Complaining about an insurance company

When an insurer refuses to pay an insurance claim you thought was covered under your policy, you want answers. And you’re not alone - complaining about an insurance company has become a national pastime.

The Australian Financial Complaints Authority (AFCA) reported a 50 percent increase in complaints against all general insurance providers between 1 July 2022 and 30 June 2023. This was the highest number of complaints in the history of external dispute resolution. Many of these were related to delays in processing claims or the rejection of claims for those affected by the devastating 2022 floods around Australia.

Complaints were still at a record high for the second year running in the year to 30 June 2024, with complaints about motor vehicle insurance overtaking home building cover as the most complained about insurance product. Delays in claim handling remained the top issue for general insurance complaints.

While it may bring you some comfort to know that you are not alone in complaining about insurance companies, it’s important to know how and where to lodge those complaints to help get your situation resolved sooner rather than later.

 

 

Before you complain

Insurers who provide claims handling and settling services operate under an Australian financial services (AFS) licence that requires them to provide “efficient, honest and fair financial services”. We need to hold them to account if they are failing to meet their obligations.

Make sure you have a clear understanding of your reasons for complaining about an insurance company before you take the next step. What do you think they have done wrong? Are there unnecessary delays? The General Insurance Code of Practice outlines maximum timeframes for the insurance claim process but that doesn’t mean you should have to wait that long.

Think about the outcome or remedy you are seeking. Do you want the insurer to review your claim, or do you need someone else to ensure they speed up your claim process?

Read your insurance policy carefully or ask someone who is good with legal documents to go through it with you, to ensure that you have strong grounds for your complaint.

Make an internal complaint

You can dispute an insurer’s claim decision directly with them. Ask your claims manager for a review of their decision and outline your reasons in detail. If you do not get a satisfactory answer you can escalate to the insurer’s customer relations team and lodge a formal complaint with the company.

The complaint is then reviewed internally by someone with the appropriate experience. They may ask you to provide more information to support your complaint, so be prepared with all relevant documentation. The more that is written down and recorded the better.

Once your complaint has been reviewed, the insurer will inform you of the outcome in writing, though it may be no different to the initial assessment.

 

 

Make an external complaint

If you are not getting anywhere with the insurer, the next step is to look at lodging a complaint with AFCA. Generally speaking, the authority will want to see that you have taken steps to resolve the dispute with the insurance company first.

AFCA can review and help resolve complaints about a range of general insurance products, including home and contents, car, travel and pet insurance. These include disputes about the rejection of your claim, whether in part or full; problems with repairs organised by the insurer; unreasonable delays in processing your claim; and disputes about the amount being offered to settle your claim.

If you can’t lodge the complaint online for any reason, you can call AFCA on 1800 931 678 and give all the details over the phone.

As this is a free and independent service for consumers, it is generally a better option than going to court. AFCA can help negotiate a fairer outcome and can also make a binding order on the insurer with your agreement. Be aware there may be time limits, depending on the nature of your complaint, so check with the authority.

 

 

Take legal action

This should be considered a last resort, not least because insurance companies generally have deep pockets, and it can become very expensive for the average consumer.

In some states or territories, you can apply to a tribunal to resolve the issue. Check with your local consumer protection agency or legal aid service to determine your options before heading down this path. If you lose a court action, for example, you could be liable for the insurer’s costs as well as your own.

Lodge a complaint with us

If all of the above sounds exhausting – and we know it can be just that – let Handle My Complaint ease the load. We have helped hundreds of people just like you get the outcome they deserve. Tell us all about your insurance complaint and we’ll help you handle it.