and health claims must be familiar with new medical procedures and prescription drugs. Examiners working on auto claims must be familiar with new car models and repair techniques.

Many companies offer training sessions to inform their employees of industry changes, and a number of schools and associations give courses and seminars on various topics having to do with claims. Online courses are also making distance learning possible.

Licensure. Licensing requirements for claims examiners and investigators vary by State. Some States have few requirements, while others require either the completion of pre-licensing education, a satisfactory score on a licensing exam, or both. Earning a voluntary professional designation can sometimes substitute for completing an exam. In some States, claims adjusters employed by insurance companies can work under the company license and need not become licensed themselves. Public adjusters may need to meet separate or additional requirements. For example, some States require public adjusters to file a surety bond-a unique contract between at least three parties.

Some States that require licensing also require a certain number of continuing education credits per year in order to renew the license. Workers can fulfill their continuing education requirements by attending classes or workshops, by writing articles for claims publications, or by giving lectures and presentations.

Other qualifications. Claims examiners often work closely with claimants, witnesses, and other insurance professionals, so they must be able to communicate effectively with others. Knowledge of computer applications also is very helpful. In addition, a valid driver's license and a good driving record are required for workers who must travel on the job. Some companies require applicants to pass a series of written tests designed to measure their communication, analytical, and general mathematical skills.

When hiring investigators, employers look for individuals who have ingenuity and who are persistent and assertive. Investigators should not be afraid of confrontation, should communicate well, and should be able to think on their feet. Good interviewing and interrogation skills also are important and usually are acquired in earlier careers in law enforcement.

Certification and advancement. Employees who demonstrate competence in claims work or administrative skills may be promoted to more responsible managerial or administrative jobs. Similarly, claims investigators may rise to become supervisor or manager of the investigations department. Once they achieve expertise, many choose to start their own independent adjusting or auto damage appraising firms.

Numerous examiners and adjusters choose to earn professional certifications and designations to demonstrate their expertise. Although requirements for these designations vary, some entail a minimum number of years of experience and the successful completion of an examination; in addition, a certain number of continuing education credits must be earned each year to retain the designation.

Job Outlook

Overall employment is expected to increase as fast as average. For claims adjusters and examiners, opportunities will be best with health insurance companies. For appraiser jobs, opportunities will be best for those who have some vocational training and previous auto body repair experience. Keen competition is expected for investigator jobs as the number of applicants typically outnumbers the number of positions available.

Employment change. Employment of claims examiners and investigators is expected to grow by 7 percent over the 2008-18 decade, as fast as average for all occupations. Employment growth of adjusters and claims examiners will primarily stem from the growth of the health insurance industry. Rising healthcare premiums and attempts by large insurance carriers to minimize costs will result in a greater need for claims examiners to more scrupulously review a growing number of medical claims. More claims being made by a growing elderly population also should spur demand for adjusters and claims examiners. Although technology is reducing the amount of time it takes for an adjuster to complete a claim, thereby increasing the number of claims that one adjuster can handle, demand for these jobs will increase anyway because many tasks cannot be easily automated.

Employment of insurance investigators is not expected to grow significantly, despite the expected increase in the number of claims in litigation and complexity of insurance fraud cases. Efficiencies gained through the Internet will continue to reduce the amount of time it takes investigators to perform background checks, allowing them to handle more cases.

Little to no change in employment of auto damage appraisers is expected. Despite a growing number of drivers and auto insurance policies being sold by insurance companies, the number of claims being filed is not expected to increase as much as the number of policies as efforts to make vehicles, roads, and highways safer will yield a decrease in the number of claims per policy.

Job prospects. Job opportunities for claims adjusters and examiners will be best in the health insurance industry as the industry seeks to minimize the number of paid claims, and in areas susceptible to natural disasters, such as the Gulf coast or West coast. Hurricanes in Florida or wild fires in California, for example, will continue to spur demand, and opportunities with smaller independent firms will be particularly good. And while technology has made the work more efficient, workers will still be needed to contact policyholders, inspect damaged property, and consult with experts. Numerous job openings also will result from the need to replace workers who transfer to other occupations or leave the labor force. College graduates and those with previous related experience should have the best opportunities for jobs as claims adjusters, examiners, and investigators. Auto damage appraisers with related vocational training and auto body shop experience should have the best prospects. People entering these occupations with no formal training may find more opportunities with large insurance companies rather than small independent firms who prefer to hire experienced workers.

Competition for investigator jobs will remain keen because the occupation attracts many qualified people, including retirees from law enforcement, the military, and experienced claims adjusters and examiners who choose to get an investigator license. Heightened media and public awareness of insurance fraud also may attract qualified candidates to this occupation.