How to Survive Your First Insurance Claim
An insurance claim is not an assessment of what happened. It is an assessment of what you can demonstrate happened, against the specific words in your policy.
That distinction explains most claim disappointments. People assume the insurer will work out what is fair. What the insurer actually does is compare evidence against wording — which means your job is to produce evidence and to understand the wording before you describe anything.
The 10-minute version
- Photograph everything before you move or clean anything. Cleanup destroys evidence, and evidence is what pays.
- Read the definition of the thing that happened in your product disclosure statement before you describe it. “Flood”, “storm”, “accidental damage” and “wear and tear” have specific policy meanings and they decide the outcome.
- If it is denied, escalate. Internal dispute resolution first, then AFCA, which is free to consumers and overturns decisions regularly.
The order to do things in
1. Make it safe. Turn off power or water if needed, and stop further damage — insurers expect you to take reasonable steps, and failing to can reduce a payout.
2. Photograph and film, before touching anything. Wide shots, close-ups, serial numbers, the tide line, the broken thing in place. Film a narrated walk-through. This is the highest-value ten minutes of the entire process.
3. Find the policy and read the relevant definition. Not the whole document — the definition of the event and the exclusions section.
4. Ring and open the claim. Get a claim number. Write down the name of who you spoke to and when. Do this for every subsequent call.
5. Describe what happened factually and briefly. Dates, times, sequence. No speculation about cause, and no adjectives.
6. Keep every receipt for emergency repairs, accommodation, replacement essentials and cleaning. Many policies cover temporary accommodation and emergency repairs, and people fail to claim them.
7. Do not dispose of damaged items until the insurer confirms, unless they are a health hazard — and if you must, photograph them thoroughly first.
8. Get the assessor’s findings in writing.
The wording that decides outcomes
Where claims actually fail:
“Flood” versus “storm”. These are separately defined. Water entering from rising watercourses is flood; water entering through a roof during a storm may be storm damage. Some policies cover one and not the other, and the distinction is in the definitions.
“Accidental damage”. Often an optional add-on rather than a default inclusion. Many people believe they have it and do not.
“Wear and tear”, “gradual damage” and “lack of maintenance”. Almost universally excluded. A leak that has been slowly happening for months is typically not covered, which is precisely why reporting maintenance issues in writing when you notice them matters — see How to Survive Your First Rental Inspection.
“Actions of the sea”. Excluded in most home policies, and distinct from flood.
Sum insured, and under-insurance. If you insured for $400,000 and rebuilding costs $650,000, the shortfall is yours. This is extremely common and worth checking annually.
Excess. Per claim, and sometimes multiple excesses apply if several policy sections are triggered.
Time limits. Policies require prompt notification. Delay gives an insurer a reason.
What not to say
Not because honesty is optional — it is not, and misrepresentation voids policies. But because speculating about cause is not your job and speculation gets recorded.
- Do not guess at the cause. “The pipe must have been leaking for a while” is speculation that maps directly onto a gradual-damage exclusion. Describe what you observed and when.
- Do not minimise. “It’s probably nothing” gets recorded and reduces the claim.
- Do not exaggerate or add items. It is fraud, it is checked, and it voids everything.
- Do not accept the first figure if it does not cover the loss. Ask how it was calculated and provide evidence — quotes, receipts, valuations.
- Do not sign a final release while you are unsure whether the damage is fully understood.
When it goes wrong
Internal dispute resolution (IDR). Every insurer must have a complaints process. Put your complaint in writing, state what you want, and attach the evidence. Insurers have a defined timeframe to respond, and a meaningful number of decisions change at this stage.
AFCA — the Australian Financial Complaints Authority. Free to consumers, independent, and its determinations bind the insurer. Go here if IDR fails or the insurer misses its timeframe. This is the single most under-used consumer protection in the country.
Keep a claim diary. Every call, date, name, and what was said. It is dull and it is the thing that makes an AFCA complaint straightforward.
A financial counsellor (National Debt Helpline, 1800 007 007) can help if a denied claim is causing hardship.
What actually goes wrong
Cleanup happens before photographs. The most common and most expensive mistake.
The policy is read after the claim rather than before.
People speculate about cause and talk themselves into an exclusion.
Under-insurance is discovered at claim time, years after the sum insured was set.
Receipts are not kept, so recoverable costs are not recovered.
A denial is accepted without using IDR or AFCA.
Items are thrown out before the assessor sees them.
No record of calls, so it becomes your memory against their file notes.
Thresholds
| Situation | The rule |
|---|---|
| Immediately after damage | Make safe, prevent further damage, then photograph everything before moving it |
| Before describing the event | Read the definition of that event and the exclusions |
| Every call | Claim number, name, date, and a note of what was said |
| Damaged items | Not disposed of until confirmed, unless a health hazard — photograph first |
| All costs | Receipts kept, including accommodation and emergency repairs |
| An offer below the loss | Ask how it was calculated. Provide quotes and evidence |
| Denial or delay | Internal dispute resolution, then AFCA. Both free |
| Annually | Check the sum insured against actual rebuild and replacement cost |
What it costs
| Tier | Spend | What it buys |
|---|---|---|
| Free | $0 | The photograph and video inventory, reading the PDS, a claim diary, IDR, AFCA |
| Free and overlooked | $0 | Checking your sum insured annually. Under-insurance is the most common expensive surprise |
| Sometimes worth it | $500–2,000 | An independent assessor or loss adjuster for a large disputed claim |
| Free | $0 | National Debt Helpline, if a denied claim causes hardship |
The drill: the twenty-minute preparation
Done before anything happens, because after is too late.
- Ten minutes. Photograph every room with cupboards open, and film a narrated walk-through. Upload it to cloud storage.
- Five minutes. Find your policy number and the 24-hour claims line, and write both on paper in the go-bag.
- Three minutes. Read the definitions of “flood” and “storm” in your PDS, and check whether you have accidental damage cover.
- Two minutes. Compare your sum insured against what it would actually cost to rebuild and replace. If it looks low, ring the insurer.
Frequently asked questions
What should I do first when making an insurance claim?
Make the situation safe and prevent further damage, then photograph and film everything before you move or clean anything. Evidence is what claims are decided on, and cleanup destroys it.
Why do insurance claims get denied?
Usually because of policy wording rather than dishonesty: an excluded event, gradual damage or lack of maintenance, an event that falls under a definition you are not covered for, or insufficient evidence. Reading the definitions before describing the event matters.
What is the difference between flood and storm cover?
They are separately defined. Water entering from rising watercourses is generally flood; water entering during a storm may be storm damage. Policies cover them differently, so check both definitions in your product disclosure statement.
What can I do if my claim is refused?
Use the insurer’s internal dispute resolution process in writing, then escalate to AFCA — the Australian Financial Complaints Authority — which is free to consumers, independent, and whose determinations bind the insurer.
Should I throw damaged things out?
Not until the insurer confirms you can, unless they are a health hazard. If you must remove them, photograph them thoroughly first, and keep a list with photos of everything discarded.
What is under-insurance?
Being insured for less than the actual cost to rebuild or replace, so the shortfall falls on you. It is very common, and checking your sum insured against real costs once a year is the fix.