Fire and bushfire claims in Australia: understanding loss assessor fees

Why fire claims demand so much work

Fire damage is rarely confined to what burned. Smoke and soot travel through roof cavities and ducts, firefighting water soaks floors and walls, and heat can weaken structural elements that look intact. A thorough assessor documents all of it, often with a builder, structural engineer, hygienist or electrician, before any demolition removes the evidence.

The fee also pays for the contents side of the claim, which is typically long and tedious: room-by-room inventories, replacement values, proof of ownership and depreciation arguments. Then come alternative accommodation, debris removal, demolition, professional fees for architects and certifiers, and, after bushfires, the extra costs of building to the bushfire attack level required for the site. Each of these heads of claim has its own policy limits and its own potential for dispute.

An indicative AUD scale for fire claims

Fees for policyholder loss assessors are not regulated by any official schedule in Australia. The table on this page gives an indicative order of magnitude observed on the market, not a legal or binding scale. It follows the familiar sliding logic: the larger the claim, the lower the percentage, because a share of the work is fixed whatever the amount. Figures exclude GST.

Indicative amounts, to be checked with each expert.

Choosing between fee models

Most fire claims handled by assessors are priced as a percentage of the settlement, but it is worth knowing the alternatives and the details that sit underneath them.

• Percentage of total settlement across building, contents and additional costs
• Separate percentages for building and contents, reflecting different workloads
• Percentage applied only to the improvement over the insurer's first offer
• Fixed fee for a defined task, such as preparing a contents schedule
• Hourly rates for a second opinion on the insurer's scope of works
• Minimum fee, disbursements for engineers or hygienists, and GST on top

Does the percentage apply to temporary accommodation?

This is a detail many people overlook. Some engagement letters apply the fee to every dollar the insurer pays, including emergency payments, temporary accommodation and amounts the insurer had already approved before the assessor arrived. Others exclude those items. Ask for a written list of what the fee will and will not be calculated on, and negotiate exclusions for payments made before the engagement began.

Reimbursement through your policy

Home insurance policies in Australia generally do not pay for an assessor you choose yourself, although they normally cover professional fees connected to rebuilding, such as architects, engineers and surveyors, within limits. Those are different from claim preparation fees.

For commercial premises, look for a claims preparation costs extension in the policy. Where it exists, it may reimburse some or all of the reasonable fees for preparing the claim, up to a stated limit and usually subject to conditions such as prior consent. If cover applies, prefer an engagement structure that produces invoices the insurer can readily assess.

Business owners should also remember that a fire usually triggers a business interruption claim alongside the property claim. If one firm handles both, ask whether a single blended rate applies or separate rates for each section, and whether accounting work is included or billed as a disbursement. A blended rate can be simpler, but it should not load interruption amounts with a property-style percentage when the work involved is different.

Cost examples from small fire to total loss

A contained kitchen fire with smoke damage to adjoining rooms might produce a claim of 40,000 AUD. At an indicative 12 percent, the assessor's fee would be about 4,800 AUD plus GST. Before signing, weigh that against the realistic gap between the insurer's offer and the true cost of repairs.

A house severely damaged by fire, with a combined building and contents claim of 450,000 AUD, could attract an indicative 6 to 9 percent, or 27,000 to 40,500 AUD before GST. Here, a careful contents schedule and a challenge to an undervalued rebuild estimate can make a large difference.

A total loss of a rural property and outbuildings in a bushfire, with a claim of 1,800,000 AUD, would normally be priced on negotiated terms, perhaps 3 to 5 percent, so 54,000 to 90,000 AUD before GST. Industrial fires involving stock, plant and business interruption are usually quoted individually, often with fee caps.

Price drivers specific to fire

Several features make one fire claim more expensive to manage than another. A disputed cause of fire, especially where the insurer is investigating the circumstances, adds substantial work. So do underinsurance, a cash settlement versus rebuild decision, heritage or bushfire-zone building requirements, hazardous materials such as asbestos, and the volume of contents. After catastrophe bushfires, shortages of builders and rising prices can force repeated revisions of estimates, which also lengthens the engagement.

Contents-heavy claims deserve a specific conversation. Preparing a detailed inventory for a family home can take dozens of hours, and some firms price that work separately from the building claim. If you are willing to draft the inventory yourself with their template, ask whether the rate can be reduced accordingly.

Spotting a fair proposal

Fire victims are often approached quickly by firms offering to take over the claim. Take time to compare at least two proposals, and do not sign while in shock or under pressure. A reputable firm will accept that you review its terms, and should explain its licensing for claims handling services.

Check that the engagement letter states the fee base, rate, minimum, GST, disbursements, termination rights and what is owed if the claim is declined. Be cautious with any promise of a specific settlement or a guaranteed uplift. The insurer decides what it pays, and only evidence and the policy wording can move that figure.

• Is the fee on total settlement or only on the uplift?
• Are emergency and accommodation payments excluded?
• Who pays for engineers, hygienists and builders' quotes?
• Is there a cap for very large claims?

After a fire, a clear and fair fee agreement lets you focus on recovery rather than on the cost of help. Use expertdassure.com to understand the fire claim process itself before choosing who represents you.