Paying an independent expert for a flood claim in Australia

The tasks that make up a flood engagement

The first job is to confirm what the policy covers. Since the standard definition of flood was introduced for home insurance, most retail policies describe flood in a consistent way, but whether you hold flood cover at all, and how storm water, run-off and actions of the sea are treated, still varies between products. Your assessor checks the policy schedule, the product disclosure statement and the Key Facts Sheet.

Next comes evidence on cause and extent: water lines, rainfall and river gauge data, neighbour statements, photos and sometimes a hydrologist's opinion. Then the costing: drying and mould remediation, stripping of wall linings, electrical inspections, flooring, cabinetry, contents, vehicles if covered, and temporary accommodation. The final phase is negotiation with the insurer's adjuster and builder, often over several rounds when repair prices rise after a widespread event.

Indicative fee bands for flood claims

Australia has no official fee schedule for policyholder assessors. The table on this page is an order of magnitude observed on the market, not a regulated or legal scale, and it should be read as a starting point for discussion. Fees decline in percentage terms as claims become larger. Amounts exclude GST.

Indicative amounts, to be checked with each expert.

How assessors structure their charges

Flood work lends itself to several pricing models, depending on whether the dispute is about cover or about quantum.

• Percentage of the total amount paid by the insurer
• Percentage of the uplift over the insurer's original decision, popular when a claim was initially declined
• Fixed fee for a cover review or to challenge a denial on the flood definition
• Hourly rates when only a technical report or second opinion is needed
• Minimum fee to cover the fixed cost of inspections and reports
• Disbursements for hydrologists, mould specialists or electricians, with GST added

Declined claims and success-based fees

If the insurer has declined the claim, for example because it considers the damage was caused by flood and you have no flood cover, the assessor's challenge is on liability rather than on numbers. Some firms take such matters on a success basis, charging a higher percentage only if the decision is reversed. That can make sense, but read the terms carefully: the fee may apply to the whole settlement, not just the disputed part, and there may be a charge if you withdraw. Remember that AFCA is a free route for reviewing a declined claim and that you do not need an adviser to lodge a complaint.

Will any of it be reimbursed?

Retail home and contents policies rarely pay for a policyholder's own assessor. Commercial policies may include a claims preparation costs extension that reimburses reasonable professional fees for preparing a claim, typically within a set limit and subject to the insurer's conditions. Strata and body corporate policies vary; the owners corporation should check its wording before appointing an assessor on behalf of all lot owners.

Separate from your adviser's fee, check what the policy pays for drying, cleaning, debris removal and temporary accommodation. These items are part of the claim itself rather than the cost of preparing it. A good assessor will make sure they are claimed in full, and a fair engagement letter will state whether the percentage applies to them.

Worked examples at three scales

Shallow water through a ground floor might generate a 35,000 AUD claim for flooring, skirting and some contents. An indicative 12 to 15 percent fee would be around 4,200 to 5,250 AUD before GST. For a claim like this, a fixed-fee review of the insurer's scope may offer better value.

A house inundated to about one metre, with linings, kitchen, electrics and most contents affected, could produce a claim of 280,000 AUD. A fee in the region of 6 to 9 percent gives roughly 16,800 to 25,200 AUD before GST.

A commercial warehouse flooded with stock, racking and plant damage, plus an interruption claim, might reach 3,500,000 AUD. Terms at this level are usually negotiated, perhaps 2 to 4 percent, and frequently include caps or staged fees aligned with progress payments.

What increases or reduces the cost

The main cost drivers are the nature of the dispute and the scale of the event. A claim where cover is accepted and only repair costs are in question is generally cheaper to handle than a disputed cause of loss. After widespread flooding, inspections take longer to arrange, builders are scarce and prices move, which can extend the engagement and add rounds of negotiation. Mould, contamination and repeated flooding of the same property also add complexity. On the other hand, quick photographs, early drying and well-kept receipts reduce the time your assessor must spend.

Repeat flooding raises a particular issue. If your property flooded before and was not fully repaired, the insurer may argue that some damage pre-dated the latest event. Separating old and new damage takes careful evidence, and it is one of the situations where an assessor's hourly work can pay for itself, or where the cost can escalate. Ask for a cap.

Reading the offer and comparing firms

After a flood, door-knocking and aggressive marketing are common. Ask any firm to put its terms in writing, confirm its licensing for claims handling and give you time to consider. Compare at least two proposals on the same basis: rate, fee base, minimum, disbursements, GST, termination terms and what happens if the insurer pays nothing.

Be sceptical of guarantees. No assessor can promise that a declined flood claim will be paid or that a settlement will rise by a given amount. What a good assessor can offer is a methodical file, a clear argument and realistic advice on when to accept an offer or escalate.

Flood claims can be stressful and technical, so a transparent fee agreement is essential. Compare offers calmly, use the free complaint routes where they suffice, and refer to expertdassure.com for the full Australian flood claim process.