Beware of Storm Chasers

I have written on this subject before but clearly more and more builders and others are jumping on the band wagon. The usual strategy is to offer a ‘free’ inspection of the property and if they find damage following a storm, hail event, fire, or flood, they will lodge the claim for the Insured.

Before doing anything they have the client sign a contract that states that the service will be ‘free’ as long as they, the builder, or if they are not a builder, their nominated builder, does the work. The sting is in the clause that states that if the builder is not appointed the Insured is to pay $xxxx or anywhere between 10% -20% of the insurance company settlement whichever is the greater.

The vast majority of Insurers have a panel of approved builders as they do for motor repairers where the Insurer has confidence in the quality of the repairs and the reasonableness of the pricing.

Insurance claims teams and loss adjusters are not fools. They know that this cost is being built into the repair cost if they allow the firm to do the work with no guarantee of quality of workmanship.

As such it is not surprising that many times the Insurer does not approve the builder put forward by the company submitting the claim on behalf of the Insured, and so the Insured then gets hit with fee.

Many of these cases end up before the Australian Financial Complaints Authority (AFCA) who have repeatedly warned consumers to steer clear of these ‘Storm Chasers’.

If an insured believes they have a claim, then all they need do is report the damage to their insurance company. If they feel they need help with the preparation of the claim, particularly commercial losses, then they can consider appointing a reputable appropriately licensed claims preparation company.

With the majority of homes now insured direct, Insured’s do not have the benefit of having a general insurance broker, someone who is trained and qualified to provide general insurance advice, to assist them.

I would ask readers to please share this warning with their family and friends so that other innocents do not get caught having to pay for something that is simply not necessary.