The End of an Era: How State Farm’s Shift is Reshaping the Independent Adjuster Industry

For decades, the independent adjuster (IA) business has been a cornerstone of the insurance claims industry, providing critical surge capacity in the wake of natural disasters. But the tides are shifting. State Farm, the largest home and auto insurer in the U.S., has quietly accelerated a move that could permanently alter the landscape for independent adjusters and the firms that employ them.

In an internal email circulated among adjusters at Eberl Claim Services, a major IA firm, Senior Vice President Doug Edens delivered grim news: State Farm has all but eliminated its need for independent adjusters in 2024. The reason? A strategic shift toward in-house claims handling, a move that has been in the works for years.

The implications of this decision are profound—not just for Eberl, but for the entire IA industry, including stalwarts like Alacrity, EA Renfroe, and Pilot Catastrophe.

A Shift Years in the Making

State Farm’s decision is not an isolated event. Over the past two years, the insurer has aggressively expanded its in-house claims team, adding thousands of staff adjusters. This marks a clear transition away from the traditional IA model, which historically provided insurers with the flexibility to scale up during catastrophic events without carrying the overhead of a full-time workforce.

The shift comes amid a broader trend in the insurance industry. Carriers have increasingly invested in centralized claims processing, automation, and AI-driven assessments. The result? A diminished need for the independent adjusters who once formed the backbone of catastrophe response efforts.

What This Means for Independent Adjusting Firms

For IA firms, State Farm’s pivot represents a fundamental challenge. The insurer has long been a key client for many of these firms, sending waves of adjusters into the field whenever disaster struck. Without that volume, firms like Eberl, Alacrity, and Pilot must now scramble to replace lost revenue and redeploy their adjuster base.

Eberl, for its part, has emphasized diversification, citing ongoing efforts to secure contracts with other carriers and expand service offerings. But the reality remains: if the largest insurer in the country no longer sees value in independent adjusters, others may follow.

The Broader Impact on Adjusters

For individual adjusters—many of whom have built careers around catastrophe deployments—the outlook is uncertain. While some may find work with smaller regional carriers or pivot to other industry roles, the days of steady deployments from major insurers appear to be dwindling.

And this trend isn’t just about State Farm. As other carriers reassess their claims models, independent adjusters could find themselves squeezed out entirely. The industry has weathered downturns before, but this moment feels different. This isn’t a temporary lull in storm activity—it’s a structural change in how insurers handle claims.

Is This the End of the IA Model?

While it may be premature to declare the complete death of the independent adjuster model, the writing is on the wall. Firms that once thrived on catastrophe deployments must now reinvent themselves or risk obsolescence. Those that succeed will likely do so by diversifying into third-party administration, desk adjusting, or even technology-driven claims solutions.

For independent adjusters, the choices are starker: adapt, transition, go staff, or exit the field altogether. The golden age of catastrophe adjusting, propped up by major carrier contracts, may well be over. And in its place, a more centralized, data-driven, and in-house claims model is rapidly taking hold.

State Farm has made its move. The question now is: who will be next?