Annual Review 2022–23

About significant events

AFCA has a response plan that we activate for significant events (e.g. natural disasters, severe weather) that are likely to lead to a large number of related complaints.

This plan provides for early communication with relevant stakeholders and a more streamlined, faster process for resolving related complaints.

To ensure we’re appropriately handling these disputes, AFCA regularly engages with industry partners including ASIC, the Federal Treasury and APRA, as well as industry representative groups such as the Insurance Council of Australia (ICA).

As the climate continues to change, both in Australia and around the world, natural disasters such as floods and bushfires will become more common. In the last year alone, millions of Australians were affected by catastrophic events. These events not only destroyed homes, schools, businesses and critical infrastructure, but severely impacted hundreds of families and their communities.

AFCA often sees financial complaints after natural disasters. We track these complaints to share data and insights with our stakeholders. However, we know that behind each complaint is a person or family recovering from tragedy. To support complainants in vulnerable circumstances, we have special processes in place.

 

Over this financial year, AFCA responded swiftly to four significant events to help those in need. These included the following storm and flood events that affected:

  • NSW in July 2022
  • Victoria, NSW and Tasmania in October 2022
  • Central West NSW in November 2022. 

AFCA was also prepared to respond to the Newcastle hailstorm in May 2023. However, as at 30 June 2023, we had not received a complaint.

We kept oversight on the complaints resulting from the severe weather and flooding in South East Queensland and NSW in February 2022, which had been declared a ‘significant event’ by the ICA.

NSW Storms and Floods July 2022

As at 30 June 2023 

201 complaints received
146 complaints resolved
1 complaint related to financial difficulty

Top five issues in complaints

Issue 

Total 

Denial of claim – exclusion/condition 

85 

Delay in claim handling 

59 

Claim amount 

48 

Denial of claim 

20 

Service quality 


Most complaints arising from the NSW storms and floods in July 2022, were about the denial of a claim due to an exclusion or condition (85 or 42%). For this event we received 201 complaints and resolved 146. Only one related to financial difficulty.

VIC, NSW and TAS Storms and Floods October 2022

As at 30 June 2023

211 complaints received
123 complaints resolved
1 complaint related to financial difficulty.

Top five issues in complaints 

Issue 

Total 

Denial of claim – exclusion/condition 

70 

Delay in claim handling 

55 

Claim amount 

47 

Denial of claim 

35 

Service quality 


AFCA received 211 complaints arising from the storms and floods affecting Victoria, New South Wales and Tasmania in October 2022, and we resolved 123. Only one related to financial hardship. The main issue raised was the denial of claims due to an exclusion or condition (70 or 33%). 

Central West NSW Storms and Floods November 2022

As at 30 June 2023

6 complaints were received 
1 complaint was resolved 

Top five issues in complaints

Issue 

Total 

Denial of claim – exclusion/condition 

Claim amount 

Delay in claim handling 

Denial of claim 

NA 

NA 


In November 2022, the Central West of NSW was affected by severe storms and floods. AFCA received six related complaints and resolved one. No complaints were associated with financial hardship. The main cause of complaint was denial of a claim due to an exclusion or condition (3 or 45%).

South East QLD and NSW Severe Weather and Flooding February 2022

As at June 2023

2,468 complaints received (since being declared in February 2022)
1,997 complaints resolved (since being declared in February 2022 to 30 June 2023)
18 complaints related to financial difficulty (since being declared in February 2022)

Top five issues in complaints (since being declared in February 2022) 

Issue 

Total 

Delay in claim handling 

858 

Denial of claim – exclusion/condition 

821 

Claim amount 

680 

Denial of claim 

164 

Service quality 

141 


AFCA received 2,468 complaints and resolved 1,997 following the severe weather and flooding event that struck South East Queensland and NSW in February 2022. Only 18 complaints related to financial hardship. Delay in claim handling and the denial of a claim due to an exclusion or condition accounted for 858 (35%) and 821 (33%), respectively.

Case study

Background

The complainants lodged a home and contents claim after a severe weather event. The insurer declined part of the claim as it said it was caused by flood, which was excluded under the policy. The complainants said that all the internal damage was caused by stormwater entering the home before the floodwater entered the home. The complainants had cover for storm, rainwater or run-off.

Findings and outcome

The panel reviewed the available evidence including the insurer’s hydrologist report, and also eyewitness reports and photos provided by the complainants. On consideration of the evidence, the panel found that the hydrologist report did not state the time of the initial inundation, or its cause, and concluded that the insurer had not shown the disputed damage was first caused by flood water. The panel found that the damage was, on balance, sustained due to stormwater ingress before the home was affected by flood. The insurer had not established that the flood exclusion applied and, therefore, it must accept the disputed damage claim.

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