One consumer myth that many adjusters confront is the idea thatclaim people get paid by how much they “save” on a given claim. Asif adjusters get a commission if they can settle a $20,000 auto orhomeowners claim for, say, $10,000.

Although this fantasy always seemed farfetched, some insurancecompanies do link adjusters' incentive compensation to broaderfinancial goals that the company wants to hit. In sucharrangements, an adjuster's base compensation may be fixed, but theclaim person earns extra incentive income, depending on the companyor claim unit's ability to meet certain financial targets.

Say that an adjuster's base pay is $50,000 per year. Anincentive comp plan might pay adjusters an extra 15 percent bonusif the claim department drops its loss ratio from 79 percent to 74percent, or achieves a 10 percent reduction in loss payments fromthe prior year. If adjusters meet these goals, they will get anextra $7,500 in contingent or incentive income for the year. Thatis enough to get the attention of many claim people.