Motor vehicle insurance has emerged as one of the biggest pressure points in Australia’s financial services sector, with complaints rising sharply in a record year for the Australian Financial Complaints Authority (AFCA).
AFCA received 111,373 complaints in the 2025 calendar year – a 14 per cent increase on 2024 – with consumers and small businesses securing $643 million in compensation and refunds.
Within that total, motor vehicle products generated 12,879 complaints, marking an 18 per cent rise year-on-year. Motor policies were the second most complained-about product category, behind personal transaction accounts.
The surge in motor vehicle disputes comes amid ongoing cost-of-living pressures, rising repair costs and supply chain challenges that have affected vehicle parts and labour availability. While AFCA’s data spans all financial products, the automotive insurance segment remains a significant contributor to overall dispute volumes.
Across general insurance categories, the most common issue reported was delays in claim handling, accounting for 9,274 complaints in 2025. Denial of claims also remained a major concern, with 6,362 disputes lodged – up 32 per cent on the previous year.
For motor vehicle policyholders, these figures reflect ongoing friction around assessment timeframes, repair authorisations, total loss valuations and settlement outcomes.
AFCA Chief Ombudsman and Chief Executive Officer David Locke said the overall data highlighted sustained demand for dispute resolution services and pointed to a pivotal moment for the financial services sector.
The authority has now received more than 634,000 complaints since commencing operations, helping secure $2.1 billion in compensation for consumers.
While large-scale collapses in financial advice firms drove significant increases in investment-related disputes, the strength of motor vehicle complaint numbers underscores the scale and importance of the automotive insurance market in Australia.
With major reforms underway across general and life insurance and a new banking code in force, insurers are under increasing scrutiny to lift service standards, improve transparency and deliver faster, fairer outcomes for customers.
For the motor insurance sector, the 2025 figures serve as a clear signal: claim handling performance, communication and dispute management remain critical to maintaining customer trust in an increasingly cost-sensitive environment.