What happens when an insurance claim is disputed? Learn the full process, why it happens, and the steps you can take to protect your payout.

Natural disasters have led to more than $34 billion in insured losses in Australia since 2010, according to the Insurance Council of Australia.

When an insurance claim is disputed, it means the insurer disagrees with part of your claim, particularly how it happened, what’s covered, or how much should be paid.

This slows the process, adds steps, and can push the case toward a formal review or legal action.

If your claim comes from a road crash, motor vehicle accident lawyers QLD can explain your rights and the next steps.

Knowing how disputed claims work helps you protect your money and your options.

Different Groups of Disputes

A dispute happens when something about your claim doesn’t match the insurer’s assessment.

This can be small or major, but either way, it creates a problem that must be solved before any payout can happen.

Most disputes fall into a few common groups:

1. Coverage issues

You may believe your policy covers the loss, but the insurer may point to a clause that limits or excludes it. This often happens with water damage, storm damage, and motor vehicle claims.

2. Cause or fault disagreements

The insurer may think the event happened differently than you explained in your report. In motor claims, this is very common, especially when both drivers give different versions.

3. Valuation differences

You might claim a certain repair cost or replacement value, while the insurer may say the damage is minor or worth less.

4. Missing or unclear documents

If your evidence is thin, late, or inconsistent, the insurer may delay the claim or flag it for review.

These disagreements are widespread. AFCA reported more than 27,924 general insurance complaints, with a large portion linked to delays and disagreements over claim decisions.

A disputed claim does not automatically mean the insurer is accusing you of wrongdoing.

It often means they need more information or they’ve interpreted the policy in a way you can challenge.

The Full Process When A Claim Is Disputed

Once a dispute begins, the claim goes through a series of steps that are set out by insurer rules and industry guidelines.

Understanding this helps you stay organised and calm.

Step 1: Lodgement

You send your report, details of the event, and all required documents. Some insurers may ask for photos, receipts, quotes, or police reports.

Step 2: Assessment

The insurer checks:

• your policy wording
• dates and times
• cause of the event
• damage type
• how the evidence compares to your policy cover

If anything is unclear, they may pause the claim and ask for more information.

Step 3: Initial decision

This is where the insurer either:

• approves your claim,
• partially approves it, or
• rejects it.

A partial approval often means they agree with some parts but not others (for example, approving repairs but refusing extra costs).

Step 4: Internal review

If you disagree with the decision, you have the right to request a second look from a different decision-maker inside the insurer.

Many claims are fixed here because a fresh review can uncover errors or missing details.

Step 5: External dispute resolution

If the insurer still won’t change its view, you can take the case to the Australian Financial Complaints Authority (AFCA).

AFCA looks at both sides and decides what’s fair.

Australian Securities & Investments Commission (ASIC) also tracks the number of life insurance disputes through its comparison tool, which shows disputes per 100,000 lives insured.

Knowing these steps helps you predict what will happen next and gather what you need before problems grow.

What To Do When Your Insurance Claim Is Disputed

A dispute can feel stressful, but you can take steady steps to keep control and protect your payout.

1. Read your policy again

Focus on:

• coverage sections
• exclusion sections
• definitions
• limits
• time-based rules

This helps you see exactly what the insurer may be relying on.

2. Gather and organise evidence

Use clear documents such as:

• photos
• repair quotes
• police reports
• medical reports
• receipts
• witness statements
• emails

Good evidence strengthens your position and reduces back-and-forth delays.

3. Respond quickly to all requests

Insurers often set strict timelines. Quick replies make your claim look strong and reduce reasons for delay.

4. Keep a clean paper trail

Write down dates of calls and save copies of emails. If the case escalates, these records help show you acted responsibly.

5. Request internal review          

If you believe the decision is wrong, you have the right to request a review by another team or manager within the insurer.

6. Go to AFCA or seek legal help

If the insurer still rejects your claim, you can take the matter to AFCA at no cost.

For motor vehicle accidents, legal help can be important because the outcome may affect both insurance payouts and injury compensation.

These steps give you a better chance of reaching a fair outcome and keeping things organised from start to finish.

How Disputed Motor Vehicle Accident Claims Work

Motor accident claims are different from many other types of insurance disputes because they involve questions about fault, injury, and multiple policies.

Fault and liability matter

If the insurer believes you caused the crash — or partly caused it — the claim may be reduced or denied. That’s why the details in your report must be clear and factual.

Your policy type affects the process

• Comprehensive insurance covers your car and the other party.
• Third-party property only covers damage you cause to someone else’s car or property.
• Compulsory Third Party (CTP) covers injury, not property damage.

Because several policies can apply at once, disputes can become slow and technical.

Damage and injury claims often overlap

If you were hurt in the crash, you may have:

• a vehicle damage claim with your insurer
• a personal injury claim through CTP
• a possible liability claim if another party blames you

This mix can create confusion, delays, and disagreements over evidence.

When lawyers help

Motor vehicle accident lawyerscan guide you through:

• fault disputes
• injury claims
• deadlines
• insurer requests
• fair payout amounts

Their support is often helpful when the claim affects both your health and your finances.

Industry rules for fairness

Motor claims must comply with the General Insurance Code of Practice, which sets rules on fairness, communication, and decision-making times.

If insurers fall short, you can escalate the issue.

Conclusion

What happens when an insurance claim is disputed? A disputed insurance claim doesn’t mean the end of your payout.

It means the insurer needs more proof, more review, or more clarity before deciding.

When you know the common reasons for disputes and how the process works, you can stay one step ahead.

Strong evidence, clear communication, and knowing your rights give you a better chance of a fair outcome.

And if your claim comes from a road crash, having legal support can help you protect what you’re entitled to.