Fee hunters lured by $1.6 billion in flood claims
Insurance claims from the ongoing flood disaster have topped $1.6 billion, and “claims farmers” are seeking lucrative fees from victims.
Some 107,844 claims have been lodged so far in southeast Queensland and New South Wales, the Insurance Council of Australia said on Wednesday.
Based on previous flooding, the estimated current cost of claims is now $1.62 billion.
Queensland Attorney General Shannon Fentiman has warned flood victims to beware of claims handling agents, some claiming to be from the government, offering help with insurance paperwork.
“Many of these farmers entice customers to use their services by offering a free inspection, promising your claim will go to the front of the line, or promising a guaranteed cash settlement,” she said.
Insurance Council CEO Andrew Hall said floods had cost Australia $20 billion since the 1970s and the current disaster would be one of the biggest and costliest events.
“We have to think about mitigation, dams, levees, raising houses above the maximum flood stage,” Hall said.
“We are heading towards a very large insurance bill for this event, so we are watching it carefully.”
By subscribing to a claims management service, the victims lose the possibility for their insurer to organize the often complicated repairs and the guarantees on the work they carry out.
People can be left behind, wait longer for claims to be resolved, and end up in court trying to resolve the issue.
“You should not sign anything that restricts you from dealing directly with your insurer, broker, financial advisor or your own attorney,” Ms. Fentiman said.
People who have lost documents or cannot remember their insurer can contact the Insurance Council for assistance.
Mr Hall said premiums will fall when risk is reduced by councils and governments.
“If we put people back in the same houses in the same places, we’ll see the cycle repeat itself,” he said.