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Insurance Claims Management Services

Should I hire a claims management service to help run my claim?

You may be considering using an insurance claims management business – a for-profit  service that will represent you for a fee, and do the leg work on your insurance claim. Before you decide to sign up to one of these business – you should understand the risks involved and consider the alternatives.

WARNING: Consumers should read this factsheet before using an insurance claims management service.


  • You may not need to as there are free resources to help you
  • If you are going to engage a company to manage your claim, make sure that you understand how they will be paid and how much (flat fee or as a percentage of your settlement), ask for independent references and to see any contract before you agree.

Having an insurance claim can be daunting, policies can be complex and full of jargon, and it can feel like the insurer is giving you the run around. There are free services for legal advice or information about your rights in most states (see below), but not everyone can get free help to run their claim from start to finish. It can seem like a great idea to pay someone to negotiate the claims maze for you, and there seem to be more and more businesses appearing to do just that through the internet, or even turning up at your door.

 What’s the harm?

Claims management services typically work for a percentage of any cash settlement offered by the insurance company. They may not have legal qualifications.

The risks for you could be:

  • If they seek a cash settlement as the resolution. This may not always be fair as it means you lose the option for the insurer to do the works. Insurers offer guarantees (sometimes for life) on the works they do. Also, they manage the repair process which can sometimes be complicated. There are also times that the repair costs are uncertain which means a cash settlement may leave you out of pocket. Therefore, you need to be sure that accepting a cash settlement is in your best interests, not just in the interests of the claims management service to get their fee;
  • they unreasonably enlarge or inflate your claim, therefore increasing their own fee. This could work in your favour, but it could also backfire if they drag out your claim unnecessarily, by arguing for an unrealistic amount;  
  • the service you hire might not have the resources to undertake all the work they agreed to do if they take on too many clients.

From 1/1/2022, claims management firms are now required an Australian Financial Services License, and this means these companies have some minimum obligations such as:

  1. acting efficiently, honestly and fairly;
  2. maintain competence in providing services; and
  3. be a member of the Australian Financial Complaints Authority.

CHECKLIST: If you decide to engage a fee-for-service claims management, make sure you:   

  • Ask up front what the cost is before you provide any payment details such as your credit card or agree to the service by signing a contract, or agreeing to retain the service over the phone.
  • Obtain a copy of the contract and read it carefully. Seek independent advice if you are unsure about any terms.
  • Ask how do they calculate their fee? Is it a percentage of your claim or a flat fee? Ask about how will you pay the fee paid if the insurer does the repairs for you, instead of cash settling? What happens if you prefer for the insurer to do the repairs?
  • Ask what happens if your insurance claim is unsuccessful or less successful then what they promised? Or if you aren’t happy with the service part-way through?
    • Do you still have to pay for the claims service?
    • How do they calculate their fee if the insurance claim is not fully paid?  
  • What are their experience and qualifications?  
  • Have they provided you a written scope of the work they are going to do or will they agree to do so before you have to sign a contract with them?
  • Are you authorising them to launch legal proceedings or a complaint to AFCA on your behalf? Do they need to get your permission before they do so? Will they charge you a fee for accessing AFCA (noting AFCA is free and accessible to consumers)?

What’s the alternative? How do you run your own claim?

The Australian Financial Complaints Authority (AFCA) is a free and independent complaints service for consumers.  If you are not getting anywhere with your insurer, you can:

  1. Go through the insurer’s own complaints service, search for contact details here:
  2. Lodge a free complaint with AFCA (, 1800 931 678).  AFCA can investigate your complaint, try to help negotiations between you and the insurer, and ultimately make a decision that is binding on the insurer (if you choose to accept it). 

AFCA is set up so that people can run their own complaints.  You do not need a lawyer or anyone to represent you, but it is usually a good idea to get some advice from one of the free legal services below so you understand what arguments and evidence you should provide to AFCA to support your complaint.  AFCA is the decision maker and needs to stay independent, so cannot give you or the insurer advice.

For more information, see our Dispute Resolution factsheet here:


Financial Rights Legal Centre

  • Insurance Law Service                    1300 663 464
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If you can’t get through on our busy phone lines you can email us through our website:

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Australian Financial Complaints Authority: 1800 931 678

Legal Aid NSW’s Disaster Response Legal Service: 1800 801 529

Victoria Legal Aid have the Disaster Legal Help Victoria 1800 133 432

Updated March 2022