Queenslanders reeling from deadly flooding have been warned to be wary of “claim farmers” who often show up following disasters to assist with insurance claims.
Claim farmers present themselves as firms offering “claims management services” and act as a middleman between claimants and their insurance company for a fee.
The warning comes as severe flooding across the east coast of Australia has claimed the lives of 13 Queenslanders and eight people from New South Wales thus far. The current conditions are prime for these firms to target vulnerable flood victims.
“Many of these claims farmers entice customers to use their services by offering a free inspection, promising your claim will go to the front of the queue or promising a guaranteed cash settlement.
“Sadly, we have also heard of cases where Queenslanders have been given the impression the person is from government or acting on a law firm’s behalf.”
It’s important for Queenslanders to understand that an intermediary is not required and that they can deal directly with their insurer, the minister said.
“If you are thinking about signing up to a claims management service, it’s so important you understand the risks,” she said.
“And importantly, you should not sign anything which prevents you from dealing directly with your insurer, broker, financial adviser or your own lawyer.”
There are numerous associated risks using the services of claim farmers related to the way in which they operate.
Firms will often negotiate for a cash settlement with the insurance company, which could lead to problems such as losing the option to negotiate repairs or being left out of pocket where repair costs are uncertain.
Claim farmers may intentionally overestimate the value of a claim to inflate their own fee causing lengthy delays as they attempt to negotiate unrealistic amounts with insurers.
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