Insurance claim delays - what you can do

Is my insurer allowed to delay my claim?

Insurers are allowed a reasonable time to assess and process your claim, but they are not allowed to delay it indefinitely or without explanation. The General Insurance Code of Practice sets out timeframes for how long certain steps should take. 

Unless there are exceptional circumstances, your insurer must:

• Tell you if further information is required within 10 business days of you lodging your claim (s68)
• Make a decision on your claim within 10 business days of receiving all necessary information (s76)
• Provide regular updates at least every 20 business days if the claim remains open (s70), and respond to any request for updates within 10 business days (s71)

If your claim is taking longer than expected, your insurer must explain why and provide an updated timeframe.

What are some common causes of delay?

Some delays are unavoidable, especially after large-scale weather events or when specialist trades or reports are required. However, many delays are caused by poor claim management or lack of follow-up. 

Common causes of delay include:

• Waiting for builder or trade availability
• Unclear or missing information from suppliers
• Failure to assign or escalate the claim internally
• Repeated requests for documents already provided
• Delayed investigations or third-party reports

If you’re waiting for weeks or months without a clear update, it may be reasonable to ask for a formal explanation, and to lodge a complaint if necessary.

How long does an insurer have to make a liability decision?

Insurers are required to assess and decide claims within a reasonable timeframe, and specific obligations are set out in the General Insurance Code of Practice. 

The key timeframes are:

• The insurer must make a liability decision (i.e., that is, whether they accept your claim or not) within four months of receiving it (s77), unless special circumstances apply (s78). 
• However, they must also make their liability decision within 10 business days of receiving all required information s76).

These are maximum timeframes. If the insurer has everything they need to assess the claim, they are expected not to delay and should make a decision within 10 business days.

How long does an insurer have to settle my claim after accepting it?

Once your insurer has accepted liability for your claim, they are expected to progress the claim toward final settlement within a reasonable period of time. There are no fixed timeframes in the law for when a settlement offer must be made, but that doesn’t mean insurers can delay indefinitely. 

Under the General Insurance Code of Practice and their duty of utmost good faith, insurers must:

• Handle claims promptly and efficiently
• Communicate clearly and regularly
• Avoid unnecessary delays or repeat requests
• Act reasonably based on the facts and evidence already available

If liability has been accepted, and your insurer still hasn’t made a settlement offer, you may be entitled to raise concerns or lodge a complaint, particularly where the delay is unexplained or avoidable.

Can I be compensated for delay?

Yes, in some cases. If the insurer’s delay has caused you unusual stress, inconvenience, or hardship, you may be entitled to non-financial loss compensation. This is assessed on a case-by-case basis and can be awarded by the insurer or by AFCA.