How to appeal a rejected insurance claim

How to appeal a rejected insurance claim

When you thought you were covered for a loss, having your insurance claim rejected can be devastating.

But even after receiving this bad news, you do still have options.

It is possible to appeal the decision. In situations like these, having a good broker by your side can be incredibly valuable.

The reasoning for the rejection will influence how you appeal. 

In some cases the claim is rejected based on the wording, which generally means it falls outside of the operative clause or because an exclusion applies. 

The alternative is that it’s a factual issue. An example would be if the owner claims their home was damaged by a storm, but the insurer argues this was from gradual deterioration.

1. Broker advocacy

A broker can advocate for a person who has had their claim rejected.

If you’re in this position, it’s advised that you get the broker’s opinion on what to do moving forward. They can assess the situation and determine whether there are any grounds to challenge the rejection.

When there has been a factual issue, the broker can assist with finding factual evidence, reports and documentation to support your claim. The broker won’t personally go out and look at these things, but they will use information such building reports.

For exclusion-related rejections, a broker can leverage their technical expertise to determine whether the wording could be argued.

2. Internal dispute resolution

If your first attempt falls short, there is still the option to pursue things further. At this point, your broker can request to launch a formal internal dispute resolution process with the insurer.

The insurer is then legally required to review the decision within 30 days. After taking another look at the claim, some insurers decide to overturn the original verdict.

If internal dispute resolution is unsuccessful, the insurer must provide reasons explaining why this has been the case. 

During this process, your broker can still advocate for you and your claim.

3. External dispute resolution

If the internal dispute resolution process doesn’t lead to the outcome you were hoping for, another route you can take is pursuing an external scheme.

The Australian Financial Complaints Authority has been responsible for handling disputes over rejected insurance claims since 1 November 2018.

But it is important to note that AFCA only has jurisdiction over particular insurance products. An array of criteria must also be met, which can be discussed with your broker.

4. Court proceedings

Some situations will not come under the jurisdiction of AFCA, which is when legal proceedings would need to be launched to take your case any further. 

To make a claim, you need cover

Making a claim relies on first having suitable insurance. It’s hard to believe, but in many cases people will attempt to make a claim when they aren’t insured. In other instances they are insured in one area, but try to make a claim where they are not.

We can work with you to make sure you get the appropriate level of protection. To find out more, get in touch with your insurance adviser.


Conditions apply for each policy and the information expected from you for a policy to trigger. Coverage may differ based on specific clauses in individual policies. Please ask your broker to explain the additional benefits and exclusions pertaining to your policy.

The information provided is general advice only and does not take account of your personal circumstances or needs. Please refer to our financial services guide which contains details of our services and how we are remunerated.