Record Complaints Highlight Challenges in Australian Insurance Claims Processing

Data from the Australian Financial Complaints Authority (AFCA) reveals that insurance companies are generating a record 100 complaints per day. These complaints are predominantly related to delays in handling everyday claims, rather than issues stemming from natural disasters. Home-building insurance complaints have risen to their highest level since 2022-23, averaging 24 per day in the first three months of 2026. Motor vehicle insurance complaints have also increased, averaging 44 per day, up from 31 per day in the previous financial year.

For tradespeople, such delays can have severe consequences. A delayed claim for a damaged vehicle or stolen tools can disrupt business operations, leading to lost income and potential reputational damage. The root causes of these delays include shortages of materials and skilled labour, as well as insurers under-resourcing their claims-handling teams.

AFCA's lead ombudsman for insurance, Emma Curtis, attributes the delays to a lack of materials and builders or spare parts and mechanics, especially for electric vehicles. These shortages are expected to worsen as electric vehicle sales hit record highs. Additionally, internal complaints to general insurers have risen from 1.6 million in 2023-24 to nearly 2.1 million in 2024-25, indicating systemic issues within the industry.

To address these challenges, insurers are being urged to invest more resources into claims and complaints management. The Insurance Council of Australia (ICA) reports that insurers processed an average of 86,000 motor and household insurance claims daily in 2025. However, the council warns that delays are set to worsen as rising fuel and freight costs add to existing supply chain disruptions.

For tradespeople navigating this landscape, proactive measures can help mitigate the impact of claim delays:

• Maintain Detailed Records: Keep thorough documentation of all assets, including receipts and photographs, to expedite the claims process.
• Understand Policy Details: Familiarize yourself with the specifics of your insurance coverage to ensure you meet all requirements and avoid potential disputes.
• Engage with Insurers Promptly: Report claims as soon as possible and maintain regular communication with your insurer to stay informed about the progress.
• Seek Professional Advice: Consult with insurance brokers or legal advisors who can provide guidance and advocate on your behalf if disputes arise.

By staying informed and proactive, tradespeople can better navigate the current challenges within the Australian insurance industry and ensure they have the necessary coverage to protect their businesses.