Communication gaps drive insurance complaints into legal disputes

Claims HandlingCustomer ExperienceNon-Technical SkillsSoft Skills

In summary Delays in claims handling remain the leading cause of insurance complaints across Australia and the region, with claim denials and disputes over claim amounts also driving dissatisfaction. Around 45% of general insurance complaints are resolved at AFCA's referral...

09 Jun 2026

5 mins read

Communication gaps drive insurance complaints into legal disputes

Summary

Insurance complaints rarely escalate because of a single decision. More often, they grow from delays, uncertainty and poor communication, testing trust long before a matter reaches AFCA or the courts.

In summary

Delays in claims handling remain the leading cause of insurance complaints across Australia and the region, with claim denials and disputes over claim amounts also driving dissatisfaction.
Around 45% of general insurance complaints are resolved at AFCA’s referral stage, suggesting many disputes can be settled before formal investigation or legal action becomes necessary.
Poor communication and misaligned expectations are often the tipping points that turn routine complaints into external disputes, regulatory scrutiny or litigation.
Clear policy wording, proactive engagement and timely updates can significantly reduce the likelihood of complaints escalating, particularly in complex or high-value claims.
Emerging disputes are expected to increasingly involve climate risks, cyber incidents, AI-related liabilities and data breaches, although the underlying drivers of escalation are likely to remain communication, delay and uncertainty.

Insurance complaints rarely begin as legal battles. More often, they start with a customer waiting for an answer, a repair, a clearer explanation or a payment that does not arrive when expected.

Across Australia, New Zealand and parts of Asia, the pattern is strikingly consistent: delays, disputed claim decisions, claim amounts, unclear wording and unmet expectations remain the pressure points most likely to turn dissatisfaction into formal complaint, external dispute resolution or litigation.

In Australia, the Australian Financial Complaints Authority (AFCA) says delays in claims handling remain the most complained-about general insurance issue.

An AFCA spokesperson says that, in 2024–25, most general insurance complaints related to comprehensive motor vehicle insurance, while the leading issue was delay.

“Typically, for general insurance the three most common issues we see are delays in claims handling, claim denials or claim amounts,” the spokesperson says. “The most common products are motor vehicle and home insurance.”