When someone makes a home insurance claim, they are asked a few simple questions.
What did you lose?
Can you prove you owned it?
And does your policy actually cover it?
On paper, that feels straightforward. In reality, it rarely is.
Anyone who has been through a claim knows the hardest part is not always the loss itself. It is trying to piece everything back together afterwards. Remembering what you owned. Finding proof. Working out whether it was actually covered.
Across Australia, regulators and industry bodies have spent years reviewing insurance affordability, claims handling, and customer outcomes. Different reports, different focus areas, but they all point in the same direction.
The biggest problems are not happening at the claim.
They are happening well before it.
A consistent theme comes through the data. A meaningful number of claims do not end in payment. Not always because they should not, but because people cannot provide clear evidence, the process becomes too difficult, or expectations do not match what the policy actually covers.¹
Complaints data tells a similar story. Most disputes are not about fraud. They are about misunderstanding. Limits people did not realise were there. Items that should have been specified but were not. A gap between what someone thought they were covered for and what the policy actually pays.²
And then there is documentation.
Or more accurately, the lack of it.
At claim time, many people simply do not have a clear record of what they owned or what it was worth. So the process slows down. What should be straightforward becomes a back and forth. Validation. Clarification. Reconstruction.
This is something claims teams deal with every day. Instead of starting with clear information, they often have to rebuild it with the customer. Searching for receipts. Looking through old photos. Trying to recall details about items that may have been purchased years earlier.
That is where claims start to feel difficult.
Not because the system cannot handle them, but because the information going in is incomplete.
At the same time, affordability pressure is making this worse. Premiums are rising, particularly in higher risk areas, and people respond in the only way they can. They reduce cover. They lower their sums insured. They stop engaging with the detail.³
Research suggests a large portion of households are underinsured. In some cases, estimates suggest up to 80 percent of Australian households may not have adequate cover relative to replacement cost.⁴ That means the gap between expectation and outcome is growing, not shrinking.
The system itself is also focused on the wrong moment. Much of the industry is designed to respond after something goes wrong, rather than preparing households before it happens.⁵
We are very good at responding after something goes wrong. Claims handling, dispute resolution, complaint reviews. There has been a lot of progress there.
But before a loss, most people are left on their own.
They do not have a clear record of what they own.
They do not fully understand how their policy applies to those items.
They do not know where the gaps are.
So the first time they find out is when they are already dealing with the stress of a loss.
That is why claims feel so hard.
People are not just making a claim. They are trying to rebuild their life from memory while under pressure. What they owned. When they bought it. What it was worth. All at once.
That is where delays happen. That is where frustration builds.
In many cases, the policy is not the issue.
The information is.
If outcomes are going to improve, the focus needs to shift slightly. Not just on how claims are handled, but on what goes into them.
Better documentation before a loss.
A clearer, more practical understanding of cover.
Ongoing preparedness, not just something reviewed at renewal.
This is not a technology problem. The tools already exist. People carry a device in their pocket that can capture what they own, organise it, store proof, and keep it updated.
What is missing is not capability.
It is behaviour, and a simple structure to support it.
If claims start with better information, everything changes. Clear records. Realistic expectations. Fewer surprises at the worst possible time.
Claims move faster.
Disputes reduce.
Customers feel more in control.
Insurers are working with facts, not assumptions.
Right now, we are trying to fix claims at the end of the process.
But the root cause sits at the beginning.
Every review, every dataset, every inquiry is pointing to the same thing.
The missing piece is not better claims handling.
It is better information before the claim ever starts.
References
- Australian Securities and Investments Commission, Review of General Insurance Claims Handling Practices, ASIC Report 768, 2023
- Australian Financial Complaints Authority, Annual Review 2023–24 and General Insurance Complaint Data
- Insurance Council of Australia, natural disaster loss data and affordability commentary, 2024–2025
- Australian Government, Department of Social Services, Underinsurance research, 2023
- Productivity Commission, Natural Disaster Funding Arrangements Inquiry Report
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