How much an independent advocate charges for a fire claim in New Zealand

Tasks the advocate is paid to carry out

For a fire, the advocate's work typically starts with the policy: sum insured, settlement basis for building and contents, accommodation cover and any limits on items such as jewellery or tools. Then comes a detailed inspection, often with restoration specialists, to map not just burnt areas but smoke migration and water damage.

From there, the advocate prepares or reviews the building scope, helps compile and price the contents inventory, collects supporting documents, negotiates with the loss adjuster and monitors payments and accommodation entitlements until the claim is closed.

Building and contents can be priced differently

Some advocates apply one percentage across the whole claim. Others charge a percentage on the building component and a separate fee for the contents, recognising that a contents inventory is labour-intensive but sometimes of lower value. Make sure you know which approach is proposed and whether accommodation payments are included in the fee base.

Indicative amounts, to be checked with each expert.

Indicative fee table for fire claims

Percentages usually decrease as the claim grows. The ranges below reflect an indicative order of magnitude observed on the New Zealand market. They are not an official or legal scale, and actual quotes may sit outside them depending on complexity and the stage at which the advocate is engaged.

Figures are exclusive of GST at 15 percent. Restoration testing or specialist reports may be billed separately.

Fee models you will come across

Before comparing rates, confirm the basis on which each one is calculated.

• Percentage of the total amount paid by the insurer for building, contents and other heads of claim
• Percentage of the improvement over the insurer's offer, often used when the advocate joins after an offer is made
• Fixed fee for a contents inventory or a scope review only
• Hourly rate for advisory sessions, document review or a limited role
• Minimum fee ensuring a basic level of payment on smaller claims
• Disbursements for travel, testing, specialist reports and printing

Does insurance cover the advocate's fee?

Residential policies in New Zealand commonly pay professional fees linked to reinstatement, such as architects, engineers and consents, and may cover demolition and debris removal. They rarely cover an advocate engaged by the policyholder to negotiate the claim, so plan on meeting that cost yourself.

Commercial policies sometimes include a claims preparation costs extension, subject to a sub-limit. It may be limited to accountants' fees or may exclude loss assessor fees, and some insurers require approval before costs are incurred. Read the wording and ask in writing if you are unsure.

If the fire was caused by a third party, such as a neighbour's property or a faulty product, the insurer may pursue recovery after paying your claim. Your advocate's fee normally remains between you and the advocate and is not part of that recovery, unless a court later awards costs.

Scale of loss and what it means for fees

A kitchen fire with limited spread may be best handled with a fixed-fee scope review, since a percentage could absorb much of any improvement. A fire affecting most of a home, with contents losses and months of displacement, usually justifies a full mandate. Total losses and commercial fires involve high values, lower percentages and often a negotiated cap.

Timing also affects the cost. An advocate engaged in the first days can shape the scope from the start, while one engaged after a disputed offer may need to unpick earlier assessments. Early engagement often suits a percentage on the total, whereas late engagement is better matched with a fee on the uplift. Either way, ask for an estimate of how long the claim is likely to take and how fees would be handled if it runs much longer than expected.

Example: a house fire in the Waikato

Consider a fire that destroys the kitchen and living areas of a Hamilton home and smoke-damages the rest. The insurer initially offers NZ$210,000 for the building and NZ$45,000 for contents. With the advocate's help, smoke remediation of the whole house, code upgrades and a fuller contents inventory are accepted, and the claim settles at NZ$275,000 for the building and NZ$78,000 for contents.

At 8 percent of the full NZ$353,000, the fee would be NZ$28,240 plus GST, about NZ$32,476. Under a split structure, 7 percent of the building settlement plus a fixed NZ$4,500 for the contents inventory would come to NZ$23,750 plus GST, about NZ$27,313. These figures are only an illustration.

Comparing firms and reading the engagement

Obtain more than one written proposal and compare them on the same scenario. Experience with fire and smoke claims, relationships with restoration specialists and the seniority of the person running your file count as much as the rate.

Fires attract unsolicited approaches, sometimes within hours. Do not sign under pressure, and be wary of any promise of a guaranteed payout or a suggestion to exaggerate losses, which can jeopardise the entire claim.

• Fee basis, rate, minimum and GST treatment stated clearly
• Whether accommodation payments and contents are included in the fee base
• Point at which the fee is payable and how it is collected
• List of included services and separately charged items
• Cancellation terms, including any cooling-off period

Room to negotiate

If the insurer has already made a reasonable offer, propose a fee on the improvement only. For large claims, ask for a stepped rate or a total cap. Where you can handle the contents list yourself with guidance, ask for a reduced fee covering the building claim alone.

A transparent fee base and a realistic plan for the building and contents claims help keep the cost of independent support in proportion. Use the expertdassure.com ranges as a reference point when you discuss quotes.