Last updated 1 September 2022

An insured may believe their insurer’s claims procedure is not fair or that a claims decision is wrong or unreasonable.

Generally, procedural matters should first be raised with the claims officer. If no acceptable result is forthcoming, the insured should discuss the matter with the relevant claims manager. This may resolve the problem but if not, a formal letter of complaint should be written to the Internal Dispute Resolution (IDR) officer as soon as practicable after the claims decision for insurer response within 45 days.

Serious procedural and claims decision disputes should be discussed with a solicitor immediately. A solicitor will be able to advise policy interpretation and options within a reasonable timeframe. Hopefully, a solicitor’s letter and negotiation by telephone will be all that is required.

Australian Financial Complaints Authority complaints scheme

Most leading Australian insurers and brokers are members of the Australian Financial Complaints Authority (AFCA). The authority fields general enquiries and runs a complaints scheme, including a panel that makes decisions. AFCA is currently able to make binding decisions on personal and small business insurance claims of up to $500 000 in value.

Complaints to AFCA against any insurance service provider should be made as soon as practicable but within six years of the cause of action accruing and within two years of any IDR decision. The complaint may be lodged online or in hard copy. The authority allows respondents 35 days to resolve the dispute by IDR; when no agreement is reached within that time, the AFCA complaint then proceeds.

Once the complaint is accepted by AFCA, there is an exchange of documents from both sides; an AFCA dispute officer prepares the case and presents it to the decision-making body (e.g. a dispute analyst or panel). AFCA also has power to negotiate or conciliate a resolution. Once the authority has made an arbitration decision, both the insured and respondent are notified. A decision must be accepted or rejected within 30 days.

There are some limits to the Australian Financial Complaints Authority Operational Guidelines to the Rules, for example in matters of alleged fraud. It is usually best to consult a solicitor before lodging a complaint. Although strict rules of evidence law do not apply, thorough case preparation, including expert examination and reporting, is important. Upon notice of an AFCA complaint, the respondent may well instruct their own specialist staff and defence lawyers. Complaint applications have no filing fee, and each party generally bears its own legal costs, although up to $5000 for the insured’s costs may be awarded.

The AFCA dispute resolution procedure may be a suitable arbitration process to the insured, if not as speedy as sometimes hoped. If the insured accepts the decision, the respondent must pay the decided amount (subject to a reasonable release document); but if not, the insured is still free to pursue their rights to sue in a court of law.


Where a significant claims dispute arrives at an impasse, legal action may be unavoidable. Legal representation is recommended for any litigation action, as the respondent will likely instruct specialist lawyers to defend the claim. There are a number of procedural steps before a matter reaches court, and these ordinarily require the attention of a solicitor experienced in insurance disputes. Most of the relevant procedural rules and forms are found in the Uniform Civil Procedure Rules 1999 (Qld), and further information can be found on the Queensland Courts website. Contact details of solicitors experienced in insurance law are available from the Queensland Law Society referral service.

When a liability insurer agrees to indemnify an insured under a contract of insurance, the insurer is usually entitled both under the common law and under an express term of the insurance contract to be ‘subrogated’ to the rights of the insured. This means that if a third party has contributed to the loss and damage through negligence or breach of contract, the insurer can advance a civil cross-claim against that party in the name of the insured. This can sometimes run counter to an insured’s commercial interests. Where a single firm of solicitors is appointed to act for insurer and insured, potential conflict-of-interest issues arising out of any cross-claims need to be carefully managed.