AFCA has received more than 2,000 complaints from flood-affected consumers since the devastating floods around Lismore and South-East Queensland, compared to 493 complaints it received after the south-east coast storms of February 2020.
The most significant issue for AFCA in the past 12 months following the 2022 flooding event has been delayed in claim handling.
These account for nearly 40 per cent (37 per cent) of complaints to AFCA.
Other complaints related to denial of claims because of policy exclusions or conditions that accounted for one in three complaints (33 per cent) and disputes over claim amount that represented one in four complaints (26 per cent).
Around 40 per cent of South-East Queensland/NSW flood complaints were resolved at the earliest stage of AFCA’s process, at “registration and referral”, when a complaint is referred back to the firm to resolve. This is below the 51 per cent early resolution rate for all complaints to AFCA in 2021–22.
In the past year, flood-affected policyholders have secured nearly $13 million in compensation and refunds from insurers through the AFCA process.
“We are concerned by the volume of complaints that have been reaching us about delays by insurers,” AFCA’s chief ombudsman and chief executive David Locke said. “We understand that the scale of this event has put pressure on insurers but these sorts of complaints can often be avoided through good, regular communication with customers.
“We would also prefer to see insurers resolving many more complaints within their own dispute resolution process, rather than consumers having to take the extra step of coming to AFCA — prolonging the time they spend in limbo, unable to get on with their lives.”
AFCA was also concerned about a rise in complaints about general insurance overall, beyond the floods, Mr Locke said.
The ombudsman service has experienced a 65 per cent increase in general insurance complaints in the 2022–23 financial year so far. As of 23 February, it had registered 17,163 general insurance complaints, compared with 10,417 at the same point in the 2021–22 year.
In relation to the South-East Queensland/NSW floods, delays in claim handling
AFCA’s lead ombudsman for insurance, Emma Curtis, said AFCA continues to encourage insurers to address complaints as quickly as possible in-house or as early as possible in the AFCA process.
“We acknowledge that the heavy flow of unresolved insurance complaints to AFCA means we have not been able to address complaints as quickly as usual,” Ms Curtis said. “But we have increased our resources and capacity to handle insurance complaints significantly over the past year, and this is having a positive effect. By working closely with insurers to help them resolve simpler complaints early, and take a consumer-centric approach, we are confident complaint volumes will reduce over time. AFCA has also instituted new ways to regularly update consumers on the progress of their complaints.
“We expect insurers to do all they can to assess claims promptly, to regularly inform customers about expected time frames, and to clearly communicate about claims options.”
As of 24 February 2,021 complaints had been registered in connection with the South-East Queensland/NSW floods of 2022. Two-thirds of complaints (1,328) had been closed and about three-quarters of complaints (74 per cent) were closed by agreement or in favour of complainants.
About three-quarters of complaints (74 per cent) were in relation to home building insurance, followed by home contents (9 per cent) and landlord insurance (5 per cent).
