Usually not before you have spoken to your insurer or broker. A claims management company runs your claim under contract for an upfront fee or a percentage of the payout, and the Insurance Council of Australia says those fees are not covered by your policy. Your insurer handles the claim for no extra fee, and AFCA is free if you disagree with the result. If you have already signed with someone who knocked on your door, the ICA points to a 10-day cooling-off period.
What a claims management company does
A claims management company works for the policyholder, not the insurer, and is paid out of the claim. According to the Insurance Council of Australia, these firms may handle the paperwork, liaise and negotiate with your insurer, and coordinate repairs, under a contract that charges an upfront fee, a percentage of the insurance payout, or both. Some people use one because they cannot face dealing with the insurer after a loss, or need support to do it.
The industry is under watch. In its supervisory priorities for 2026-27, published on 30 September 2026, ASIC said it will review the practices of for-profit claims management firms, including those commonly referred to as disaster chasers, and the potential implications of some of those practices for consumers. Storm season has started in Victoria, and that is when the knock on the door usually comes.
Where the fee comes from
The ICA is blunt on this point: claims management companies do not offer a free service, and their fees are not covered by your insurance policy. The money comes out of what the insurer pays you.
That matters most on a building claim. If your contract takes a share of a cash settlement, the amount left may not cover the repairs the settlement was calculated to pay for. The ICA warns that where you cannot pay the fee another way, the contract may require you to accept a cash settlement rather than have the insurer manage the repairs, so the fee can be taken from it. Once that happens, the cost of getting the builder back on site sits with you.
There is also an information cost. A firm acting under your authority deals with the insurer directly and may make decisions on your behalf, and the ICA notes that you may not receive important information about your own claim along the way.
How disaster chasers work
A disaster chaser is a different problem, though the two can overlap. The ICA’s fact sheet describes operators who knock on doors after a storm, say they have found damage to your property, offer quick repairs or help with the claim, and sometimes say they represent an insurance company. The ICA adds that they are often unlicensed and their work is often non-compliant.
In its November 2025 warning, the ICA said some of these operators pressure owners to sign a contract on the spot for future repair work. Its advice is to speak to your insurer before agreeing to any repairs or rebuilding, because insurers only pay for approved work that is covered by the policy. If you have already signed, the ICA says you have a statutory 10-day cooling-off period, and your insurer can help you end the arrangement.
For a business, the same rules apply to a storm-damaged shopfront or warehouse roof. An unapproved repair can leave a gap between the invoice and what the business pack pays, at the point when cash is shortest.
Questions to ask before you sign anything
If you still want paid help, the ICA suggests getting answers in writing to these questions first:
- What will the service cost, and is it a flat fee or a percentage of the payout?
- How is the fee paid if the insurer repairs the property instead of paying cash?
- What do you pay if the claim fails or pays less than expected, and what if you stop before it settles?
- Will they give you a written scope of work, and must you sign before you see it?
- Will they lodge an AFCA complaint or start court action without your permission, and will they charge you for using AFCA?
- Do they hold an Australian Financial Services Licence that covers claims handling and settling, and are they an AFCA member?
A firm that will not answer these on paper has answered them anyway.
What you get without paying a fee
Lodging directly costs nothing extra. The ICA points out that insurers employ specialist claims managers, explain the policy and the claims process, and can recommend approved repairers. Insurers that subscribe to the General Insurance Code of Practice also work to set timeframes for keeping you informed and deciding the claim.
If you disagree with the outcome, the dispute path is free as well. You complain to the insurer first, and if that does not resolve it, AFCA is free for consumers and small businesses. A claims management company cannot open a door that is closed to you; it can only walk you through one you already have, for a price.
In an apartment or townhouse, check who should be claiming before anyone signs. Damage to the building and common property usually falls under the owners corporation’s strata policy, while your own home and contents policy covers what is inside your lot. A firm offering to run the building claim may be talking to the wrong policyholder.
What FRS does
Claims are part of the broker role, not an extra service sold after the loss. For clients whose cover we arrange, we lodge the claim, deal with the insurer’s claims team and assessor, check the scope of works against the policy wording, and follow up when the Code’s timeframes pass. If someone approaches you after a storm offering to manage a claim on a policy we placed, call us before you sign, and we will tell you what the insurer has already received and what is still outstanding.
To report storm damage or ask about a claim already lodged, use our claims page.
Frequently asked questions
Do I need a claims management company to make an insurance claim?
No. You can lodge a claim directly with your insurer, or through your broker if you have one, and the insurer’s claims team handles it for no extra fee. The Insurance Council of Australia says claims management company fees are not covered by your policy, so using one reduces what you keep from the payout.
How do claims management companies charge for their service?
According to the Insurance Council of Australia, they charge an upfront fee, a percentage of the insurance payout, or both, under a written contract. The fee is not covered by your policy. Some contracts require you to accept a cash settlement so the fee can be taken from it, which can leave less money for the repairs.
Can I cancel a contract I signed with a disaster chaser?
The Insurance Council of Australia says contracts signed with disaster chasers come with a statutory 10-day cooling-off period. Contact your insurer as soon as you can, because it can help you end the arrangement. Do not let repair work start until the insurer has approved it, since insurers only pay for approved work that the policy covers.
Is ASIC doing anything about claims management firms?
Yes. In its supervisory priorities for 2026-27, published on 30 September 2026, ASIC said it will review the practices of for-profit claims management firms, including those commonly called disaster chasers, and the potential implications of those practices for consumers. Until then, check any firm’s licence and AFCA membership before you sign.
Questions about your own cover? Call 03 7046 3766 on weekdays between 9:30am and 6pm, or send us an enquiry.
