Insurance Claims - Paying A Loss Assessor To Negotiate Claims On Your Behalf

Loss assessors traditionally act on behalf of insurance companies in investigating and reviewing mostly large losses/claims. These professionals are highly trained and often specialize in certain classes of risk and insurers, therefore, know which firm of loss adjusters to refer any case which it decides to outsource.


Some of these assessors are now offering their services direct to policyholders. This group promise to 'fight for the payment of insurance claims on behalf of policyholders and ensure that the latter gets absolutely the maximum possible settlement from the insurance company'.
This sound somewhat like the pledge often repeated in media adverts by 'no win no fee' injury lawyers but in this case the loss assessors while promising to help the claimant maximize his claim, also state that the fee for this service is a percentage of the claim amount typically between 10 - 35%.

Obviously, this group of assessors conducted market research to establish that the market exists for the service they are offering and in any free market this is perfectly acceptable, however, whether the consumer stands to benefit from the concept remains to be seen.© InsuranceInBoldPrints
There is also the issue of how the development will impact on the insurance industry. Will the quest for increased payments by the assessors lead to more cases ending up in court with the resultant increase in legal costs? 

Claims payment less fee paid to  a loss--assessor

The unsuspecting claimant will ultimately receive a net claim payment that is less than indemnity. This defeat the purpose of insurance as the insured will be unable to get back to the same financial position enjoyed before the loss after forfeiting up to 1/3 of the claim payment to his loss assessor.

The viability of the arrangement would also be put to the test where for instance the insurer opts to replace, reinstate or rebuild the property. Where this happens, where would the claimant get the money to pay the assessor's fee? 

The cart before the horse?

One loss assessor on its website states thus '...if you engage our services your insurance company will also take on a loss adjuster to handle the claim on their behalf. It is the job of a loss adjuster to lower the amount the insurance company pays out where possible. We will work on your behalf to maximize your claim, and somewhere there will be a compromise. Although you may not get as much as you hoped for, we ensure you will get more than what you would get if you had not hired a loss assessor'.

What the above statement fails to mention, is that the terms (conditions, warranties, exclusions) of an insurance policy which is evidence of the contract are agreed at the inception of the contract. In the event of a loss, processing and negotiation are based on these agreed terms only.
© InsuranceInBoldPrints

In the unfortunate situation where a claim is inadmissible under the terms of the policy, the policy document outlines the procedure to follow. Where the options for redress have been exhausted i.e. complaint, Financial Ombudsman Service (FOS) or litigation and the outcome still does not favour the claimant, no level of wizardry from a loss assessor would change the outcome.

There is also the issue of who bears the legal costs if as mentioned above, the loss assessor stubbornly pursues a case to court and then loses.                                      

Instead of the promise to work wonders (where the loss assessor has no prior knowledge of details of a contract), emphasis should be on ensuring that insurance buyers get the best professional advice and guidance before and during the process of arranging insurance.

This assistance should continue throughout the duration of the insurance contract culminating in help with claims.  This is a role which authorized insurance brokers have always done very well.