Key Takeaway: If your insurer denies, reduces, or delays your claim, you can lodge a free complaint with the Australian Financial Complaints Authority (AFCA) after attempting to resolve the issue directly with your insurer. AFCA is an independent ombudsman service that can investigate your case and make binding decisions on insurers up to certain compensation limits.

When your car, home, contents, or life insurance claim is denied or underpaid, you have the right to challenge that decision. The Australian Financial Complaints Authority (AFCA) provides a free, independent dispute resolution service for consumers who disagree with their insurer’s claim outcome. According to the Australian Financial Complaints Authority, AFCA handles thousands of insurance disputes each year and can require insurers to pay claims, increase settlements, or provide other remedies.

Here is the step-by-step process to dispute an insurance claim decision through AFCA in Australia.

1. Attempt Internal Dispute Resolution First

Before AFCA will accept your complaint, you must give your insurer the opportunity to resolve the issue internally. Contact your insurer’s complaints or customer relations team in writing (email or letter) and explain why you believe the claim decision was incorrect. Reference your policy number, the claim number, and the specific reasons you are disputing the decision (such as disagreement over the policy wording, the assessment of damage, or the exclusion applied).

Your insurer must provide a final response within 30 days for most disputes (45 days for some complex matters). If they do not respond within this timeframe, or if you remain dissatisfied with their final decision, you can escalate to AFCA. Keep copies of all correspondence, as you will need to provide these to AFCA.

2. Gather Your Supporting Documents

AFCA will require documentation to assess your complaint. Collect the following before lodging your dispute:

  • Your insurance policy document and Product Disclosure Statement (PDS)
  • All claim correspondence (initial claim, insurer responses, denial letters)
  • Evidence supporting your claim (photos, repair quotes, receipts, medical reports)
  • Internal dispute resolution correspondence and the insurer’s final response
  • Any relevant policy schedules, endorsements, or certificates of currency

The more complete your documentation, the faster AFCA can review your case. If your insurer relied on a specific policy exclusion or clause to deny your claim, highlight the relevant sections in your PDS and explain why you believe the exclusion does not apply or was not clearly disclosed.

3. Lodge Your Complaint With AFCA

You can submit your complaint to AFCA online, by phone (1800 931 678), or by post. As noted by ASIC MoneySmart, AFCA’s service is completely free for consumers. When lodging your complaint, you will need to provide:

  • Your personal details and contact information
  • Your insurer’s name and policy number
  • A summary of the dispute and what outcome you are seeking (such as payment of the full claim, a higher settlement amount, or reconsideration of the decision)
  • Copies of the documents listed in Step 2

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AFCA will acknowledge your complaint and assign a case manager. They will contact your insurer and request their file and response to your complaint.

4. AFCA Reviews Your Case

Once AFCA receives both your complaint and the insurer’s response, a case manager will review all the information. AFCA operates under the principle of fairness, considering the policy terms, the law, good industry practice, and any relevant codes of conduct. Foundational texts such as Introduction to Business explain that effective complaint handling requires transparency and adherence to fair consumer practices.

The case manager may contact you or your insurer for additional information or clarification. In some cases, AFCA will propose a resolution (such as a settlement amount or a request for the insurer to reassess the claim). Both parties can accept or reject this proposal. If the insurer rejects a fair proposal, AFCA can proceed to make a binding determination.

5. Resolution or Determination

Most cases are resolved through negotiation or AFCA’s preliminary recommendations. If your case proceeds to a formal determination, an AFCA decision-maker will issue a written decision. AFCA’s determinations are binding on the insurer up to the following limits (as of August 2026):

  • A$1,085,000 for most insurance disputes
  • A$5,000 for legal costs

If you disagree with AFCA’s determination, you still have the right to take your dispute to court, but the insurer must comply with AFCA’s decision. According to the Insurance Council of Australia, the AFCA process typically takes between 60 and 90 days for straightforward cases, though complex disputes can take longer.

Tips to Strengthen Your Case

  • Be specific: Clearly explain which policy term or coverage you believe applies, and why the insurer’s interpretation is incorrect.
  • Reference the PDS: Quote the relevant sections of your Product Disclosure Statement and explain how they support your position.
  • Provide independent evidence: Third-party assessments (such as independent repair quotes, building reports, or medical opinions) carry significant weight.
  • Stay factual and organised: Present your case calmly and logically. Emotional arguments are less persuasive than well-documented facts.

Conclusion

Disputing an insurance claim decision through AFCA gives you access to free, independent review of your insurer’s decision. Follow the steps above, keep thorough records, and present your case clearly. If your claim was genuinely covered under your policy, AFCA can require your insurer to pay. For personalised guidance on your specific situation, consult a licensed insurance adviser or a consumer legal service in your state or territory.

General Advice Warning

This article provides general information only and does not take into account your objectives, financial situation, or needs. Before acting on this information, consider whether it is appropriate for you and read the relevant Product Disclosure Statement (PDS). The information in this article is current as of August 2026. AFCA’s processes, compensation limits, and timelines may change. Verify current details at afca.org.au or by contacting AFCA directly before lodging a complaint. For advice specific to your circumstances, consult a licensed insurance adviser or legal professional.