Insurance Complaints Surge to Record Levels in Australia
Insurance companies in Australia are generating an unprecedented 100 complaints per day, as they increasingly reject or struggle to manage everyday claims, according to exclusive data from the Australian Financial Complaints Authority (Afca). This alarming trend highlights a growing crisis in the insurance industry, with delays and denials leaving many customers in financial and emotional distress.
Personal Stories of Struggle and Delay
Rick Maloney's experience epitomizes the challenges faced by policyholders. After his home in Mooroopna, Victoria, flooded in 2022, he endured a two-year battle with his insurer before receiving a payout. During this time, his property deteriorated significantly, with mushrooms sprouting between floorboards and walls cracking due to neglect. Maloney's case is not isolated; he joined thousands of Australians who have turned to Afca after insurers refused to honor claims, a number that has surged in recent years.
Data Reveals Widespread Issues Across Insurance Sectors
Afca's data shows that home-building insurance complaints have reached their highest level since 2022-23, averaging 24 per day in the first quarter of 2026. Motor vehicle insurance complaints have also risen sharply, from 31 to 44 per day over the past financial year. Emma Curtis, Afca's lead ombudsman for insurance, notes that delays in processing claims account for nearly a quarter of all complaints, driven by shortages of materials, builders, spare parts, and mechanics. The rise of electric vehicles is expected to exacerbate these delays as sales hit record highs.
Underlying Causes and Industry Response
The surge in complaints is primarily attributed to insurers' delays in handling everyday claims, rather than natural disasters. Factors such as rising fuel and freight costs, under-resourced claims-handling teams, and global geopolitical tensions, including the US-Israel war on Iran, are worsening the situation. Internal complaints to general insurers have increased from 1.6 million in 2023-24 to nearly 2.1 million in 2024-25, according to the Australian Securities and Investments Commission. However, nearly 40% of complaints that reached Afca in 2024-25 were not logged internally by insurers, indicating a lack of trust or proper identification of issues.
Impact on Vulnerable Customers and Calls for Reform
Afca predicts that growing delays will disproportionately affect vulnerable customers, with complaints from this group rising to 14 per day in 2025. Cases include individuals left 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, argues that the industry has not fully implemented reforms recommended by a 2024 parliamentary inquiry into the 2022 east coast floods. Despite vocal commitments from insurers, progress has been slow, leaving many to fight for years to settle claims.
Industry Perspective and Future Outlook
The Insurance Council of Australia (ICA) reports that insurers processed an average of 86,000 motor and household claims daily in 2025, with 1.7 million of 2 million internal complaints closed within a day. However, the ICA acknowledges that delays are set to worsen due to supply chain disruptions and rising costs. A spokesperson for Suncorp, which owns brands like Aami and GIO, emphasized the company's commitment to resolving concerns early and investing in customer support. As extreme weather events cost Australia $4.5 billion annually, triple the amount from the 1990s, the need for efficient and fair insurance practices has never been more critical.
