Surge in Insurance Complaints Highlights Processing Delays

Home-building insurance complaints have escalated to their highest levels since 2022-23, averaging 24 daily in the first quarter of 2026. Similarly, motor vehicle insurance complaints have risen to 44 per day, up from 31 in the previous financial year. These figures underscore a growing dissatisfaction among policyholders regarding the timeliness and efficiency of claim resolutions.

Emma Curtis, AFCA's lead ombudsman for insurance, points to a combination of factors contributing to these delays. A notable shortage of materials and skilled labour, particularly in the construction and automotive sectors, has been exacerbated by rising fuel and freight costs. Additionally, the increasing prevalence of electric vehicles introduces complexities in sourcing specific parts and qualified mechanics, further prolonging repair timelines.

Beyond logistical challenges, AFCA's data suggests that insurers may be under-resourcing their claims-handling teams, leading to bottlenecks in processing. Internal complaints to general insurers have risen from 1.6 million in 2023-24 to nearly 2.1 million in 2024-25. Alarmingly, nearly 40% of complaints escalated to AFCA had not been logged internally by the insurers, indicating potential gaps in internal complaint recognition and management.

The Insurance Council of Australia (ICA) acknowledges these challenges, noting that insurers processed an average of 86,000 motor and household insurance claims daily in 2025. While the majority of internal complaints were resolved swiftly, the ICA warns that ongoing global events, such as geopolitical tensions affecting fuel prices, are likely to further disrupt supply chains and delay repairs.

For Australian tradies, these delays can have profound implications. Timely insurance payouts are crucial for maintaining business operations, especially when dealing with damaged tools, vehicles, or workspaces. Extended waiting periods can lead to significant income loss and project delays, affecting both the tradies and their clients.

To mitigate these challenges, tradies are advised to:

• Maintain comprehensive records of all tools, equipment, and assets to streamline the claims process.
• Regularly review and update insurance policies to ensure adequate coverage.
• Engage proactively with insurers to understand claim procedures and expected timelines.
• Consider diversifying suppliers and service providers to reduce dependency on single sources, thereby minimising potential delays.

As the insurance industry grapples with these systemic issues, it is imperative for insurers to invest in robust claims management systems and adequately resource their teams. For tradies, staying informed and prepared can help navigate the complexities of the current insurance landscape, ensuring minimal disruption to their livelihoods.