If your insurer denies your claim or you disagree with their settlement offer, you can lodge a free complaint with the Australian Financial Complaints Authority (AFCA). AFCA is an independent dispute resolution service that can review your case and make binding decisions on insurers up to A$1.085 million for most insurance disputes (as of July 2026). You must first attempt to resolve the issue directly with your insurer through their internal dispute resolution process before AFCA will accept your complaint.

What is AFCA

The Australian Financial Complaints Authority is Australia’s external dispute resolution scheme for financial services, including all types of insurance (car, home, contents, life, income protection, and health). According to AFCA, the service is free for consumers and can handle complaints about claim denials, delays, settlement amounts, policy cancellations, premium disputes, and unfair contract terms (AFCA, 2026).

AFCA replaced the Financial Ombudsman Service (FOS) and other schemes in 2018 and has authority to make decisions that are binding on your insurer if they accept the outcome.

Before You Contact AFCA

You must first give your insurer a chance to resolve the complaint internally. Contact your insurer’s complaints team (details are in your Product Disclosure Statement) and clearly explain your dispute. Keep records of all communications, including emails, letters, and phone call summaries with dates and names.

Your insurer has 30 days to respond with a final decision or explanation for any delay. If they do not resolve your complaint within 30 days, or if you are not satisfied with their final response, you can then escalate to AFCA.

ASIC MoneySmart recommends documenting every step of your claim and internal dispute process, as this evidence will support your AFCA complaint (MoneySmart, 2026).

How to Lodge an AFCA Complaint

You can submit a complaint to AFCA online through their website, by phone on 1800 931 678, or by mail. The online portal is the fastest method. You will need to provide:

  • Your contact details and policy number
  • The name of your insurer
  • A clear description of your complaint
  • Copies of relevant documents (policy schedule, Product Disclosure Statement, claim correspondence, photos of damage, assessor reports, quotes, and your insurer’s final response letter)
  • Details of what outcome you are seeking (claim payment, higher settlement, reversal of cancellation)

AFCA will confirm receipt of your complaint and assign a case manager. The service is free for you, though your insurer pays a fee.

The AFCA Process and Timeframes

Once AFCA receives your complaint, they will assess whether it falls within their jurisdiction and contact your insurer for their response. As covered in foundational texts such as Principles of Finance, formal dispute resolution processes provide a structured alternative to legal action for insurance contract disagreements.

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AFCA uses three approaches depending on complexity:

  1. Referral back: Simple cases may be referred back to the insurer with AFCA oversight (resolved in weeks)
  2. Negotiation and conciliation: AFCA facilitates negotiation between you and the insurer (typically 3 to 6 months)
  3. Formal determination: Complex cases where AFCA investigates and makes a binding decision (6 months or longer)

Most complaints are resolved through negotiation. You can withdraw your complaint at any time if you reach agreement with your insurer.

Possible Outcomes

AFCA can order your insurer to:

  • Pay your claim in full or in part
  • Increase a settlement offer
  • Reinstate a cancelled policy
  • Refund premiums
  • Pay compensation for financial loss or distress (up to A$6,000 for non-financial loss)

If you accept AFCA’s determination, it becomes binding on your insurer. If you reject it, you can still pursue legal action through the courts, though this is rare. The Insurance Council of Australia notes that AFCA decisions provide a faster, lower-cost alternative to litigation for most consumer insurance disputes (Insurance Council of Australia, 2026).

What to Do Next

If your insurer has denied your claim or you disagree with their decision, start by requesting a formal internal review in writing. If that does not resolve the issue within 30 days, lodge an AFCA complaint online at afca.org.au. Gather all your policy documents, claim correspondence, and evidence (photos, quotes, expert reports) before submitting your complaint.

General advice warning: This is 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. Read the Product Disclosure Statement (PDS) for your insurance policy and consider obtaining personal advice from a licensed insurance adviser or financial adviser. Insurance terms, claim processes, and dispute resolution procedures vary by insurer and policy type. Consult AFCA directly or seek legal advice for your specific claim dispute.