Insurance claim denied? How do I complain, and can AFCA help?
If your business insurance claim is denied, complain to the insurer first, in writing: under ASIC’s complaints standard, insurers generally have 30 calendar days to send a final answer with their reasons. If you’re still unhappy, a business with fewer than 100 employees can take the complaint to the Australian Financial Complaints Authority (AFCA) for free, but AFCA can’t hear complaints against an insurer about public liability, products liability or professional indemnity cover.
Before you complain.
Find out exactly why the claim was refused, and what the insurer relied on.
- Get the reasons Ask the insurer to put its decision and reasons in writing. If you complain and it still says no, its final answer has to address the issues you raised and set out its findings on the key facts, with the information behind them1.
- Ask what it relied on Under the General Insurance Code of Practice, insurers give you free access to the information they relied on in handling your claim, within 30 calendar days of asking2.
- Talk to your broker If you bought the policy through a broker, brokers who follow the Insurance Brokers Code of Practice say they’ll explain why a claim was declined and what you can do next, and “act as claims advocates” if it was unreasonably denied or reduced, to the extent their terms of engagement cover it3.
- The insurer’s duties Each side to an insurance contract must act with the utmost good faith5. Since 1 January 2022, insurers have had to handle and settle claims efficiently, honestly and fairly4.
- Which Code rules apply The Code’s claim timeframes, such as a decision within four months, apply only to “retail” products like car, home, contents and travel insurance, including those bought for a small business with fewer than 20 staff (or 100 for a manufacturer). They don’t apply to business packs, property, business interruption or liability policies2.
COVRA isn’t a broker or insurer, so it can’t take up a claim or complaint for you. See how COVRA works.
Step 1: complain to the insurer.
Every insurer and broker has an internal complaints process. AFCA expects you to use it first.
- Who must have one Insurers and brokers must run an internal complaints process that meets ASIC’s standards, and belong to AFCA1.
- How long it can take ASIC’s standard is a final written answer no later than 30 calendar days after the complaint is received. It can take longer only for a complex complaint or circumstances outside its control, and it must then write to explain the delay and tell you about AFCA. The standard formally covers “retail clients”, which may not include every business policy, but AFCA uses the same timeframe when it sends a complaint back to an insurer1, 7.
- What the answer must say The outcome, its reasons, your right to take the complaint to AFCA, and AFCA’s contact details. A declined claim, or a dispute about a claim’s value, always gets a written answer1.
- Delays count A complaint about how a claim is handled, such as long delays or unreasonable requests for information, is a complaint too1.
- Complaints about a broker Go to the broker’s own complaints process first. Brokers must have one too, and belong to AFCA1.
Timeframes at a glance.
From your complaint to an AFCA decision.
| Stage | Timeframe |
|---|---|
| The insurer’s final answer to your complaint | Generally 30 calendar days, ASIC’s standard1 |
| Information the insurer relied on | Within 30 calendar days of asking2 |
| Lodging with AFCA | The earlier of two years after the insurer’s final answer, or six years after you knew, or should have known, of the loss6 |
| AFCA sends it back to the insurer | Usually 21 days for the insurer to resolve it or give its position7 |
| Replying to AFCA’s preliminary assessment | Usually 30 days, or 7 for a fast-track complaint9 |
| Accepting a determination | Within 30 days of receiving it6 |
| AFCA’s average time to close, 2024–25 | 96 days for a general insurance complaint, 97 for a small business complaint about any product11 |
Step 2: take it to AFCA.
AFCA is the free, independent scheme for complaints about insurers and brokers. You can lodge online, by email, by phone or by post.
- Free The scheme is free for complainants. You don’t have to use it, and can go to court instead6.
- Who can use it A business with fewer than 100 employees when the problem happened. A business in a group of related companies with 100 or more employees in total can’t6.
- Time limits Generally the earlier of two years after the insurer’s final answer, or six years after you first knew, or should have known, of the loss. AFCA can make an exception in special circumstances6.
- How it works AFCA refers the complaint back to the insurer first. If that doesn’t settle it, AFCA works with both sides through negotiation or conciliation, then may give a preliminary assessment. If either side rejects that, it makes a decision, called a determination8, 9.
- How it decides On what’s fair in all the circumstances, having regard to the law, industry codes, good industry practice and its past determinations6.
- Binding or not A determination binds you and the insurer only if you accept it within 30 days. If you don’t, neither side is bound and you can go to court6. If an insurer doesn’t comply, AFCA reports it to ASIC9.
- How much it can award Up to $631,500 for a claim on an insurance policy, as long as the amount claimed isn’t more than $1,263,000, and up to $316,000 against a broker. Indirect and non-financial loss are capped at $6,300 each, and AFCA can’t award punitive damages6.
- New limits AFCA re-indexes its limits every three years. The next change is for complaints lodged from 1 January 20276.
What AFCA can’t hear.
For a small business, AFCA can only look at complaints against an insurer about certain covers.
- Covers it can hear Business interruption, glass, money, theft, general property, land transit, machinery breakdown, computer and electronic breakdown, and fire or accidental damage. For a claim, fire and accidental damage are limited to listed events such as fire, storm, flood, leaking pipes, impact, malicious damage and spoiled refrigerated goods6.
- Covers it can’t Legal liability (including public and products liability), professional indemnity, contractors all risks, fidelity guarantee and industrial special risks6, 8. See what public liability doesn’t cover.
- Complaints about your broker AFCA can still hear a complaint about how a broker followed your instructions or arranged a policy, for most types of policy7.
- Mixed policies It can look at the covered parts of a policy that also has excluded ones, such as accidental damage in an industrial special risks policy7.
- Other options Court6. Anyone can report a breach of the General Insurance Code to the Code Governance Committee, but it doesn’t resolve individual disputes or award compensation2, 13.
The Small Business Ombudsman’s 2020 insurance inquiry noted that AFCA “has limited ability to resolve small business insurance disputes in these products”14. The Insurance Council is redrafting the General Insurance Code, and the current Code stays in place while that happens15.
What AFCA’s figures show.
AFCA’s early figures for 2025–26, and its full review of 2024–25. Claim delays and rejections are among the top issues.
47%
Rise in general insurance complaints about rejected claims. Across all complaints, the top three issues were claim delays, service quality and claim rejection10.
4,648
Complaints from small businesses, up 4%. More than 40% were resolved at the referral stage11.
- General insurance, 2024–25 34,231 complaints. Delays in handling a claim drew 6,577, and denied claims 4,473, plus 2,503 more about an exclusion or condition. AFCA resolved 45% at the referral stage, and took 96 days on average11.
- Determinations, 2024–25 Of 4,781 determinations across all products, 31% went the complainant’s way. Of complaints closed before a determination, 73% were resolved by agreement or in the complainant’s favour11.
- Business pack claims, 2024–25 Insurers reported 73,413 claims lodged and 2,148 declined. For business and other non-retail policies, 58% of complaints resolved inside insurers went the customer’s way12.
The 2025–26 figures are preliminary. AFCA’s full data comes in its Annual Review later this year10.
Real cases.
AFCA decisions on small business claims. Every claim depends on the policy wording.
- Storm-damaged shedThe insurer accepted the roof damage but blamed the rest on the shed’s design and construction. AFCA found the storm’s extreme winds caused it, and ordered the claim accepted in full, plus up to $5,000 for the business’s expert reports. April 202616.
- Jeweller, theftA customer stole gold chains while one assistant was out of the room, and the claim was declined as left “unattended”. Other staff could see the roll, so AFCA ordered the claim paid with interest. December 202517. See retail shop insurance.
- Tradie, stolen toolsThe policy covered theft only after forcible and violent entry, with visible damage. There was no evidence of it, so AFCA upheld the decline. July 202618. See tradie insurance.
- Hair salon, Cyclone AlfredClosed for three days with no damage, and claimed the lost income. AFCA upheld the decline, as the policy didn’t cover closing for bad weather or safety concerns, and refused $1,500 for time spent on the claim and complaint. July 202619. See how business interruption insurance works.
Common questions.
Does AFCA handle complaints about business insurance?
Yes, for businesses with fewer than 100 employees, about covers such as business interruption, fire and storm damage, glass, theft, money and machinery breakdown. It can’t hear complaints against an insurer about public liability, products liability or professional indemnity cover.
What counts as a small business for AFCA?
A business with fewer than 100 employees when the problem happened. A business that’s part of a group of related companies with 100 or more employees in total is left out.
How long do I have to complain to AFCA?
Generally until the earlier of two years after the insurer’s final answer to your complaint, or six years after you first knew, or should have known, of the loss. AFCA can accept a later complaint in special circumstances.
How long does an AFCA complaint take?
In 2024–25, AFCA took 96 days on average to close a general insurance complaint, and resolved 45% at the referral stage, when it sends the complaint back to the insurer to sort out. Small business complaints about all financial products took 97 days on average.
Is it free to complain to AFCA?
Yes. AFCA’s complaint scheme is free for the people and businesses who complain.
Is an AFCA determination binding?
Only if you accept it within 30 days of receiving it, and then it binds you and the insurer. If you don’t accept it, neither side is bound and you can still go to court.
How long does an insurer have to respond to a complaint?
Generally 30 calendar days. That’s ASIC’s standard for a final written answer, with reasons and AFCA’s contact details. It can take longer only for a complex complaint or circumstances outside its control, and the insurer must write to explain the delay before the 30 days are up.
How much can AFCA award a small business?
For a claim on an insurance policy, up to $631,500, and the amount claimed can’t be more than $1,263,000. Indirect and non-financial loss are capped at $6,300 each. These limits apply to complaints lodged before 1 January 2027, when AFCA re-indexes them.
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Sources.
- Regulatory Guide 271: Internal dispute resolution, ASIC, 2 September 2021
- General Insurance Code of Practice, Insurance Council of Australia, October 2023
- Insurance Brokers Code of Practice, part 7, NIBA, 1 November 2023
- ASIC review finds insurers can and should improve claims handling (23-221MR), ASIC, 2023
- Insurance Contracts Act 1984, section 13, compilation No. 32, Federal Register of Legislation, 1 March 2024
- AFCA Complaint Resolution Scheme Rules, AFCA, 8 October 2026
- AFCA Operational Guidelines to the Rules, AFCA, 8 October 2026
- Information for small business, AFCA
- The process we follow, AFCA
- Record complaints mark third consecutive year above 100,000, AFCA, 4 August 2026
- Annual Review 2024–25, AFCA, 2025
- Industry Data and Compliance Report 2024–25, General Insurance Code Governance Committee, May 2026
- Report a concern, General Insurance Code Governance Committee
- Insurance Inquiry Report, Australian Small Business and Family Enterprise Ombudsman, December 2020
- Insurance industry opens consultation on new Code of Practice, Insurance Council of Australia, 24 June 2026
- Determination 12-25-208092, AFCA, 9 April 2026
- Determination 12-25-192146, AFCA, 12 December 2025
- Determination 12-26-378499, AFCA, 31 July 2026
- Determination 12-25-313222, AFCA, 17 July 2026