# Does this sound dodgy? House flooded, approached by "broker" - 10% of claim



## 5Times (19 Sep 2008)

My parents have recently been flooded. They were given a business card by someone in the family of a "broker".. This guy is 10% commission, I think thats a bit much. The lower ground floor of the house is basically destroyed and it will be a large claim.


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## huskerdu (19 Sep 2008)

*Re: Does this sound dodgy*

I dont understand.  You haven't explained the situation at all. 

What service does this broker provide and his fee is 10% of what exactly?


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## 5Times (19 Sep 2008)

*Re: Does this sound dodgy*

Basically whatever my parents get the broker gets 10%, he's acting as a man in the middle, between my parents and the insurance company. All I want to know is if this is a normal practice and if its the normal rate.


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## DavyJones (19 Sep 2008)

*Re: Does this sound dodgy*

These "brokers" are all the rage now, I am constantly contacted by them to pass on custom (I run a plumbing and heating business). They offer me a percentage of the claim.  never used one so don't know how good they are.


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## LDFerguson (19 Sep 2008)

Not in the general insurance business so this is new to me, but it sounds suspect.  

Your parents insured their house.
They have a claim on their insurance.
Why would they need someone to mediate between them and the insurance company?  Just deal direct and save yourself 10%.  
Or if you used a broker to take out the insurance in the first place, the broker should be willing and able to help you through a claim.


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## 5Times (19 Sep 2008)

*Re: Does this sound dodgy*



DavyJones said:


> These "brokers" are all the rage now, I am constantly contacted by them to pass on custom (I run a plumbing and heating business). They offer me a percentage of the claim.  never used one so don't know how good they are.



Thanks for the replies, as matter of interest what sort of percentage were you offered?.
I now think my parents are been taken advantage of, too many things are starting to make sence now as I know that with a home insurance claim you just hear from the assessor, get your letter of the amount of the claim, confirmation of payment due and then the cheque. I thought this was dodgy from the very start but alot of information is being witheld from me due to my original suspicions of this not being general insurance practice.
Again, many thanks to you all for your replies.


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## Ravima (19 Sep 2008)

I would report broker to Insurer and Financial Regulator. This is not right. He is paid by insurer to place busines and may be carging policyholder a fee as well. He should NOT be taking anything out of  a claim.


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## 5Times (19 Sep 2008)

I am going to get his name and number off my father tomorrow and contact the Insurance and Financial regulator on Monday morning!. There is no way this person could be legit and to be honest I don't actually think he is a "broker", just some middle mad by the sounds of things.


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## DrMoriarty (19 Sep 2008)

Are you sure this isn't a (perfectly legitimate) loss assessor?


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## Bonaparte (19 Sep 2008)

May be totally unnecessary, however, my own parents were flooded recently and came across one of these guys and were very pleased with him. He met with the Insurance assessor and did all the negotiations. The eventual settlement was much more than they originally expected


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## 5Times (19 Sep 2008)

DrMoriarty said:


> Are you sure this is actually a broker and not a loss assessor?



But would a loss assessor be charging 10% of the settlement?. Any of them that I have looked up do not have a fee according to their website anyway, they get their commission of the insurance company don't they?.


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## 5Times (19 Sep 2008)

Bonaparte, were you parents charged a high fee for this?. It's the information we are getting is very dicey and the person that apparantly got them in touch with this guy is a complete dodgy individual that behaves like he climbed mount everest blind folded! You know yourself!


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## DrMoriarty (19 Sep 2008)

5Times said:


> ...anyway, they get their commission of the insurance company don't they?.


 
A loss adjuster is used by an insurance company to assess the value of a claim, particularly if there is a disagreement between the insurer and the insured. His/her job is to _reduce_ the amount claimed as far as possible, thereby saving the insurance company money.

A loss assessor can be employed by a claimant to value a loss and present the insurance company with a supporting case for this valuation. He/she obviously tries to _maximise_ the amount of the claim, since that determines his/her commission (10% + VAT is typical). 

You basically let the two of them fight it out. A competent assessor should be able to negotiate a better settlement than the company would be likely to agree to on their own terms, thereby earning his/her fee. But if you don't want to hire one, you don't have to.


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## Ris (20 Sep 2008)

Hi there

Claims management companies are a legitimate business and it is very usual to charge a 10% fee for their service. In fact many insurers these days offer this as part of their insurance policy, i.e. you can pay an extra amount on your premium to avail of their services should a claim arise. 

I know this because I am currently going through a claim for flood damage. In my case I am covered for the claims management fees up to a maximum of €15,000. After that the claims management company get 10% of the balance of the claim award.

The fee is for their service, i.e. they negotiate with the insurance company to get you the best deal possible. My experience so far has been that I'm glad I paid the extra few bob to avail of their services! Insurance claims are a bit of a minefield!

It seems like in this case your parents are being offered a service. If they choose this service then the 10% is the fee they will have to pay. Of course they can decide to negotiate with the insurance company themselves and that is their right.


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## purplealien (20 Sep 2008)

10 per cent is correct to the best of my knowledge as we were quoted the same this week for a job on our house


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## Complainer (20 Sep 2008)

DrMoriarty said:


> since that determines his/her commission (10% + VAT is typical).


 


Ris said:


> Claims management companies are a legitimate business and it is very usual to charge a 10% fee for their service.


 


purplealien said:


> 10 per cent is correct to the best of my knowledge as we were quoted the same this week for a job on our house


So much for free market competition - Doesn't anyone negotiate on fees? Why not structure to contract to give him 10% of everything over a threshold?


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## sam h (20 Sep 2008)

It's most likely a loss assessor.

We used one after a leak.  Our untrained eye probably would have only claimed for the flooring....but he put in for repapering, new skirting (due to damage trying to get to the leak) & a few other thing that I NEVER would have thought about & the insurance company would not have told me about.  

He more than earned his 10%!!  If it a straight forward cliam, with just one item affected, then you probably don't need one.  But with larger jobs and possible knock on effects, they can offer a good service.


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## Ravima (20 Sep 2008)

Loss assessor is entitled to a fee for processing the claim. however YOUR BROKER is not. Report and let us have feedback.


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## Ed054 (21 Sep 2008)

I am a Loss Assessor and I have never heard of a Broker acting in this manner.
This should be reported to the Financial Regulator.
At the very least this person is in breech of The Consumer Protection Code.


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## DrMoriarty (21 Sep 2008)

5Times said:


> There is no way this person could be legit and to be honest I don't actually think he is a "broker", just some middle mad by the sounds of things.


I think the whole point here is that the OP (or maybe the person who referred this guy — 'a complete dodgy individual that behaves like he climbed mount everest blind folded'?) may have got his merms tuddled.


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## Bonaparte (21 Sep 2008)

5Times said:


> Bonaparte, were you parents charged a high fee for this?. It's the information we are getting is very dicey and the person that apparantly got them in touch with this guy is a complete dodgy individual that behaves like he climbed mount everest blind folded! You know yourself!


 
Hi, Parents charged ten per cent of settlement and they were very happy with the outcome and the fact that they did not have to be involved with the insurance company at all


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## Bronte (22 Sep 2008)

I've used a loss assessor/adjuster in the past with a claim as they can negotiate a higher figure with the insurance company.  They do the fighting with the insurance company and saves you the hassle plus they want the settlement to be higher as their fee is based on a percentage of it.  Another reason to use one is in a situation where the insurance company are being difficult and I'm currently using one as the insurance company are disputing when a fire took place and damaged a chimney of mine.  I've never heard of a broker doing this, may OP the guy is a broker who is also a loss adjuster?


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## Ed054 (22 Sep 2008)

Bronte said:


> I've used a loss assessor/adjuster in the past with a claim as they can negotiate a higher figure with the insurance company. They do the fighting with the insurance company and saves you the hassle plus they want the settlement to be higher as their fee is based on a percentage of it. Another reason to use one is in a situation where the insurance company are being difficult and I'm currently using one as the insurance company are disputing when a fire took place and damaged a chimney of mine. I've never heard of a broker doing this, may OP the guy is a broker who is also a loss adjuster?


 
I have never come across a situation where a Broker is both.
The broker may have a claims person working in their office but it is highly unlikely that a Broker would have the time to look after a property damage claim in the way a loss assessor would.


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## abelard (8 Oct 2008)

I used one and was delighted with the service. Also, the 10% was added to the claim as the cost of making the claim, and accepted as such by the insurance company, so it didn't cost me a cent. The loss adjuster's opening position (from his desk) when I contacted the the insurance company to make a claim was that there was a pre-existing problem with the pipes, the loss assessor came to the house and successfully argued otherwise. There was no way I could have dealt with the stress of that negotiation. And as another posted out, I wouldn't have been as thorough in working out the full extent of the damage. I would never make a major insurance claim without that kind of help again.


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## MichaelBurke (8 Oct 2008)

5Times, what is the latest on this. I would really be intersted in hearing how things proceeded. Sounds strange, maybe we need to hear a bit more. From a broker, this is definitely _unusual_ practice.


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