Insurance Claims Process — Australia
Insurance Claims Process Australia
Australian insurance claims for disaster recovery are governed by the Insurance Contracts Act 1984[10] and the General Insurance Code of Practice. Insurers must acknowledge claims within 10 business days and make a decision within 4 months. The Australian Financial Complaints Authority (AFCA) provides free dispute resolution. Policyholders have a duty to mitigate further damage and must not dispose of damaged property before insurer inspection.
Technical Standards & Science
Understanding the insurance claims process is critical for disaster recovery outcomes. The process follows a structured timeline with legal obligations on both parties.
The Claims Timeline
- Immediate (0–24 hours) — Mitigate further damage (e.g., turn off water, tarp roof). Contact insurer to lodge claim. Begin photographic documentation of all damage.
- Assessment (1–10 days) — Insurer acknowledges claim. Loss assessor or insurance assessor inspects property. Scope of loss is documented.
- Decision (10 days – 4 months) — Insurer determines coverage, appoints restoration contractor or approves policyholder-nominated contractor. Cash settlement or managed repair offered.
- Restoration (variable) — Approved works proceed. Progress inspections by insurer-appointed assessors. Completion sign-off and policy excess payment.
Key Insurance Terminology
- Sum insured — The maximum amount your insurer will pay for a claim.
- Excess — The amount you pay towards each claim (typically $500–$1,000).
- PDS (Product Disclosure Statement) — The legal document outlining what is and is not covered.
- Duty to mitigate — Your legal obligation to prevent further damage after an event.
- Cash settlement — Payment of estimated repair costs directly to you, rather than managed repair.
- Scope of loss — The documented extent of damage used to calculate claim value.
Legal & Insurance Framework
Insurance Contracts Act 1984 (Cth)
This federal legislation sets the framework for all insurance contracts in Australia. Key provisions include the duty of utmost good faith (both parties), insurer obligations to handle claims efficiently and fairly, and policyholder rights to dispute decisions.
General Insurance Code of Practice 2020
The industry code requires insurers to: acknowledge claims within 10 business days, keep you informed of claim progress, make a decision within 4 months (or explain delays), and provide written reasons for any denial.
Common Exclusions
Standard Australian insurance policies typically exclude: gradual damage from maintenance neglect, pre-existing damage, wear and tear, intentional damage by the policyholder, damage during renovations without insurer notification, and specific flood exclusions in some policies.
Why Choose a Vetted Contractor?
Insurance Claims Management: Vetted vs Unvetted Contractors
- Direct insurer billing — no upfront costs for approved claims
- Detailed scope of loss documentation with photographic evidence
- Understands insurer requirements to prevent claim disputes
- Experience with all major Australian insurers and their processes
- Advocates for full restoration scope, not minimum repair
- Provides insurer-compliant reports and progress documentation
- Cash payment required upfront — you chase reimbursement yourself
- Minimal documentation that may not meet insurer evidence standards
- Unfamiliar with insurance processes — delays and disputes common
- No relationship with insurers — your claim may be deprioritised
- May underquote to win work then dispute scope with your insurer
- No standardised reporting — claim may be rejected for inadequate evidence
Frequently Asked Questions
How long do insurance claims take in Australia?
Under the General Insurance Code of Practice, insurers must acknowledge your claim within 10 business days and make a decision within 4 months. Straightforward claims (e.g., small water damage) may be resolved in 2–4 weeks. Complex claims involving structural damage, disputes, or multiple parties can take 6–12 months.
What should I do immediately after property damage?
Ensure safety first. Then: mitigate further damage (turn off water, tarp roof), take timestamped photos and video of all damage, contact your insurer to lodge a claim, keep receipts for emergency expenses, and do not dispose of damaged items until your insurer has inspected or authorised disposal.
Can I choose my own restoration contractor?
Yes, in most cases. Your insurer may recommend their panel contractors (which can speed up the process), but you generally have the right to nominate your own contractor. The insurer may require quotes from your contractor for approval before work begins.
What if my insurance claim is denied?
Request written reasons for the denial. Review your PDS to check coverage terms. You can request an internal review by the insurer, then lodge a complaint with AFCA if unsatisfied. AFCA provides free dispute resolution and can overturn insurer decisions.
Does insurance cover temporary accommodation?
Most Australian home insurance policies include temporary accommodation cover if your home is uninhabitable due to an insured event. This typically covers reasonable accommodation costs for the duration of repairs. Check your PDS for specific limits and conditions.
What is the duty to mitigate?
The duty to mitigate is your legal obligation to take reasonable steps to prevent further damage after an insured event. Examples include turning off water mains during a leak, covering a damaged roof with a tarp, or removing valuables from flooded areas. Failure to mitigate can reduce your claim payout.
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Insurance Contracts Act 1984, AFCA dispute resolution, and claims timeline
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