Insurance claim AFCA complaints - what you need to know

What is an AFCA complaint?

An AFCA complaint is a formal dispute lodged with the Australian Financial Complaints Authority about a financial firm (for example, an insurer). It allows you to challenge the conduct or decision of the insurer, without needing to go to court.

AFCA handles complaints involving:

• General insurance (e.g. home, contents, motor)
• Superannuation
• Banking and credit
• Financial advice and investments

How do I make a complaint to AFCA?

You can make a complaint to AFCA by:

• Visiting the AFCA website
• Filling out the AFCA online complaint form
• Uploading supporting documents (for example, insurer correspondence, expert reports)
• Explaining your issue clearly, including what outcome you’re seeking

AFCA also accepts complaints by phone (1800 931 678) or email (info@afca.org.au) if you prefer not to use the online form. 

How much does it cost to lodge an AFCA complaint

AFCA complaints are free for consumers and small businesses. AFCA is funded by the financial services industry, not by those who use its services. If you lodge an AFCA complaint, your insurer pays AFCA’s costs. 

You don’t have to pay any AFCA complaint handling fees or lodgement costs. 

What is the AFCA complaint process?

AFCA follows a structured process to resolve complaints between consumers or small businesses and financial firms. This process is designed to be fair, efficient, and accessible.

1. Lodgement and Referral

Once a complaint is lodged with AFCA, it is typically referred back to the financial firm involved. The firm is given an opportunity (up to 30 days) to resolve the issue directly with the complainant. This step encourages direct resolution and can be successful in addressing concerns promptly. 

2. Case Management

If the complaint remains unresolved after referral, AFCA assigns a case manager to oversee the dispute. The case manager gathers information from both parties and may employ informal resolution methods such as negotiation or conciliation to facilitate a mutually agreeable outcome.

3. Preliminary Assessment

Should informal methods not yield a resolution, AFCA may provide a preliminary assessment. This assessment outlines AFCA’s initial views on the merits of the complaint and suggests a possible resolution. Both parties are given the opportunity to respond to this assessment.

4. Determination

If the complaint is still unresolved, AFCA proceeds to make a formal determination. This decision is based on the information provided, relevant laws, codes of practice, and what is considered fair in the circumstances. For most complaints, if the complainant accepts the determination, it becomes binding on the financial firm.

How long do I have to lodge an AFCA complaint?

AFCA has specific time limits for lodging complaints, which vary depending on the nature of the complaint. For general complaints (including general insurance), you should lodge your complaint with AFCA within:

• Six years from the date you first became aware (or should reasonably have become aware) of the loss.
• Two years from the date you receive a final response from your financial firm’s internal dispute resolution (IDR) process.

AFCA will consider the earlier of these two dates and will only consider complaints outside these timeframes in special circumstances. 

Do I need to complain to the insurer first?

Yes. Before AFCA can investigate your complaint, you must first give your insurer the opportunity to resolve the issue through their internal dispute resolution (IDR) process.

This means:

• You must raise the complaint with the insurer directly.
• The insurer has up to 30 calendar days to respond to your complaint in writing

AFCA generally won’t consider your complaint unless the insurer has issued a final response letter or the time limit to respond has expired.

You do not need to accept the insurer’s final response, you only need to give them a fair opportunity to resolve it. 

What rules does AFCA follow when resolving complaints?

AFCA’s decisions are guided by:

• Your insurance policy wording (make sure you read the relevant policy wording before lodging a complaint!)
• The AFCA Rules and Operational Guidelines
• Previous AFCA decisions
• Relevant laws (such as the Insurance Contracts Act)
• Industry codes (such as the General Insurance Code of Practice) and good industry practice
• What is fair and reasonable in the circumstances

What is the secret to a favourable AFCA determination?

There’s no “magic” that guarantees a win at AFCA, but the most important factor in any complaint is usually evidence. 

AFCA doesn’t just look at what each side says. It weighs the persuasiveness of the evidence provided by both parties. Whether you’re disputing an insurer’s denial of liability or the adequacy of a settlement offer, Insurers are often well-prepared with reports from qualified experts, such as engineers, loss adjusters, hydrologists, mechanics, motor vehicle assessors or investigators. The reports are tailored to address the core issues that AFCA will need to decide.

If you don’t provide counter evidence, your complaint may be unsuccessful, not because you were wrong, but because the insurer’s evidence went unchallenged.   

Why is the insurer making these settlement offers?

As your complaint progresses through the AFCA process, it’s common for the insurer to start making settlement offers.  This isn’t necessarily a sign they accept your complaint or believe they’ve done anything wrong.

Insurers are required to pay fees to AFCA at each stage of the process. The further your complaint goes, from registration to case management, then investigation and determination, the more it costs them. For this reason, insurers can begin to make settlement offers to resolve complaints early, by making you a financial offer.

Generally: 

• The offer does not reflect an admission of fault or liability
• The insurer is not agreeing with your version of events
• The offer is simply an attempt to resolve the complaint and avoid further cost or risk

AFCA also actively encourages early resolution. During the case management stage, AFCA may ask both parties whether they are open to settlement discussions and help clarify what outcome you’re seeking.