Car insurance ombudsman

Have a dispute with your car insurance provider? Here’s what you can do about it.

If your car insurance provider hasn’t held up its end of the bargain, then you may have valid grounds for a dispute. Financial service providers, including insurance companies, are required to live up to their obligations in good faith. Naturally, the exact obligations depend on which type of car insurance policy you have.

If you have a car insurance dispute, you can contact the Financial Ombudsman Service (FOS) for a resolution. The FOS is responsible for settling issues between consumers and financial service providers. If you have exhausted all other options, then it might be time to give them a call.

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What can the FOS do?

The Financial Ombudsman Service is an impartial, non-profit organisation that offers dispute resolution to customers having difficulties with a financial service provider. Reputable insurers are FOS members and they pay membership fees to ensure that FOS services remain free for consumers.

When you go to the FOS with a dispute, they will:

  1. Determine whether your car insurer, or financial services provider (FSP), acted fairly and promptly to resolve the claim. Familiarise yourself with what to do in the event of an accident to make sure you’ve taken the appropriate steps from the beginning.
  2. Look at which steps the FSP took to expedite repairs and help ease your burdens.
  3. If a cash settlement was offered, the FOS will determine whether it was a fair offer and enough to cover all the repairs.
  4. Decide whether you and the FSP tried to come to a reasonable solution first and whether any excuses given, such as difficulty finding spare parts for repairs, are legitimate.
  5. Determine whether either party is in the right and what kind of compensation is in order.

If they find that you’re in the right, the FOS can make the insurer take certain action including:

  • Paying your claim
  • Paying you a sum of money
  • Forgiving outstanding debt
  • Varying, reinstating or cancelling a contract
  • Repaying, waiving or varying a fee

What can’t the FOS do?

The Financial Ombudsman Service cannot:

  • Help with CTP insurance disputes. You will need to contact your state authority instead.
  • Decide on matters currently undergoing legal proceedings.
  • Offer assistance if the insurer is not an FOS member. However, you can safely assume that all legitimate insurers are FOS members.

What to do before contacting the FOS

Pay special attention to step 4 above and do not contact the FOS until you have first tried to come to an agreement with your insurer. It’s a good idea to use email when trying to resolve an issue as it automatically keeps written records, which may be important later if the FOS needs to make a decision.

  • If you have not tried to settle the issue with your insurer, then the FOS will not help.
  • After you have received a final answer from the insurer, you have two years to get in touch with the FOS if you want to pursue the issue.

The FOS handles a grey area

Issues are not always cut and dried. Sometimes an insurer might be obligated to do one thing, but also has reason to decide on a different course of action. Consider this example.

Mark crashed into a parked car in a parking lot, causing thousands of dollars of damage. He had recently lost his job and was unable to afford the excess, so the insurer denied his claim, leaving him with few options. After first trying to sort it out with the insurance company, as well as a free financial counsellor, Mark eventually turned to the FOS for a resolution.

  • The insurer was obligated to pay Mark’s claim because the damage was covered by the terms of his insurance policy.
  • The insurer was not obligated to pay Mark’s claim because he had not paid the excess.

The FOS was in favour of neither of the parties, so instead mediated between them to sort out a plan that worked for both. The insurer was ordered to cover the costs, as per the terms of the policy, and Mark was ordered to pay off the excess in affordable monthly instalments.

What happens after I make a complaint to the FOS?

Generally, you should not make a complaint until you have been through the insurer’s internal dispute resolution process. Doing so streamlines the FOS procedures, and shows that you have made an effort to reach an agreement.

In each stage, an agreement may be reached. If not, the dispute keeps progressing through the stages.

  • Registration: The FOS will get in touch with you and the insurer, requesting that both of you respond. If you have tried internal dispute resolution, the insurer has 21 days to respond, if not, they have 45 days. During this period, the insurer may offer settlements, or they might otherwise look for ways to resolve the issue before the FOS steps in.
  • Case management: The dispute will be allocated to a case manager. They will gather information on it and be in touch with both parties. The case manager will try to resolve the issue through negotiation, conciliation or by pointing out the relevant issues that might come into play if the dispute progresses to the decision stage.
  • Decision: Taking into account all relevant factors, situational, legal and otherwise, the caseworker will reach a decision. In complex cases this decision might end up in front of a panel rather than an individual.

You do not have to accept the decision. If you reject it, the insurer is freed from the terms of that decision and is not required to do anything in particular. Your remaining option is then to pursue legal action.

Your insurer does have to accept the decision. As FOS members they are required to accept it. If you need a car insurance ombudsman to settle a dispute, there is a clear option available.


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Andrew Munro

Andrew writes for finder.com, comparing products, writing guides and looking for new ways to help people make smart decisions. He's a fan of insurance, business news and cryptocurrency.

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17 Responses

  1. Default Gravatar
    robertFebruary 12, 2018

    im with real insurance. my car was stopped at a traffic light when it was rearended by a roadtrain. it was accessed as a writeoff. i have finally got my payment now. but my question is when i asked them to transfer my insurance policy over to my new car they said no it was now null and void even though it was insured until dec 2018. i asked for a refund they said no. then they said if i was paying monthly i would still have to pay each month up until dec???? thats on top of my new policy. is this right. i also have home and contents with this company. thanks for any information robert

    • Staff
      JoelFebruary 23, 2018Staff

      Hi Robert,

      Thanks for leaving a question on finder.

      Since you have been through your insurance’ internal dispute resolution process, it’s a good idea to use email when trying to resolve an issue as it automatically keeps written records, which may be important later if the FOS needs to make a decision. If you are convinced that you have a valid case, you can contact the Financial Ombudsman Service (FOS) for a resolution.

      Hope it helps.

      Cheers,
      Joel

  2. Default Gravatar
    BDecember 22, 2017

    my car was in an accident with another vehicle (not my fault) . insurer of the other vehicle ask me to get some quotes for the repairs ,they were $6000-$6500. The insurer said that they would write it off as a repairable write off and give me $7500. Now the insurer stated that the car is now a statutory write off which I do not want as the car is repairable and I can afford another new car

    • Staff
      ArnoldDecember 23, 2017Staff

      Hi Darrell,

      Thanks for your inquiry

      You may have valid grounds for a dispute. It would be helpful if you can learn what factors were the cause of the write off, what their criteria are for writing off vehicles. If you are convinced that you have a valid case, then you can contact the Financial Ombudsman Service (FOS) for a resolution.

      Hope this information helps

      Cheers,
      Arnold

  3. Default Gravatar
    CharliebearNovember 25, 2017

    My car was in an accident and badly damaged everyone thought it was a write off. My insurance company sent me to get an assessment and the mechanic said it was a write off. And would cost at least 7000 to fix. The insurance company don’t want to pay the market price because it is more than the repairs. They sent me to another panel beater / painter who is not one of their recommended repairers he said he will fix it for $7500. The 2010 legislation says that a vehicle is a write off – if it has three of the criteria (WOVs). My car has 3+…. the structure is damaged around the back door including the pillar between doors and the floor, the door is totally pushed in, the wheel is on an angle and the suspension is wrecked. The car will be unsafe if they just stretch the structure as it will be weak. Is’nt it illegal to fix a car that fits the ‘ damage criteria for statutory write offs’? What do I do?

    • Staff
      MariaNovember 26, 2017Staff

      Hi Charliebear,

      Thank you for your inquiry.

      I’m sorry to hear about your accident and your car’s present condition.

      It’s possible that your insurer has classified your car as a repairable write-off “if the cost of salvaging the vehicle and then repairing it for road use exceeds either:
      – The car’s market value before it was damaged, if you have market value car insurance or
      – The sum insured, if you have agreed value cover”

      This page on Written-off Cars might help you with information on what you can do with your written-off car.

      I hope this helps.

      Best,
      Maria

  4. Default Gravatar
    ChrisSeptember 6, 2017

    I had an accident that was not my fault. The car which has only covered 55k kms and was recently given a roadworthy, was damaged but still driveable. The assessor came and inspected the damage when i was not present and has assessed the vehicle as a total loss. I do not believe that the damage is more costly than the value of the car, and i want to have it repaired. What can i do to make sure the insurance company gets the vehicle repaired?

    • Staff
      DanielleSeptember 7, 2017Staff

      Hi Chris,

      Thank you for contacting finder. We are a comparison website and general information service, we’re more than happy to offer general advice.

      I would suggest that you contact your insurer and go through their internal dispute process to see if they will be able to assist you with getting the vehicle repaired. If you still have not reached an agreement, you can proceed by contacting the Financial Ombudsman Service (FOS) for a resolution.

      I hope this helps.

      Cheers,
      Danielle

  5. Default Gravatar
    August 8, 2017

    2 months ago my daughters car was rear ended, the lady was insured with RACQ but she apparently told them not to pay out the car as it was a right off.
    I need to know as the police and ambulance were called, but I have since found out they did not do a report on the incident. Is it true that people with insurance have the authority to not pay out for damage done to the other car when they are at fault.

    • Default Gravatar
      JonathanAugust 9, 2017

      Hello Tracey,

      Thank you for your inquiry. Please be advised that you have reached finder.com.au and we provide generic advice.

      After the accident, the insurer will have vehicle assessors to validate whether the car is a write-off, and this is not just a discretion by the driver. Vehicle assessors would calculate the cost of repairs and make this judgment. They will inspect the overall condition of your vehicle and analyse the collision damage.

      Usually, these are the requirements for the claim:

      – Your RACQ policy number
      – Your vehicle registration number, make and model – and that of anyone else involved
      – The date and details of the incident
      – A Police Report Number (if applicable)
      – The drivers licence number, expiry, type and class
      – Residential address of you and anyone else involved in the incident
      – Contact details of any witnesses or other people involved
      – Details of any towing company used
      – Your paid invoices

      You can contact RACQ on 13 7202 or visit an RACQ branch for the review of the documentation.

      Hope this helps.

      Cheers,
      Jonathan

  6. Default Gravatar
    July 24, 2017

    I was side swiped by a van , I got his phone number , license number, name…but not his address….I contacted my insurance company, put in a claim and was told I had to pay the excess and it was an at fault claim because they could not recoupe the cost of the repairs from the other party as they could not contact him…… because I had no address ….my insurance policy increased from $600 to $2200….and my rating went from 1-5…..I don’t believe this is correct, but they aren’t willing to change the insurance amount and they claimed I should rating protection….I have never heard of that….do you think I would have a case with the ombudsman…..thank you

    • Default Gravatar
      JonathanAugust 3, 2017

      Hello Mary,

      Thank you for your inquiry.

      Please review the Terms and Conditions or the Product Disclosure Statement (PDS) of your insurance policy. It normally contains the dispute process on how to resolve these cases.

      Usually, after talking with Claims Team, you can escalated it to their internal dispute department who will take a second look. In the event that you’re still dissatisfied about the outcome, that’s the time you can proceed with the Ombudsman.

      Hope this helps.

      Cheers,
      Jonathan

  7. Default Gravatar
    LisaJuly 11, 2017

    My husband has a company car and the company said they can no longer get their own insurance and all employees with company cars will have to insurance the car under their own personal insurance policy. Just wondering if this is legal?

    • Staff
      LiezlJuly 11, 2017Staff

      Hi Lisa,

      Thanks for reaching out. Just to confirm, you have reached finder.com.au, not actually FOS and we are unable to provide you legal advise.

      Please contact the Fair Work Ombudsman on this number 13 13 94 to clarify the obligations employer/employee have around entitlements.

      Cheers,
      Liezl

  8. Default Gravatar
    christianeJune 19, 2017

    My husband had a car an accident and he told the other party to get a quote or two to fix the car. He emailed us with a quote of $620. My husband said fine I will pay you and not claim on my insurance as my excess is $600. A few days later, the insurance gentlemen emailed us with a quote of $865. My husband said no I will pay the original repairer’s quote.

    Why should it be different, the repairer is the same? Now the insurance has come back with a quote of $764 and they want is settled straight away. Is this normal that a quote can be changed? What should we do, pay the original quote of $620 or the last one of $764?

    • Default Gravatar
      JonathanJune 20, 2017

      Hi Christiane!

      Thanks for the comment.

      It is recommended to talk this with the insurance company in question. Provide them with the evidence (email) that this is what they have quoted to you at the beginning. They should have a valid reason why they’re increasing the amount, so try to hear them out and refer to the Product Disclosure Statement you had as part of your policy about some price clauses and terms. It is likely disclosed in there.

      Now if you received no satisfactory explanation about the increased amount, you can request to have your concern escalated to the internal dispute team of the insurance company. Should you and them still cannot agree on the resolution, that’s the time you can have it escalated to the Ombudsman.

      Hope this helps.

      Cheers,
      Jonathan

  9. Staff
    JonathanFebruary 22, 2018Staff

    Hi Tina, thanks for your comment. We are sorry to hear about your accident and hope you are okay.

    In regards to your policy and claim, it would be best to contact the Financial Services Ombudsman directly. Things you may like to have prepared beforehand would include:

    -Dates you contacted your insurer.
    -Staff/ conversation details when they told you three times that your policy was active during the period of accident.
    -Your insurance account details.

    I have emailed you the Financial Ombudsman Service for car insurance page.

    I hope this helps.

    Jonathan

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