Should you pay a percentage of your insurance claim?
Someone has offered to fight your rejected claim for a share of whatever comes back, and told you it will come back. Here is what the rules actually say, who they bind, and what that fee costs you if the insurer pays part of the claim.
In short: a licensed insurance broker may not charge a claims fee expressed as a percentage of the claim, and may not take on a personal health, motor or life claim as claims consultancy at all. An advocate may not charge a fee that depends on the result. Anyone who is neither is bound by neither — which is the problem, not the loophole: no licence, no regulator, nobody to complain to. And whoever you engage, nobody can guarantee the outcome, because the insurer, the Ombudsman or a consumer commission decides it.
What a share of the claim actually costs
Change the amount, the share you were quoted, and what the insurer ends up paying.
| Outcome | Insurer pays | Their fee | You keep |
|---|---|---|---|
| Claim paid in full | ₹5,00,000 | ₹75,000 | ₹4,25,000 |
| Settled at 60% | ₹3,00,000 | ₹45,000 | ₹2,55,000 |
| With the Claim Strategy Note | ₹3,00,000 | ₹999 | ₹2,99,001 |
Who pays for the discount?
Accepting 60% instead of the full claim gives up ₹2,00,000. Of that, the person advising you gives up ₹30,000 and you give up ₹1,70,000. Their fee falls by their share of the shortfall; you carry the rest of it.
Arithmetic only, on the figures you entered — not a prediction about your claim, and not a statement about what any particular firm charges. Nobody can tell you at the outset what an insurer will pay.
What the rules actually say
Every quotation below is verbatim. Follow the link and read it yourself.
A licensed broker's claims fee may not be a percentage of the claim
“the insurance broker may charge fee for claims consultancy services as may be mutually decided between the insurance broker and the client. However, such fee shall not be expressed as a percentage of the claim.”
IRDAI (Insurance Brokers) Regulations, 2018, reg. 28(1)(f) (Notification IRDAI/Reg/2/149/2018, 12 January 2018)
The regulator's position on pricing a claim by its size is written down. The same regulations define a broker's “Fee” as one “which is not a percentage of premium or claim amount” (reg. 2(h)).
Binds: Insurance brokers licensed by IRDAI.
A licensed broker may not do claims consultancy on a retail claim at all
“Insurance brokers may undertake claims consultancy only for commercial lines of general insurance business”
IRDAI (Insurance Brokers) Regulations, 2018, reg. 28(1)
A household health, motor or life claim is outside what a licensed broker may take on as claims consultancy. So somebody offering to run your personal claim for a share of it is, in almost every case, not doing it as a licensed intermediary — ask which licence they hold, and to whom you complain if it goes wrong.
Binds: Insurance brokers licensed by IRDAI.
The regulator has warned a broker over exactly this fee structure
“1% on excess claim settlement subject to a maximum of Rs.20 Lakhs”
IRDAI Final Order IRDA/ENF/ORD/ONS/067/04/2019, 30 April 2019 (M/s Anand Rathi Insurance Brokers Ltd.)
On inspection the Authority found that fee wording in the broker's own purchase order, treated it as a compliance failure under the then reg. 32(1)(c), and warned the broker for leaving it unamended until the inspection pointed it out. (The ₹2,00,000 penalty in the same order was for a different charge — doing claims consultancy above the ₹1 crore limit.)
Binds: The broker inspected. It is evidence of how the Authority reads the rule, not a rule that binds an unlicensed consultant.
An advocate may not charge a fee contingent on the result
“An advocate shall not stipulate for a fee contingent on the results of litigation or agree to share the proceeds thereof.”
Bar Council of India Rules, Part VI, Chapter II, Section II, Rule 20 (Standards of Professional Conduct and Etiquette)
If the person quoting you a share of your claim is an advocate, the arrangement is professional misconduct on their side of the table.
Binds: Every advocate enrolled in India.
The Supreme Court has held such a fee unenforceable
“claim towards Advocate's fee based on percentage of result of litigation was illegal”
B. Sunitha v. State of Telangana, (2018) 1 SCC 638 (Supreme Court of India, 5 December 2017)
The Court held the fee claim to be “against public policy and … an act of professional misconduct” and quashed the recovery proceedings. A client who has promised a share of the award is not without an answer.
Binds: Courts in India, on an advocate's fee claim.
A guaranteed outcome is a misleading advertisement
“gives a false guarantee to, or is likely to mislead the consumers as to the nature, substance, quantity or quality of such product or service”
Consumer Protection Act, 2019, s. 2(28); CCPA's powers, s. 21
Nobody can guarantee the result of your claim, because nobody advertising the service decides it — the insurer's grievance officer, the Insurance Ombudsman or a consumer commission does. A promise of a certain outcome is a reason to walk away, not a reason to sign.
Binds: Anyone advertising a service to consumers in India.
Who carries the loss when the insurer offers less
- A share of the claim pays for closing it, not for winning it.
- Most disputed claims end in an offer of part of the amount — and the person advising you whether to accept gives up only their share of what you concede.
- A fixed fee is the same whether you settle, win or walk away, so the advice about the offer is not about the adviser's fee.
- It also means the cost is known before you start, instead of scaling with a number nobody can predict at the outset.
Five questions to ask before you sign anything
- 1.Which licence covers this work, and what is its registration number?
- 2.Is the fee payable if the claim settles for part of the amount?
- 3.Who decides whether to accept a part-payment offer — you or me?
- 4.What do I owe if I reject the offer and the claim is then refused?
- 5.Will you put the fee, the scope and the guarantee in writing?
Fixed fee, no share, no promise
- A fixed fee for a defined piece of work, shown before you pay.
- Never a share of your claim, and never a fee that changes with the outcome.
- No promise about the outcome — the insurer, the Ombudsman or a commission decides that, not us.
- We are not paid by any insurer, so the recommendation is not a commission.
Frequently asked
Is it legal to pay a consultant a percentage of my insurance claim in India?
It depends entirely on who they are. An insurance broker licensed by IRDAI may not express a claims-consultancy fee as a percentage of the claim (IRDAI (Insurance Brokers) Regulations, 2018, reg. 28(1)(f)), and may only do claims consultancy for commercial lines of general insurance at all — so not for a household health, motor or life claim. An advocate may not charge a fee contingent on the result (Bar Council of India Rules, Rule 20), and the Supreme Court held such a fee claim unenforceable in B. Sunitha v. State of Telangana (2018) 1 SCC 638. Someone who is neither a licensed broker nor an advocate is bound by neither rule — which means no licence, no regulator, and no forum to complain to if it goes wrong.
Can anyone guarantee that my rejected claim will be paid?
No. The claim is decided by the insurer's grievance officer, then by IRDAI's Bima Bharosa, the Insurance Ombudsman or a consumer commission — never by the person selling you help. Under the Consumer Protection Act, 2019 an advertisement that gives a false guarantee is a misleading advertisement. Treat a guaranteed outcome as a reason to walk away.
Why does a share-of-the-claim fee matter if I only pay when I win?
Because most disputed claims end in an offer of part of the amount, and somebody has to advise you whether to take it. On a fee of one rupee in seven, the adviser gives up about fourteen paise of every rupee you concede and you give up the other eighty-six. A fixed fee is the same whether you settle, win or walk away, so the advice about the offer is not also a decision about the adviser's fee.
What does BimaHaq charge instead?
A fixed fee for a defined piece of work, shown before you pay, and never a share of your claim. The first step — the Claim Direction Check — is free, and every price is on the pricing page. We are not paid by any insurer, and we promise no outcome.
What should I ask someone who offers to run my claim for a percentage?
Which licence covers this work and what is its number; whether the fee is payable if the claim settles for part of the amount; who decides whether to accept such an offer; what happens to the fee if you reject the offer and lose; and to see all of it in writing before you sign anything.
BimaHaq is an insurance claims review, claim audit, grievance-drafting, and online dispute resolution (ODR) platform. We help you review policies, audit and pursue insurance claims, draft grievances, and resolve disputes through mediation. We are an independent platform — not an insurance company, broker, or IRDAI-licensed agent — and we do not sell insurance. BimaHaq is not a law firm, does not provide legal advice, and does not represent policyholders before Consumer Commissions; using BimaHaq creates no advocate–client relationship. Where legal representation is needed, it is provided by independent advocates whom you engage directly. No outcome is guaranteed; we provide expert operational support based on the merits of your matter. All AI-assisted drafts are human-reviewed.