Annual Review 2021–22

General insurance complaints

Between 1 July 2021 and 30 June 2022

18,563 complaints received

44% resolved at Registration and Referral stage

General insurance complaints received

General insurance complaints received chart

Percentage of general insurance complaints resolved at Registration and Referral stage

Percentage of general insurance complaints resolved at Registration and Referral stage chart

Top five general insurance complaints received by product


2018–19 1




Home building





Motor vehicle-comprehensive





Home contents





Consumer credit insurance





Motor Vehicle-uninsured third party





Top five general insurance complaints received by issue


2018–19 1




Delay in claim handling





Claim amount





Denial of claim – exclusion /condition





Denial of claim





Service quality





17,244 complaints closed

Average time to close a complaint78 days

General insurance complaints closed

General insurance complaints closed chart

Average time to close a general insurance complaint in days

Average time to close a general insurance complaint in days chart

Stage at which general insurance complaints closed


2018–19 1




At Registration





At Case Management





At Rules Review





Preliminary Assessment










Average time taken to close general insurance complaints


2018–19 1




Closed in 0–30 days





Closed in 31–60 days





Closed in 61–180 days





Closed in 181–365 days





Closed in in more than 365 days






1 AFCA commenced on 1 November 2018. The 2018–19 financial year covers an 8-month period (from 1 Nov 2018 to 30 Jun 2019). Year-on-year changes between 18–19 and 19–20 have been calculated pro rata using monthly averages.

The general insurance products that AFCA can consider complaints about include:

  • small business policies (including Business Interruption, but excluding professional indemnity or legal liability)
  • consumer credit insurance
  • home building
  • home contents
  • motor vehicle
  • personal and domestic property (including pleasure crafts)
  • residential strata title
  • sickness and accident
  • travel insurance

The types of issues and problems AFCA resolves include:

  • decisions a financial firm has made, such as denial of an insurance claim
  • delays or complaints about an insurer’s service
  • complaints about rebuilding and repairs to houses and motor vehicles
  • incorrect application of, or misrepresentation about, insurance premiums
  • misleading or incorrect information about an insurance product or service
  • not following a complainant’s instructions
  • privacy and confidentiality breaches.

Key insights:

  • This year saw significant increases in general insurance complaints received by AFCA.
  • There has been a 54% increase in complaints about delayed in claims handling, largely due to the effects of several significant natural disasters, most notably the severe weather and flooding in southern Queensland and northern New South Wales in February 2022.

During the 2021–22 financial year, AFCA received 18,563 general insurance complaints. This made up 26% of the total complaints received by AFCA.

AFCA closed 17,244 general insurance complaints, with:

  • 7,606 complaints closed at Registration and Referral
  • 3,984 complaints closed at Case Management
  • 2,247 progressing through to the final Decision stage.

The average time taken to close these complaints was 78 days, with 56% of complaints being closed within 60 days.

Most complaints received were about delays in claim handling (4,804), claim amount (3,747) and denial of claim – exclusion/condition (3,111).

Delays in claims handling has been in the top three issues for the last several years, with an increase of 54% this year.

Several factors are influencing this, but natural disasters are having the largest effect. Natural disasters 1 generated 1,586 complaints, more than double the 653 complaints in the previous year.

As well as the effects of significant and widespread natural disasters, delays in claim handling have been affected by a range of environmental, economic and sector specific factors including:

  • supply chain issues leading to a shortage of trades and materials due to COVID and the war in Ukraine
  • insurers’ resourcing issues due to competition for labour and the need for more resources to handle claim volumes
  • poor communication by insurers with consumers
  • poor quality of works
  • restructuring of insurers’ businesses
  • complainant vulnerabilities
  • mismatch between complainants’ expectations of policy coverage and policy wording.

Insurers’ responses to natural disasters also meant that home building insurance was in the top five most commonly complained about products this year, with a very large jump of 74% in complaints. We also saw a 30% rise in complaints about motor vehicle insurance.

We acknowledge that insurers are facing challenges as they try to manage claims and get people back on their feet following natural disasters. We know there are significant issues with the supply of building materials, parts and labour because of national and global events outside their control.

However, we are concerned about the rise in complaints being escalated to AFCA. We are particularly concerned when an insurance claim has been lodged with an insurer and the consumer comes to AFCA because there has been no contact from the insurer. We want to better understand the causes of these complaints and we are working with insurers to help them resolve disputes more quickly and, ultimately, to prevent them. We encourage firms to explore ways to lift the resolution rate at Registration and Referral above 44%.

We promote early resolution at this stage, if the outcome is fair for both parties, because it’s efficient and cost-effective for firms and it helps takes away anxiety and uncertainty for complainants.

AFCA has also issued a fact sheet about home insurance claim delays and COVID-19. In addition there’s an Approach document about motor vehicle insurance claim delays to help explain how we approach complaints about delays, and what we expect firms to do.

We urge insurers to be proactive and innovative in resolving complaints early, including by communicating regularly and effectively with their customers about delays in claim finalisation.

By prioritising resources, support and training for claims and complaints teams, insurers can help their customers and communities get back on their feet. An effective focus on vulnerable customers by directly addressing their needs will both help people resolve their claims and potentially reduce the number and duration of complaints.

In 2022–23 AFCA will expect insurers to increase their early resolution outcomes and change practices to reduce complaints about service and delays.


1 Excluding COVID-19 related complaints.

Case study


The complainant lodged a claim with their insurer for storm damage. The insurer partially accepted the claim. However, it denied aspects of it as they were not caused by the storm.

The parties also disputed the scope of works required for mould remediation and the additional building repairs. The complainant also sought compensation for her claims experience.

Outcome and findings

The panel that made the decision found the insurer’s expert’s initial assessment of damage was not thorough and likely caused some delays.

The insurer may also have contributed to the loss by not conducting any remediation or drying. This no doubt caused stress and inconvenience to the complainant.

The panel accepted the insurer had taken further steps to engage other experts and had overall assessed the claim correctly and fairly.

The insurer had already offered to waive the $1,000 excess applicable to the claim under the policy. The panel decided that, in addition to waiving the excess, and in view of the initial stress and inconvenience caused, the insurer should pay the complainant $1,500 compensation for non-financial loss.

Case studies are used to demonstrate AFCA’s approach to an issue and have been simplified for length and clarity.

Case study


The complainant lodged a claim for storm damage. The insurer accepted the claim. However, the parties disputed the extent of works and the insurer’s decision to cash settle the claim. The complainant also said the insurer handled the claim in an unprofessional manner.

There was no record of extended periods of inaction by the insurer. Available information showed the insurer’s claims assessment company made numerous attempts to contact the complainant and arrange re-assessment. It also showed different trades/experts were appointed to determine the extent of loss/damage to building and contents from the claimed storm event.

Outcome and findings

As the available information did not show the insurer handled the claim unreasonably, no compensation was awarded.

Case studies are used to demonstrate AFCA’s approach to an issue and have been simplified for length and clarity.

AFCA uses expert Panels to make determinations about particularly complex complaints we receive. Panel members are appointed by the AFCA Board based on their objectivity, qualifications, experience and relevant personal qualities.

Each panel that is formed to make a determination will normally have three members – a Chair (an AFCA Ombudsman), an industry representative and a consumer representative.

Business Interruption Insurance Test cases

AFCA has received a large number of complaints about claims under Business Interruption policies for COVID-19-related business interruptions.

Due to the important legal issues raised by these claims AFCA agreed to refer a number of complaints to the courts as test cases. The judgments in the test cases will inform how AFCA deals with the legal issues in these complaints.

Under the AFCA Rules, a financial firm must seek AFCA’s consent to bring a test case about a matter that would otherwise be handled by AFCA as a complaint.

AFCA cannot initiate its own test case and, once it provides approval to the financial firm, it is not involved in the filing or running of a test case or any appeals. AFCA does not provide any financial, legal or other support.

One of the factors considered before agreeing to allow a financial firm to treat a complaint as a test case is whether there are important issues of law to be decided.

In addition, the financial firm must meet AFCA requirements, such as agreeing to pay the complainants’ legal fees incurred in the test case.

Test case 1

A test case 1 considering the application of a common insurance policy exclusion relating to the repealed Quarantine Act 1908 (Cth) was heard by the NSW Court of Appeal on 2 October 2020.

The main purpose of the test case was to seek a decision from the court on whether, in policies issued to small businesses containing Business Interruption cover, references to a quarantinable disease under the Quarantine Act 1908 (Cth) should be construed as a reference to a listed human disease under the Biosecurity Act 2015 (Cth).

On 18 November 2020, the NSW Supreme Court of Appeal ruled that references in policies to the Quarantine Act did not exclude the two claims in the test case.

The Board of the Insurance Council of Australia (ICA) applied for special leave from the High Court of Australia to appeal the NSW Court of Appeal decision.

On 25 June 2021, the High Court denied this application for special leave to appeal. You can read the Insurance Council of Australia’s statement here:

Test case 2

A second test case 2 seeking judicial guidance on the application of particular policy wordings found in many Business Interruption policies, in relation to the COVID-19 pandemic was launched in September 2021. The Full Court of the Federal Court of Australia delivered its judgment in this case on 21 February 2022. 3

Applications for special leave to appeal to the High Court of Australia were filed by some of the parties about aspects of the judgment of the Full Court. The option to appeal the court’s decision was included in the original test case arrangements.

AFCA was not a party to the test cases and will await the High Court’s decision about whether it will grant special leave to appeal.

AFCA will remain in communication with policyholders and insurers about the status of their complaints.

In the meantime, any small business with a Business Interruption policy that is dissatisfied with an insurer’s decision about COVID coverage can lodge a complaint with their insurer. If they do not agree with the outcome of that internal complaint process they can then lodge a complaint with AFCA at no cost.


1 HDI Global Specialty SE v Wonkana No. 3 Pty Ltd [2020] NSWCA 296

2 Swiss Re International Se v LCA Marrickville Pty Limited (Second COVID-19 insurance test cases) [2021] FCA 1206

3 LCA Marrickville Pty Limited v Swiss Re International SE [2022] FCAFC 17

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