The Australian Financial Complaints Authority says its work on systemic issues in general insurance continues to highlight gaps in claims handling and assessment processes.

“The matters identified concerned not only claims delays, but also the quality of claim decisions, the application of policy terms and exclusions, the clarity of information provided to consumers and the effectiveness of controls when liability was disputed,” the authority said.

“Taken together, the matters ... highlight the importance of claims frameworks that support fair and well-reasoned decisions, align customer expectations with the cover provided and ensure relevant dispute information is reflected across the claims process.”

The complaints authority’s work on systemic issues in the third and fourth quarters of last financial year, across all sectors, featured in a report last week.

A case study detailed an investigation of an unnamed motor insurer’s interpretation of policy terms when assessing claims. AFCA says it found the insurer’s approach was “too narrow” in some claims and “could place an unnecessarily high evidentiary burden” on consumers.

“This created a risk that claims could be declined without sufficient consideration of the circumstances surrounding the damage. Claim decisions should reflect the available evidence and circumstances of the claim.

“Other matters raised questions about whether conflicting evidence had been appropriately considered or whether all relevant circumstances had been assessed before a claim was declined.”

The authority is also concerned that information provided to consumers when an insurance product or related service is offered should align with how the product or service operates.

“Consumers should be able to understand how the cover or service will operate.

“Matters reviewed included concerns about significant exclusions or eligibility requirements, communications following changes to insurance cover and insurance-related services where consumers did not always clearly understand the role of the provider, the service they were purchasing or the fees that could apply.

“These matters show that effective disclosure is not simply about providing required documents.”