Independent vs Insurer-Appointed Assessors: Why It Matters

After you lodge an insurance claim for property damage, the insurer will typically send someone to inspect your home. This person might be called a loss adjuster, claims assessor, or building assessor. They will look at the damage, prepare a report, and make recommendations to the insurer about your claim.

What many homeowners do not realise is that this assessor works for the insurance company. They are either employed directly by the insurer or contracted through a panel firm that relies on the insurer for ongoing work. This does not mean they are dishonest, but it does mean their assessment may not fully represent your interests.

Understanding the difference between insurer-appointed assessors and independent assessors is one of the most important things you can do when navigating a property damage claim.

Who Is the Insurer-Appointed Assessor?

When your insurer receives a claim, they assign it to either an internal claims handler or an external loss adjuster. For property damage claims involving significant amounts, the insurer will usually engage a loss adjusting firm to inspect the property and prepare a report.

Loss adjusters are professionals who investigate insurance claims on behalf of insurers. Their job is to determine:

• Whether the damage is covered under the policy
• What caused the damage
• The extent and cost of the damage
• Whether any exclusions or conditions apply

Loss adjusters are regulated and must hold appropriate qualifications. However, their client is the insurance company. They are paid by the insurer, they report to the insurer, and their recommendations inform the insurer's decision about your claim.

This arrangement creates an inherent tension. The loss adjuster is expected to be thorough and fair, but they are also working within a system where the insurer has a financial interest in minimising the payout.

The Conflict of Interest Problem

It is important to be clear: most loss adjusters act professionally and follow their industry codes of conduct. However, the structural conflict of interest cannot be ignored. Studies and industry reports have consistently shown that insurer-appointed assessors tend to produce more conservative damage estimates compared to independent assessors.

This can manifest in several ways:

• Narrower scope of damage. The loss adjuster may document only the most obvious damage while missing secondary or concealed issues that are related to the same event.
• Cause attribution. The assessor may attribute some of the damage to pre-existing conditions, wear and tear, or maintenance failures rather than the insured event.
• Lower repair costs. The scope of works and cost estimates may favour cheaper repair methods over full replacement, even when replacement is the more appropriate option.
• Exclusion reliance. The report may lean towards interpretations of the policy that favour exclusions or limitations.

None of this means the loss adjuster is acting in bad faith. But the incentive structure means that the assessment may not fully reflect the damage you have experienced.

What Does an Independent Assessor Do?

An independent building assessor is engaged by you, the homeowner. They have no relationship with your insurance company and no financial incentive to minimise or maximise the claim. Their sole obligation is to provide an accurate, thorough assessment of the damage.

An independent assessment typically includes:

• Comprehensive damage documentation. The assessor inspects the entire property, not just the areas flagged by the insurer. They look for secondary damage, concealed issues, and consequential damage that may have been missed.
• Cause analysis. An independent assessor will determine the cause of the damage based on building science and evidence, without any pressure to attribute it to excluded causes.
• Detailed scope of works. The report includes a thorough scope of works needed to properly repair the property, including all trades, materials, and labour required.
• Accurate cost estimates. Repair costs are based on current market rates rather than insurer panel pricing, which can be significantly lower than what independent contractors charge.
• Photographic evidence. Detailed photographs are taken throughout the inspection, creating a comprehensive visual record of the damage.
• Building code compliance. The assessor checks whether repairs need to comply with current building codes, which may require upgrades beyond a simple like-for-like repair.

How the Reports Differ

The differences between an insurer-appointed report and an independent report can be significant. Here is a practical example.

After a severe storm damages a roof, the insurer's loss adjuster may report that 20 tiles need replacement and there is minor water damage to one ceiling. The total claim might be assessed at $3,500.

An independent assessor inspecting the same property might find that the storm also damaged the roof sarking, displaced ridge capping, caused water ingress into the wall cavity, and created moisture damage in the subfloor framing. The independent assessment might put the true repair cost at $18,000 or more.

The difference is not about honesty. It is about the depth and scope of the investigation, the methodology used, and the incentive structures at play.

Key areas where reports commonly differ include:

• Extent of damage. Independent reports tend to identify more damage because the assessor has more time and a broader mandate.
• Repair methodology. Insurer reports may specify patch repairs where independent assessors recommend full replacement to ensure durability and code compliance.
• Cost of repairs. Independent reports use current market rates while insurer reports may use panel rates that are 20 to 40 percent lower.
• Causation. Independent reports are more likely to attribute all related damage to the insured event rather than splitting it between insured and non-insured causes.

When Should You Get an Independent Assessment?

Not every insurance claim requires an independent assessment. For small, straightforward claims where the damage is obvious and the insurer's offer seems reasonable, you may not need one.

However, you should seriously consider an independent assessment in these situations:

• The insurer's payout seems too low. If the amount offered does not cover the actual cost of proper repairs, an independent report can demonstrate the true cost.
• Your claim has been partially or fully denied. An independent assessment provides evidence to challenge the denial through internal dispute resolution or AFCA.
• The insurer attributes damage to maintenance or wear and tear. An independent assessor can determine whether the damage was genuinely caused by the insured event.
• You have significant property damage. For claims involving tens of thousands of dollars, the cost of an independent assessment (typically $500 to $2,000) is a worthwhile investment.
• There is hidden or secondary damage. If you suspect the damage goes beyond what is visible, an independent assessor can investigate concealed areas.
• You disagree with the insurer's scope of works. If the proposed repairs seem inadequate, an independent report can recommend the appropriate repair methodology.

How to Choose an Independent Assessor

When selecting an independent assessor, look for the following:

• Qualifications and licensing. The assessor should hold relevant building qualifications and be licensed in your state. In NSW, this means a licence from NSW Fair Trading. In Victoria, they should be a registered building practitioner.
• Experience with insurance claims. Not all building inspectors have experience with insurance work. Look for an assessor who understands how insurance claims work and how to prepare reports that insurers and dispute resolution bodies will take seriously.
• No insurer affiliations. Confirm that the assessor does not work on any insurer panels and has no financial relationship with insurance companies.
• Detailed reporting. Ask for a sample report or outline of what the assessment will cover. A good report should include detailed descriptions, photographs, cause analysis, scope of works, and cost estimates.

Using Your Independent Report

Once you have your independent assessment, you can use it to:

• Negotiate directly with the insurer for a higher settlement
• Support an internal dispute resolution complaint
• Lodge a complaint with AFCA with strong supporting evidence
• Pursue legal action if necessary

An independent report carries significant weight in dispute resolution because it is prepared without any financial connection to the insurer. AFCA and the courts regularly give independent reports substantial consideration when resolving disputes.

The cost of an independent assessment is a small price to pay for ensuring that your claim is treated fairly and that your home is properly repaired.

For a complete overview, see our guide to insurance claim assessments.