Insurance Claim Denied or Underpaid: How to Write a Complaint That Gets It Reviewed

Your insurer denied your claim, delayed it for months, or paid a fraction of what you need to repair your car, replace your contents or cover your medical bills. You called, they said no, and now you’re stuck with the damage bill.

Claim Done’s Insurance Complaint service drafts two documents for $97: a formal complaint to your insurer under its internal dispute resolution process, and an AFCA escalation letter if the insurer refuses or takes too long. The service covers car, home, contents, travel and income protection claims.

Why insurers deny or underpay claims

Insurers deny claims, delay payment or offer low settlements for reasons that range from legitimate policy exclusions to disagreements about the facts or the value of a loss. Common reasons include:

• Policy exclusions: the insurer says the event or loss is not covered under your policy wording
• Insufficient evidence: the insurer says you did not provide enough photos, quotes, receipts or proof of ownership
• Pre-existing damage: the insurer says the damage was there before the insured event
• Breach of duty: the insurer says you did not maintain the property, secure it properly or notify the insurer in time
• Undervaluation: the insurer’s assessor valued your loss at less than you believe the replacement cost to be
• Delay: the insurer keeps asking for more information or takes a long time to assess

Some denials are correct. Others may be open to challenge. A formal complaint asks the insurer to review the decision and explain its position in writing.

What a formal complaint to your insurer should contain

A complaint to your insurer is not an angry email. It is a structured letter that:

• Identifies your policy number, claim number and the date you lodged the claim
• Describes the insured event: what happened, when and where
• Sets out what you claimed and what the insurer decided
• Explains why you say the denial, delay or offer is wrong, referring to your policy wording and the facts
• Attaches or lists the evidence you have: photos, quotes, receipts, expert reports, correspondence
• States what you want: claim approval, full payment, or a specific amount with reasons
• Asks the insurer to deal with the matter under its internal dispute resolution process

The complaint goes to the insurer’s complaints team, not the claims assessor who made the original decision. Insurers are subject to rules about how they acknowledge, handle and respond to complaints, including timeframes that can differ depending on the type of complaint and insurer. Your insurer’s complaints information, and AFCA’s website, will set out the current requirements that apply to your situation.

The legal framework: your policy and the Insurance Contracts Act

Your rights come from two main sources:

Your policy wording: the contract between you and the insurer. It defines what is covered, what is excluded, your obligations and the insurer’s obligations. If an insurer denies a claim relying on an exclusion, the question is whether the exclusion is clearly worded and applies to your circumstances.

The Insurance Contracts Act 1984 (Cth): federal legislation that applies to many insurance contracts. Among other things, the Act limits an insurer’s ability to refuse a claim for some kinds of breach, deals with how unusual terms must be brought to a policyholder’s attention, and imposes a duty of utmost good faith on both parties. Unreasonable delay, failure to investigate properly, or denying a claim without proper justification may raise questions about whether that duty has been met. Whether it applies, and how, depends on your policy and the facts.

What to gather before you complain

Before you write a formal complaint, it helps to gather your evidence:

• Your policy schedule and the full policy wording (the Product Disclosure Statement)
• Photos of the damage or loss, taken as soon as possible after the event
• Quotes or invoices for repairs or replacement
• Receipts, bank statements or other proof you owned the items you are claiming
• Any expert reports: a builder’s report, a repairer’s assessment, a medical certificate
• All correspondence with the insurer: emails, letters, claim forms, the denial letter

Read the denial letter carefully. Insurers are generally expected to give reasons for their decisions. If the letter says your claim is excluded, find that exclusion in your policy wording and check whether it genuinely applies. If the letter says you did not provide enough information, check what you sent and what the insurer asked for.

If the denial relies on something you said or did not say when you applied for the policy, check what the insurer asked you at the time and what you answered. The rules about what you must tell an insurer, and what an insurer can rely on, depend on the type of policy and the circumstances, so it can be worth getting independent advice on this point.

How the internal dispute resolution process works

Once the insurer receives your complaint, its internal dispute resolution team reviews the claim. The team is separate from the original claims assessor. It may look at:

• The policy wording and whether the exclusion or condition the insurer relied on applies
• The evidence you provided and whether the original assessor asked for everything needed
• Whether the insurer’s valuation or settlement offer is reasonable
• Whether the insurer complied with its obligations under the Insurance Contracts Act and the duty of utmost good faith

The insurer is expected to give you a final response within the timeframe that applies to your type of complaint. The response should accept or reject your complaint, give reasons for the decision, and tell you about your right to take the matter to AFCA if you are not satisfied.

If the insurer accepts your complaint, it may approve your claim, increase its offer or reopen the assessment. If it rejects your complaint, you can consider escalating to AFCA.

Escalating to AFCA if the insurer says no

The Australian Financial Complaints Authority (AFCA) is the external dispute resolution scheme for insurance complaints. AFCA is free for consumers. AFCA has limits on the compensation it can award, and these differ depending on the type of complaint and are updated from time to time, so check AFCA’s website for the compensation caps that currently apply.

People commonly consider escalating to AFCA if:

• The insurer rejected their complaint
• The insurer did not respond within the timeframe that applies to the complaint
• The insurer’s final response does not resolve the matter

AFCA reviews the policy, the evidence, the insurer’s decision and the law, then reaches an outcome. Where AFCA makes a determination and you accept it, it is binding on the insurer.

Your AFCA escalation letter should:

• Summarise the insured event and your claim
• Attach your original complaint to the insurer and the insurer’s response
• Explain why you say the insurer’s decision is wrong
• State what you want AFCA to decide
• Attach all evidence: policy, photos, quotes, correspondence

AFCA generally expects you to complain to the insurer first, so that the insurer has a chance to resolve the matter through its own internal process.

Free vs paid: can you write the complaint yourself?

You can write your own complaint. The insurer is expected to consider it however it is worded. A free complaint can work if you are confident identifying the relevant policy terms and exclusions, can explain clearly why you say the denial is wrong, have organised all your evidence and are comfortable writing a formal letter that stays calm and factual.

A paid complaint through Claim Done may suit you if you are not sure which policy terms or legal principles apply, the insurer’s denial letter is vague or legalistic, you want a structured complaint that quotes the policy wording and sets out your evidence clearly, or you want the AFCA escalation letter drafted at the same time, ready to send if the insurer refuses.

Claim Done’s service costs $97 for both documents. You answer plain questions about your policy, the event, what you claimed, what the insurer decided and the evidence you have. Claim Done drafts the complaint and the AFCA letter from your answers. You read both documents, approve them or ask for changes, then we email them for you or you download them to send yourself. Claim Done is not a law firm and this page is general information, not legal advice.

How Claim Done helps

Claim Done’s Insurance Complaint service gives you two documents for $97:

1. A formal complaint to your insurer under its internal dispute resolution process, setting out the event, your claim, the denial or underpayment, why you say it is wrong, and what you want the insurer to do
2. An AFCA escalation letter ready to send if the insurer rejects your complaint or does not respond within the timeframe that applies

The service covers car, home, contents, travel and income protection claims. It does not cover life insurance, total and permanent disability, or income protection claims that involve a declined benefit, because those claims can involve more complex medical and policy issues.

You answer questions in plain English. The system asks about your policy, the insured event, what you claimed, what the insurer decided, the evidence you have and what you want. You upload your policy schedule, the denial letter and key evidence. Claim Done drafts both documents from your answers. You review them, approve them or request changes, then we email them for you.

The complaint goes to your insurer’s complaints team. The AFCA letter stays with you until you need it. If the insurer rejects your complaint or ignores it, you can send the AFCA letter and lodge your complaint on AFCA’s online portal.

What happens after you send the complaint

The insurer is expected to acknowledge your complaint and respond within the timeframes that apply to it. During that time, the dispute resolution team may ask for more information or evidence, arrange an independent assessment or inspection, contact you to discuss a settlement, approve your claim in full, increase its offer, or reject your complaint with reasons.

If the insurer approves your claim or makes an offer you accept, the matter is resolved. If it rejects your complaint, you can consider escalating to AFCA.

The AFCA process takes time, and how long depends on the complexity of the dispute and the information needed. AFCA may ask both you and the insurer for more information, arrange a case manager to help negotiate a settlement, or make a formal determination.

Start your insurance complaint now

If your insurer denied your claim, delayed it or paid far less than you need, a formal complaint can ask for a proper review. Start your insurance complaint now and get both documents drafted for $97.

Frequently Asked Questions

How long does the insurer have to respond to my complaint?

Insurers are subject to rules about acknowledging and responding to complaints, and the timeframes differ depending on the type of complaint. Your insurer should tell you when it receives your complaint what timeframe applies, and AFCA’s website sets out the current requirements.

Can I go straight to AFCA without complaining to the insurer first?

Generally not. AFCA expects you to give the insurer a chance to resolve the complaint through its internal dispute resolution process first. People commonly consider AFCA after the insurer rejects the complaint or does not respond within the required timeframe. AFCA’s website explains the current requirements.

What if the insurer asks for more information after I send the complaint?

It helps to provide it promptly. An insurer is entitled to ask for evidence it reasonably needs to assess your claim. If you think a request is unreasonable or you have already provided the information, you can say so in your reply and refer to what you sent earlier.

Does AFCA cost anything?

AFCA is free for consumers. You do not pay to lodge a complaint or have AFCA review your case.

What types of insurance claims does Claim Done's service cover?

The service covers car, home, contents, travel and income protection claims. It is built for property and travel claims where the insurer denied, delayed or underpaid. It does not cover life insurance, total and permanent disability or income protection benefit claims involving complex medical assessments.