Record Insurance Complaints Surge in Australia Amid Claims Handling Crisis
Insurance companies in Australia are generating an unprecedented 100 complaints per day as they reject or struggle to manage everyday claims, according to exclusive data from the Australian Financial Complaints Authority (AFCA). This surge highlights a deepening crisis in the industry, with delays and denials leaving customers in financial and emotional distress.
Personal Stories of Prolonged Struggles
Rick Maloney from Mooroopna, Victoria, exemplifies the ordeal faced by many. After his home flooded in 2022, he battled for two years before his insurer paid for repairs. During that time, the building sank into soft earth, and mushrooms grew between the floorboards. "I had the skirtings coming away from the walls, I had cracking in the walls ... [but the insurer would] push me down another avenue ... time-wasting, in the hope that I’d just walk away," Maloney recounts. His case, resolved only in January 2025 after AFCA intervention, underscores the systemic issues plaguing the sector.
Data Reveals Alarming Trends
AFCA's data shows that home-building insurance complaints have risen to their highest level since 2022-23, averaging 24 per day in the first quarter of 2026. Motor vehicle insurance complaints have increased to 44 per day, up from 31 daily in the previous financial year. Notably, delays in processing claims account for nearly a quarter of all complaints, as highlighted by Emma Curtis, AFCA's lead ombudsman for insurance.
Key factors driving these delays include:
- Shortages of materials and builders for home repairs.
- Lack of spare parts and mechanics, especially for electric vehicles, with EV sales hitting record highs.
- Under-resourced claims-handling teams within insurance companies.
Industry Response and Internal Challenges
The Insurance Council of Australia (ICA) reports that insurers processed an average of 86,000 motor and household claims daily in 2025. An ICA spokesperson noted that 1.7 million of the 2 million internal complaints to general insurers last financial year were closed within a day, with only 14,600 taking over 30 days. However, AFCA data reveals that nearly two in five complaints reaching the authority in 2024-25 were not logged internally by insurers, indicating potential trust issues or poor complaint identification.
Emma Curtis emphasizes, "Insurers need to put more resourcing into claims and complaints management. The customer is entitled to expect that they will get the products that they’re paying for or the service that they’re paying for at the time that they need it."
Worsening Conditions and Vulnerable Customers
The situation is expected to deteriorate as rising fuel and freight costs, exacerbated by global conflicts like the US-Israel war on Iran, push up prices and slow repairs. AFCA predicts that vulnerable customers will be disproportionately affected, with complaints from those in hardship rising to 14 per day in 2025. Cases include individuals left effectively homeless when insurers stopped paying for temporary accommodation amid claim denials or delays.
Meg Dalling, assistant director of policy at the Consumer Action Law Centre, criticizes the industry's lack of progress since a 2024 parliamentary inquiry into the 2022 east coast floods. "What we saw after that parliamentary inquiry was a lot of really vocal commitments from the insurance industry to really clean up their act. We’re still not seeing them really move the dial," she states.
Corporate Statements and Future Outlook
A spokesperson for Suncorp, which owns brands like Aami and GIO, acknowledged AFCA's oversight, saying, "We understand that flood events are deeply distressing for homeowners and we appreciate the independent oversight provided by AFCA. Our priority is to resolve concerns as early as possible and we’re continuing to invest across the organisation to support our customers." Despite such assurances, advocates like Maloney call for stronger parliamentary action to protect consumers. "We need someone in parliament to actually bat for the little man against these insurance companies to ensure that everything’s efficient," he urges.
As extreme weather events cost Australia $4.5 billion annually—three times more than in the 1990s—the insurance industry faces mounting pressure to improve its claims handling and transparency to address this escalating crisis.
