How to dispute a car insurance claim

If your car accident claim was declined in full or partially by your insurance company, they will be required to provide you with correspondence from your insurer explaining why your claim was rejected and why you’re not receiving any or only a partial payment.

Reading this can help you understand why your claim was denied by your insurer’s claim assessor.

Once you have all the information your insurer used to arrive at their conclusion, double check everything to ensure that there were no errors or misrepresentations. This includes checking the evidence you provided to your insurer, such as pictures of the accident or police reports.

Reading through your Product Disclosure Statement (PDS) can also help you know the inclusions and exclusions on your insurance policy, and it’s important to understand this when making a claim. The PDS should be available on the insurer’s website, but you can contact them to ask for a hard copy.

After reading their explanation and going over your PDS, no further action is required if you’re satisfied with the insurer’s decision. However, you can escalate the process if you still wish to dispute your car insurance claim.

Before moving on to the next step, it’s essential to understand what your insurance provider is obligated to do. If your insurer is a subscriber to the Insurance Council’s General Insurance Code of Practice, and they fully or partially decline your claim, they are required to tell you in writing:¹

• The aspects of your claim that they do not accept
• The reasons for their decision
• That you have the right to ask them for the information about you that they relied on when assessing your claim
• That you have the right to ask them for copies of any service suppliers’ or external experts; reports that they relied on, and then will give you that information or report within 10 business days
• About their complaints process

If you still believe your insurer has unfairly declined your claim, you should complain in writing to your insurer’s internal dispute resolution (IDR) team. The IDR department’s function within an insurer is to undertake a separate and independent review of customer complaints. This includes reviewing the outcome of claims.

They should keep you updated on their process and notify you about their final decision.

At this point, you should have a good idea as to why your claim was denied. If you’re still convinced your claim has been dismissed unfairly, you now have all the information you need to escalate your dispute even further.

The Australian Financial Complaints Authority (AFCA) is a non-government ombudsman service and an independent organisation that offers a free dispute resolution service for customers. All decisions they make, if they are accepted by you, are binding. You can seek guidance from AFCA in relation to their process and assistance lodging a formal dispute with them. Note that you must make a complaint within two years of receiving a written response from your insurer’s IDR.

When AFCA accepts a complaint, it will be formally registered and referred to a case manager who’ll assess your dispute. They will then communicate between you and the insurance company.

If you haven’t gone through the insurer’s IDR, you can still make a complaint to AFCA, though this must be within six years of the date the claim occurred.²

If you’re unhappy with AFCA’s decision or outcomes, you can still take further action.

You have the option of settling the dispute in court. Small claims tribunals and court cases differ from state to state. Contact your state’s legal centre or seek independent legal advice about the validity of your dispute if you wish to take legal action.

If you pursue legal action, you should ensure you have attempted all the steps above beforehand. Also, keep in mind the legal costs involved in taking action can be hefty.