Though insurers pay more than 97 per cent of the claims they receive according to the Financial Ombudsman Service,* sometimes the insurance company and the customer disagree on the insurer’s decision.

Under Australian law, insurers are required to have in place two distinct complaints processes. One must be an internal complaints process within the insurance company and the other must be must be an external dispute resolution scheme that is independent from the insurer. This ensures that disputes between insurers and policyholders are resolved in a fair and straightforward fashion.

* Financial Ombudsman Service General Insurance Code of Practice Overview for the Year 2011-12

What can you do if your claim is rejected, or you are not satisfied with what you receive?

Your insurance company may turn down your claim because you haven’t supplied enough information or because it believes your policy does not cover the loss or incident for which you are making a claim.

Your insurer may also decide to pay only a portion of the claim, for instance if you are underinsured, the policy has claim limits for certain defined risks, or if the event causes some additional damage not covered by the policy.

Common reasons that insurers deny claims include:

  • Policy exclusions. Insurance policies contain a list of exclusions outlining specific situations, circumstances or events your insurer will not cover you for when you make a claim
  • Conditions and responsibilities. You may not have met conditions outlined in your policy
  • Cancellation of your policy. Usually, if your policy has not been renewed, has been cancelled or you have not paid the premium, you will not be able to make a claim
  • Non-disclosure. You are obliged to tell the insurer about anything that might affect your risk when you take out or renew an insurance policy. Failure to disclose may affect your ability to claim on your policy
  • Failing to maintain your property. Your claim may be turned down or affected because you have not looked after your property properly to reduce the risk of damage

If you are unhappy with your insurance company’s decision on your claim, you can ask that your case be reviewed.

All insurance companies are required to have their own internal dispute resolution system, and are also required to be a member of an external dispute resolution scheme.

If, after an internal review, you are still unhappy with your insurer’s decision you can take your claim to the approved external dispute resolution scheme, or you can start a legal action against the insurance company. You can also contact the Australian Securities and Investments Commission (ASIC) to complain about your insurer if you believe the insurer’s conduct could affect other customers.

The treatment of customers and resolving disputes is an important part of the General Insurance Code of Practice. The code requires insurers to be open, fair and honest in dealings with customers and commits insurers to high standards of service when selling insurance, dealing with claims, responding to catastrophes and disasters and handling complaints.


Internal dispute resolution

Every insurance company must provide you with information on its internal dispute resolution process. This will include details of what you must do to lodge a complaint and how the insurance company will undertake to deal with the complaint. This information will be included in the Product Disclosure Statement.

Most insurers will also set out the internal dispute resolution process on their website.

You can use the internal dispute resolution process to address any issues you may have with the insurance company, the insurance company’s staff, an agent of the insurance company, or a loss adjuster, assessor or investigator.

The insurance company will allocate a person who has decision-making authority to review your dispute. This person is responsible for writing to you within 15 business days to let you know the outcome of the dispute, so long as the insurer has all relevant information.

Your insurer will work with you to resolve all complaints and disputes quickly and fairly. It will keep you informed of the progress of the response to your complaint. If you have lodged a dispute, your insurer will keep you informed of the progress of their review of your dispute at least every 10 business days.

Usually the internal dispute resolution team can sort out any problems you have, but if your dispute remains unresolved or you are unhappy with the decision, your insurer will provide you with information about options available to you.

This includes referring you to the free and independent external dispute resolution scheme administered by the Financial Ombudsman Service (FOS).


External dispute resolution

If you are not satisfied with the result of the internal dispute resolution process, you can choose to go through the approved external dispute resolution process.

The Financial Ombudsman Service independently and impartially examines general insurance disputes between general insurance companies and customers who hold policies for home and contents, motor vehicle, travel and other forms of general insurance.

FOS is independent and provides a free service for consumers. It can mediate between the insurer and the consumer, and when mediation is unsuccessful, an ombudsman can make a determination. FOS decisions are legally binding on the insurance company but you are not bound by its decisions.

You should contact FOS as soon as possible if you are dissatisfied with your insurer's internal dispute resolution decision.

Before FOS can consider your case, your insurance provider must have been given an opportunity to resolve the dispute with you directly. In most cases, your insurer has up to 45 days to respond to your complaint.

Visit the FOS website for more information about the dispute handling process, or to lodge a dispute with the FOS online click here.

You can contact FOS by:

  • Telephone: 1300 780 808 (for the cost of a local call)
  • Fax: (03) 9613 6399
  • Email:
  • Mail: Financial Ombudsman Service GPO Box 3 Melbourne VIC 3001
  • Visiting:

Resolving disputes

Before you complain

Making a complaint

Ask for an internal review

Contact an external dispute resolution scheme

Taking your dispute further