Tab 6 of 6 · When a claim is refused
When a claim is refused: reasons, a complaint, then AFCA
If an insurer denies a claim or does not pay it in full, a Code insurer must tell you in writing what it did not accept and why, and how to complain. The route from there is a complaint to the insurer, which must answer within 30 calendar days or explain the delay in writing, and then the Australian Financial Complaints Authority (AFCA), which is free for complainants.
The written decision
Under the General Insurance Code of Practice, if an insurer denies your claim or does not pay it in full, it tells you in writing:
- the parts of the claim it does not accept;
- the reasons for its decision;
- that you can ask for the information about you that it relied on;
- that you can ask for copies of any service supplier or external expert reports it relied on; and
- how its complaints process works.
If you ask for that information or those reports, it gives them to you within 10 business days. Moneysmart notes that reports from specialists such as a hydrologist or an engineer may be needed to assess a claim.
Moneysmart’s advice at every point of a claim is to ask questions when something is unclear, to seek advice if you need it, and not to feel pressured to accept an offer without access to all the relevant information.
A complaint to the insurer
The formal step is a written complaint to the business, which Moneysmart calls internal dispute resolution (IDR). Its checklist for the letter or email:
- a heading or subject line that uses the word “complaint”;
- who you are and how to reach you, and the date you write;
- what went wrong and what you are asking the insurer to do, set out plainly;
- copies of the relevant documents, keeping the originals and a copy of the letter.
On receipt, a Code insurer acknowledges the complaint, names the person who will liaise with you, and has it handled by someone with the right authority who is not the person whose decision is being complained about. It updates you at least every 10 business days.
ASIC’s Regulatory Guide 271 sets the outer limit for financial firms: an IDR response to a standard complaint no later than 30 calendar days after receiving it. The Code matches it: a decision within 30 calendar days, or, before that deadline passes, a written explanation of the delay and of your right to go to AFCA, with its contact details.
The final response comes in writing for a complaint about a declined claim or the value of a claim, and it gives the reasons, your right to take the complaint to AFCA, AFCA’s contact details and the timeframe for complaining to AFCA. Keep that letter: its date matters at stage 3.
The Australian Financial Complaints Authority
AFCA considers complaints about general insurance, including home and contents and car insurance, from customers of insurers that are AFCA members. Among the issues it lists are the denial of a claim, the value of an assessed loss, and delays in making a decision. It does not handle private health insurance or workers compensation.
AFCA’s scheme is free of charge for complainants, who do not generally need legal or other paid representation. A complaint can be made online, by email, by phone or by post. The Code tells customers they can take a complaint to AFCA at any time, including when the insurer has not resolved it within 30 calendar days, and that AFCA may refer a complaint back to the insurer if it has not been through the insurer’s process first.
AFCA’s time limits
Two clocks, and the earlier one wins
For general insurance complaints, AFCA’s Rules (rule B.4.3, in the version released 12 March 2026) say it will generally not consider a complaint unless it is submitted before the earlier of these two limits:
| Clock | Starts | Length |
|---|---|---|
| Awareness of loss | The date you first became aware (or should reasonably have become aware) that you suffered the loss | 6 years |
| After the insurer’s final answer | The date of the insurer’s IDR response, if you received one before going to AFCA | 2 years |
AFCA may consider a complaint submitted after these limits if it considers that special circumstances apply. Its Rules and limits change from time to time, so the current version on AFCA’s website is the one that counts.
How an AFCA complaint ends
When AFCA receives a complaint it notifies the insurer and generally refers the complaint back to it first, with a timeframe to resolve it or state its position. AFCA describes what follows as working towards an outcome, informally where possible, or through a more detailed review.
Where a complaint goes to a preliminary assessment, the parties can accept it or ask for a determination. A determination is final and binding on both sides if the complainant accepts it within 30 days of receiving it. If the complainant does not, neither side is bound, and the complainant can take the matter to court or any other available action.
AFCA is not compulsory: a person may go to court or use another dispute forum instead. Moneysmart notes that free legal advice may be available from a community legal centre.
After a declared catastrophe
One more right sits outside the usual route. With an insurer that subscribes to the Code, if a property claim from an event the Insurance Council of Australia has declared a Catastrophe was finalised within one month of the event, you can ask for a review if you believe your loss was assessed incompletely or inaccurately, within 12 months of the claim being finalised, even if you agreed to the settlement, including a full or partial cash settlement.
And if a dispute is with how the Code itself was followed rather than with your claim, anyone can report an alleged breach to the Code Governance Committee (see the Code tab).