Settling claims with a car insurance ombudsman

If you have made a claim with your car insurer, whether it’s because you’re concerned they have charged your premiums incorrectly, misled you in some way, or made an unfair decision, you may be wondering what your options are, and who can help.

Fortunately, the Australian Financial Complaints Authority (AFCA) exists to help mediate in circumstances like this. AFCA is an ombudsman service that specialises in dispute resolution, and may be able to assist with your complaint.

What is an ombudsman?

An ombudsman is an independent person, usually appointed by the government, who investigates and remediates disputes. Typically, an ombudsman handles complaints about  businesses, financial institutions, government departments or similar entities. If you have a complaint about your car insurer and you have not been able to successfully resolve it with them, one possible avenue might be contacting AFCA and going through its financial complaints process.

What is the Australian Financial Complaints Authority?

The Australian Financial Complaints Authority (AFCA) handles complaints from individuals and small businesses with fewer than 100 employees. On hearing a complaint, an ombudsman at AFCA will impartially consider both sides of the dispute, make decisions based on the facts and circumstances of each complaint, and work with all the parties involved with the aim of achieving a fair resolution as quickly as possible.

What should you do before contacting the Australian Financial Complaints Authority?

Before contacting the Australian Financial Complaints Authority (AFCA), it is important to try to resolve your dispute with your car insurance provider. It may be advisable to use email, as that way, you will have a written record of your correspondence to show that you have made an effort to resolve the complaint yourself.

If you have not first attempted to resolve your complaint directly with your insurer, then it is unlikely an ombudsman at AFCA will be willing to deal with your dispute. In general, you will have two years from the time you receive a final answer from your insurer to make a complaint to AFCA, and six years from your actual or reasonable awareness of the loss.

How do I complain about my insurance provider?

If you want to complain about your car insurer, and you have attempted to resolve the matter with them and been unable to do so, you can complain about them to the Australian Financial Complaints Authority (AFCA). AFCA accepts complaints online, via email, over the phone and in writing.

What kinds of complaints does the ombudsman handle?

If you are in a dispute with your car insurer, you might make a complaint to AFCA if your insurer has::

• incorrectly calculated or charged your premiums
• provided you with misleading or incorrect information about a product
• made an unfair decision when assessing your claim, either by denying it or incorrectly assessing the value of a loss or the cost of repairs
• not taken adequate steps to facilitate the repair of your vehicle, or not attempted to negotiate a fair and workable solution
• incorrectly decided that you were liable in the case of a car accident or insurance excess
• delayed the resolution of a claim
• breached your privacy or confidentiality

What can the car insurance ombudsman do?

If the Australian Financial Complaints Authority (AFCA) upholds all or part of your complaint, they can compel the insurer to:

• pay your claim, or pay you some other sum of money
• vary or cancel outstanding debts
• vary, waive or repay fees
• vary, reinstate or cancel a contract

What can the car insurance ombudsman not do?

There are a number of things the Australian Financial Complaints Authority (AFCA) can not do. The ombudsman cannot provide financial or legal advice. If you require assistance,an ombudsman  may be able to refer you to a relevant legal or financial counselling service.

AFCA cannot assist with Compulsory Third Party (CTP) insurance disputes – these must be dealt with by relevant authorities in your state or territory. It also cannot assist with matters that are currently the subject of legal proceedings.

Likewise, AFCA cannot deal with a complaint that has already been dealt with by a court, tribunal, arbitrator or another ombudsman.

If you are unhappy about the cost of your insurance premiums, AFCA will not be able to help.

How do I file a case against my car insurance company?

To file a complaint with the Australian Financial Complaints Authority (AFCA) you can start the online complaint form on its website, or call AFCA on 1800 931 678 (free call) for more information or support.

After receiving a complaint from you, AFCA will consider the facts and if the complaint is within their scope, they will then contact your car insurer. From there, an ombudsman  may try to resolve the complaint through informal processes such as negotiation between the parties, or conciliation, in the form of a phone call where both sides state their case.

If these informal methods do not work, an ombudsman will make a decision known as a ‘determination’, based on the facts of the case. Sometimes, they will provide the parties with a preliminary assessment of the facts, and ask if they are willing to make a settlement based on this. They may, however, proceed straight to making a binding decision.

An ombudsman will make their decision based on legal principles, applicable industry codes, good industry practice, and precedent, in the form of previous AFCA decisions.

Are the ombudsman’s decisions binding?

Yes, decisions made by an ombudsman at AFCA are binding. If you are happy with the decision and decide to accept it, then your car insurer is required to provide any remedy that has been ordered within the time frame laid out. If your car insurer does not comply with the decision within the stated time frame, then they will be reported to the Australian Securities and Investment Commission (ASIC).

Who is the governing body for car insurance?

The Insurance Council of Australia is the representative body for the general insurance industry in Australia, with its members including insurers and reinsurers that provide insurance products including car insurance, travel insurance and home and contents insurance. While the Insurance Council of Australia is the governing body for insurance, complaints relating to your car insurance provider should still be taken up with the AFCA.

Cover image source: NONGASIMO/Shutterstock.com