You lost your home or significant parts of it in a fire. The trauma is bad enough. Then the insurer comes back with one of three answers that gut you all over again: “We suspect arson”, “You failed to disclose [X] when you took out the policy”, or “Your policy is void due to material change in occupancy.” You’re left without a home and without the money to rebuild.
Fire claim denials are among the most heavily contested in Australian insurance — and AFCA overturns a real share of them. Here’s the playbook.
The legal framework
The Insurance Contracts Act 1984 (Cth) governs every fire claim. Section 13 imposes utmost good faith. Sections 21–22 govern non-disclosure — and the bar is high: the insurer must prove the non-disclosure was both material AND that they would not have offered cover (or would have offered different terms) had they known. Section 56 limits when fraud can void a policy — they need actual evidence, not suspicion. The General Insurance Code of Practice requires written reasons and access to expert reports.
Common refusal grounds and how to challenge them
- “Suspected arson.” Insurer must prove on the balance of probabilities, not just suspect. Police findings, fire-investigator reports, and accelerant tests are demandable evidence.
- “Non-disclosure of prior fire / claim history.” Section 21A imposes a “specific question” standard for consumer policies. If they didn’t ask, they can’t refuse.
- “Property was vacant / tenanted differently.” Most policies require notice of change. If you weren’t told this clearly, the exclusion can be unenforceable.
- “Cause of fire unknown.” Burden of proof on cover sits with the insured, but insurers cannot deny merely because they can’t pinpoint the cause if the loss is otherwise within the policy.
- “Underinsurance / sum insured too low.” Insurer must still pay up to the sum insured — they can’t refuse outright.
What the document does
The Letter of Demand sets out the policy, the claim reference, the precise basis on which the insurer has refused, the legal reason why their basis is wrong, the sum demanded, and a 21-day deadline. It also formally requests every expert report, fire-investigator finding, and internal memo the insurer relied on — disclosure they’re obliged to provide under the Code.
What Claim Done delivers
Ten-minute wizard. Flat $79. AI-drafted, Australian-law-cited, on letterhead. For complex fire matters where you also need a structured legal response to the insurer’s denial letter, our legal-response service is $79.
What to expect after sending
Fire claim disputes typically take 30–60 days to resolve once a Letter of Demand is sent. If the insurer maintains the denial, lodge an AFCA complaint immediately — AFCA can award up to $1,085,000 per claim and frequently overturns fire denials based on weak evidence. Your demand letter, plus the requested reports, becomes the spine of your AFCA submission.