What Happens After You Send a Dispute Letter to Your Insurer

After you send a dispute letter to your insurer, they must acknowledge it within one business day and provide a final response within 30 calendar days under ASIC's IDR requirements. During that period, your insurer will review your complaint, may request additional information, and must assign a dedicated complaints handler. If they don't respond within 30 days or you disagree with their decision, you can escalate directly to AFCA.

Key takeaways

• Your insurer must acknowledge your dispute within one business day and respond within 30 calendar days.
• A dedicated complaints handler will be assigned to review your case, usually someone different from the original decision maker.
• The insurer may request additional information during the review. Respond promptly to avoid delays.
• If they do not respond within 30 days or you disagree with the outcome, escalate directly to AFCA.

You've written your dispute letter, gathered your evidence, and sent everything to your insurer. That's a significant step. But the waiting game that follows can be just as stressful as the denial itself. Understanding what happens next puts you in a stronger position to push back if your insurer tries to stall, lowball, or simply ignore you.

Your insurer must respond within specific timeframes

Your insurer has specific obligations once they receive your dispute. Under ASIC Regulatory Guide 271 they must acknowledge your complaint within one business day, or as soon as practicable. Under paragraph 147 of the General Insurance Code of Practice they must then make a decision within 30 calendar days, and if they cannot meet that deadline they must tell you before it passes why there is a delay and that you can take the complaint to AFCA. Paragraph 146 also requires them to keep you informed of progress at least every 10 business days unless the complaint is resolved sooner. These are not suggestions. They are binding commitments, and your insurer's membership of the Insurance Council of Australia depends on following them.

If your insurer is a member of the Insurance Council (and virtually all major Australian insurers are), they have signed up to the Code. If they breach these timeframes without a valid reason, that breach itself becomes grounds for an AFCA complaint.

What your insurer's response will typically look like

Your insurer's Internal Dispute Resolution (IDR) team will review your complaint and send you a written response. This will be one of three outcomes.

First, they may overturn the original decision and pay your claim. This happens more often than people expect, particularly when you provide strong supporting evidence like independent reports or expert assessments. Second, they may make a revised offer, agreeing to pay part of your claim or offering a settlement amount. Third, they may uphold the original denial, maintaining their position that the claim is not covered.

Whichever outcome you receive, the response must be in writing and must explain the reasons for the decision, the evidence they relied on, and your right to take the matter to AFCA if you are not satisfied.

Common insurer tactics after receiving a dispute

The partial offer

One of the most common responses is a partial offer. Your insurer might agree to pay some of your claim while still denying other parts. For example, they might cover part of the repair cost but exclude items they attribute to "pre-existing damage" or "maintenance issues". This tactic is designed to make you feel like you've won something, encouraging you to accept without questioning the remainder. Before you accept any partial offer, compare it carefully against the full amount you claimed. If the gap is significant, you have every right to reject the partial offer and escalate to AFCA.

Requesting more information

Some insurers respond to a dispute letter by asking for additional documentation. Sometimes this is legitimate. But other times, it is a delay tactic. If you have already provided the evidence that supports your claim, and your insurer asks for more without explaining why the existing evidence is insufficient, push back. Ask them to specify exactly what they need and why the documents you have already provided do not address their concerns. If they cannot give a clear answer, note the delay and include it in any future AFCA complaint.

The legalistic denial

Some insurers respond with a letter heavy on legal language and policy references, quoting specific clauses and definitions designed to be difficult for a non-lawyer to challenge. Do not be intimidated by this. The policy wording matters, but so does the insurer's obligation to act fairly and in good faith under Section 13 of the Insurance Contracts Act. If their interpretation of the policy seems unreasonably narrow or designed to avoid paying a legitimate claim, that is exactly the kind of issue AFCA will look at.

What to do if your insurer upholds the denial

If your insurer reviews your dispute and maintains their original decision, that is not the end. It is actually the beginning of the next phase. Once you have received a final IDR response (or if 30 days have passed without one), you can lodge a complaint with the Australian Financial Complaints Authority (AFCA). AFCA is a free, independent dispute resolution service, and insurers are legally required to comply with AFCA's decisions.

You do not need a lawyer to go to AFCA. You need a clear complaint, supporting evidence, and a well-structured submission that explains why you believe the insurer's decision was wrong. Our guide to lodging an AFCA complaint walks you through the process step by step.

What to do if your insurer makes a partial offer

A partial offer is not an all-or-nothing situation. You can accept the part of the offer you agree with while disputing the remainder through AFCA. This is worth knowing because many people assume that accepting any part of a settlement means giving up the right to challenge the rest. That is not the case. When you respond to a partial offer, make it clear in writing that you are accepting the agreed amount as a partial payment, not a full and final settlement, and that you intend to pursue the remaining amount through AFCA.

Keep records of everything

From the moment you send your dispute letter, keep a log of every interaction with your insurer. Note the date, time, who you spoke to, and what was discussed. Save every email, letter, and SMS. If you call them, follow up with an email confirming what was discussed. This record becomes critical if you need to escalate to AFCA, because it demonstrates the insurer's conduct throughout the process. Delays, contradictions, and unfulfilled promises all strengthen your case.

Do not let delay become a silent denial

Some insurers respond to dispute letters by simply going quiet. They acknowledge receipt but never provide a final response. This is not acceptable. If 30 days have passed since you lodged your dispute and you have not received a final response, you have the right to escalate directly to AFCA. In fact, an insurer's failure to respond within the required timeframe can work in your favour at AFCA, as it suggests the insurer did not take your complaint seriously.

The dispute process is designed to give your insurer a chance to correct their decision before an external body gets involved. If they waste that opportunity by delaying or stonewalling, they lose the benefit of the doubt.