Motor cover claim rows make up a large proportion of all general insurance disputes and are an area of focus for the Australian Financial Complaints Authority, CEO and chief ombudsman David Locke says.

There were 34,231 general insurance complaints in the year to June 30, up 17% on 2023-24.

Excluding 7880 complaints related to add-on consumer credit insurance, one-third of more than 26,000 general insurance cases related to comprehensive motor insurance.

“There are clearly challenges in that area in particular,” Mr Locke told an AFCA member forum today.

“Some of that is beyond the control of the insurers, because it relates to delays in getting parts to Australia and getting repairs done.  

“But it’s really causing a lot of complaints and a lot of stress for individuals, and so that’s an area of focus.”

The number of complaints about service increased, and Mr Locke recommends expanding internal dispute resolution teams to lower costs by avoiding complaints going to AFCA.

“Really, at the heart of this is communication. It’s a very expensive way to deal with what are relatively simple matters that could be handled better in-house.

“We do not want to be handling complaints about service and delay. I would much rather there be more staff taken on in IDR in major financial institutions than continue to grow AFCA. I don’t see that as a success at all.”

Mr Locke says AFCA’s purpose is helping settle disputes over policy terms and claim denials, and cases “shouldn’t be around the service. They shouldn’t be around the fact that people can’t get to speak to [someone] or can’t get called back.  

“If consumers are frustrated about delays and a lack of communication, then they are not just going to go away – people are going to come through to the scheme ... to deal with that.

“There is quite a lot that really shouldn’t be coming through to AFCA and we have a vested interest, all of us do, in really trying to address that.”