Insurance dispute resolution

This fact sheet is for information only. It is recommended that you get legal advice about your situation.


Dan was very frustrated with his insurance company. After an accident at a roundabout 8 months ago he had put in a claim on his comprehensive car insurance policy. Since then the insurer had asked him for information every few weeks but his car is still not fixed. Dan started getting upset about the delay around 4 months ago but despite this he still does not have a decision from the insurer on his claim.

Dan rang the Insurance Law Service, where a solicitor explained that when he complained about the delay 4 months ago he had already raised a dispute. His options were to either: escalate his complaint to the insurer or lodge a dispute in the Australian Financial Complaints Authority.

This fact sheet will outline the process involved in raising a dispute with your insurance company.

This fact sheet also covers the limited circumstance in which you are an uninsured driver, involved in a car accident where you are not at fault, and the other party has insurance and your claim for damage is less than $15,000.


Australian Financial Complaints Authority

www.afca.org.au              Phone: 1800 931 678

The Australian Financial Complaints Authority (AFCA) is an External Dispute Resolution (EDR) provider which can be used to resolve disputes between consumers and their insurers. AFCA is funded by its members, which includes insurance companies and brokers.

AFCA is the main way to resolve an insurance related dispute and is much better than going to Court because:

  1. It is free for consumers;
  2. It is independent (despite being funded by industry);
  3. A decision will (usually) be made by AFCA if the parties cannot negotiate a solution. The decision is binding on the insurer if you accept the decision. If you don’t accept the decision, you may still go to Court (subject to any time limits).

AFCA has jurisdiction to hear disputes with insurance companies which fall within the following:

  • Involves an insurance dispute (i.e. motor vehicle, home and contents insurance, life insurance, travel insurance); AND
  • Involves a policy which you are a policyholder or a beneficiary;
  • Superannuation disputes, including insurance claims.

There is an exception to this where you are

  1. Uninsured, AND
  2. Involved in a car accident with an insured driver who is at fault; AND
  3. A valid claim has been lodged by the insured driver, or the insured driver has passed away or cannot be found; AND
  4. The amount you are seeking is under $15,000

If you are unsure of whether your dispute falls within AFCA Terms of Reference, you can:

  • Ring AFCA on 1800 931 678; and
  • Search their Terms of Reference on the website


Before contacting your own insurer, it’s often a good idea to read the Product Disclosure Statement so you can understand what the insurer has contracted to perform.

If you are dealing with another’s person insurer and claiming under $15,000, see our I’ve had a car accident and I’m uninsured fact sheet for further information.

You should first raise your dispute with the insurer. This does not have to be in writing, you may want to telephone and say:

  1. That you are lodging a formal dispute;
  2. What the problem is; and
  3. What you want the insurer to do to fix the problem.

You do not need to speak to a particular section of the insurer it can be anybody working at the insurer.  Contact details for your insurer’s complaints department can be found through an AFCA search here: ‘find a financial firm’.

Don’t worry about exactly what you say. It does not have to be perfect, but rather make it clear that you have a problem. Common problems include:

  1. Delay;
  2. You are not happy with the amount of a settlement or extent of repair; or
  3. You are not happy with the quality of repairs.

You do not have to accept the resolution offered if it does not resolve the problem. You should always consider fair compromises. If you are not sure what to do, say you will get advice and telephone back.

In most cases, the insurance company has up to 45 days to respond to your complaint.


If you are not satisfied with the outcome from the insurer, OR 45 days passes without a response, you can lodge a dispute with AFCA.

The easiest way to do this is via the internet using the AFCA website at afca.org.au though you can also complete a hard copy application. If you lodge the dispute online, it will be received immediately.

There are two detailed parts of the dispute/complaint form to complete:


Write a simple description of how your problem arose. For example:

I had a car accident in which I was at fault. My insurer will not begin fixing my car until I have paid the excess upfront. I am currently unemployed and cannot afford to pay the excess in one lump sum. The other driver is threatening court action against me.


Write how you want the dispute resolved. For example:

  1. For the insurer to immediately commence repairs on my car and handle any negotiations or court proceedings with the other driver;
  2. For me to enter into an affordable repayment arrangement, because I can not afford to pay the excess outright

Hints for lodging a dispute with AFCA

  • Keep the information in your dispute simple to start with as you can add further information later;
  • Keep a copy of your dispute form;
  • AFCA has different compensation caps applying to different types of complaints.  For most complaints AFCA can award a maximum of $500,000 for direct financial loss, and they cannot investigate complaints where losses exceed $1,000,000. Get advice if the value of your insurance claims exceeds $500,000;
  • AFCA also has limited capacity to provide other compensation. AFCA can award up to $5000 for consequential financial loss and $5000 for non–financial loss (i.e. an excessive amount of stress and inconvenience caused). You need to request this form of compensation, and supply any relevant evidence such as chronological or medical certificates.  AFCA does tend to be conservative with non-financial loss.
  • In a superannuation dispute AFCA has an unlimited compensation and monetary limit cap, but are limited in awarding consequential and non-financial loss.
  • Time limits do apply to lodging complaints in AFCA – get advice if you have any concerns.


  1. Initial review by AFCA

AFCA will initially try and resolve the dispute by mutual agreement. They may use alternatives such as conciliation conferences or negotiations between the parties, if appropriate.

You can continue to make settlement offers throughout the AFCA process.

  1. Investigation

If a dispute cannot be resolved by mutual agreement, AFCA will conduct a detailed investigation and may request additional information from either party to gain a holistic understanding of the problem.

It is up to you to provide sufficient evidence to establish your dispute.  For example:

  • If you disagree with the insurer’s expert reports or opinions (e.g. about how repairs should be carried out, or how damage occurred), you should consider obtaining your own comprehensive expert evidence to establish your case, and point out any flaws in the insurer’s evidence. AFCA can be heavily reliant on expert reports
  • If your dispute relies on your memory or word of mouth, you should consider preparing a statutory declaration from yourself and any other witnesses, in as much detail as possible and preferably in chronological form
  • If you are arguing about fault in a car accident and whether you should be liable for an excess, you should provide diagrams of how the accident happened, copies of relevant road rules, police reports, any CCTV footage etc.
  • The insurer may have evidence that could assist your claim. You can request the insurer provide copies of any relevant evidence – expert reports, policy documents, phone recordings/transcripts, interview transcripts, underwriting guidelines etc.

If you are not sure what evidence you need, get legal advice.

AFCA may prepare a recommendation giving the parties their assessment of the merits of the complaint, if it is likely to assist the parties to reach a resolution.  If both parties accept the recommendation, it becomes a binding agreement.  If any party rejects it, AFCA will accept further submissions and evidence before making a determination.

TIP: Always respond by the due date set with any information and documents requested by AFCA. If you need more time to get the information seek an extension from AFCA on time to respond.

  1. Determination

If the complaint remains unresolved, AFCA will issue a Determination. This is AFCA’s final decision, and cannot be appealed.

If AFCA finds in your favour and you choose to accept the determination, the insurance company will be bound by the decision. If you disagree with AFCA’s decision, you do not have to accept it and can take your matter to court (subject to any time limits). It is strongly advised that you get legal advice before doing so.


Tanya was involved in a car accident with Paul, and Paul acknowledges he is at fault. Tanya does not have insurance and Paul has insurance with BIG INSURER. Paul has lodged a claim with BIG INSURER, who assessed Tanya’s car and offered $1500 for the repairs. Tanya has had an independent smash repairer assess her car and they quoted $2700 for the repairs. Tanya and BIG INSURER cannot agree, so Tanya lodges with AFCA. Whilst in AFCA, Tanya and BIG INSURER are able to enter a negotiated settlement about the cost of repairs to Tanya’s car. Tanya accepts $2400 after she has obtained a second opinion.


See Fact sheet: Getting help for a list of additional resources.

Last Updated: July 2019.