Dealing with a declined claim, slow response, or unfair treatment from your insurer? You have real options. Here's a plain-English guide to the complaints process in NZ, from talking to your insurer through to the Ombudsman and beyond.
Let's be honest: most people never think about complaining to their insurer until something goes sideways. Maybe your claim has been declined and you think the decision is wrong. Maybe you've been waiting weeks for a response and nobody is returning your calls. Or maybe the settlement offer feels like a lowball and you know your car, house, or belongings are worth more than what's on the table.
These are all common situations in New Zealand, and you're far from alone. The Insurance & Financial Services Ombudsman (IFSO) receives thousands of enquiries every year from Kiwis who feel they've been treated unfairly by their insurer. In the 2022/2023 year, the IFSO handled over 4,500 contacts from consumers.
The most frequent reasons for complaints include claim declines (often related to non-disclosure or policy exclusions), delays in claim processing, disputes over the value of a settlement, poor communication, and disagreements about policy terms. After major weather events like Cyclone Gabrielle, complaint volumes tend to spike as insurers work through large backlogs of claims.
The good news is that New Zealand has a well-established system for resolving insurance disputes. You have clear rights, and there are free services available to help you. But the process works best when you follow the right steps in the right order.
Before you fire off an angry email or post a rant on social media, take a breath. There's a structured process that's far more likely to get you a good result. Here's how it works.
This might sound obvious, but the first step is always to raise the issue directly with your insurer. Every insurance company operating in New Zealand is required to have an internal complaints process, and they're legally obligated to tell you about it.
Start by contacting the person or team you've been dealing with. Explain clearly what the problem is and what outcome you're looking for. Be specific. Saying "I'm unhappy with my claim" is less effective than saying "My claim was declined because of a pre-existing condition exclusion, but I disclosed my full medical history when I took out the policy, and I'd like the claim reassessed."
If the frontline team can't resolve your complaint, ask for it to be escalated to a senior complaints handler or a dedicated complaints team. Most major NZ insurers have internal dispute resolution teams whose job is to review complaints with fresh eyes.
Your insurer must acknowledge your complaint and give you a clear timeframe for when you can expect a response. Under the Fair Insurance Code, insurers who are members of the Insurance Council of New Zealand (ICNZ) must respond to complaints within specific timeframes.
Keep a record of every interaction. Note down the date, the name of the person you spoke to, what was discussed, and any commitments they made. Follow up phone calls with an email summarising what was agreed. This paper trail becomes very important if the complaint goes further.
Many complaints are actually resolved at this stage. Sometimes it's a misunderstanding, sometimes the insurer realises they've made an error, and sometimes a fresh pair of eyes leads to a different outcome. Give your insurer a fair chance to put things right before moving on.
Follow these steps before escalating your complaint
Call or email the person or team handling your claim. Explain the issue clearly and state the outcome you're after. Ask for the complaint to be formally logged.
Follow up any phone conversation with a written summary via email or letter. Include your policy number, claim number, dates, and a clear description of the problem.
If the initial response doesn't resolve things, ask for your complaint to be escalated to a senior complaints handler or the internal disputes team.
Ask your insurer for a written final response. This is sometimes called a 'deadlock letter.' You'll need this if you want to take your complaint to the IFSO.
Your insurer should respond within a reasonable timeframe. If you haven't heard back within two months, you can go to the IFSO even without a final response.
The Fair Insurance Code is a code of conduct administered by the Insurance Council of New Zealand (ICNZ). It sets out minimum standards that ICNZ member insurers must follow when dealing with customers.
The Code covers the entire insurance relationship, from how policies are sold through to how claims and complaints are handled. It was updated in 2024 to strengthen consumer protections, and it applies to most of the major insurers in New Zealand, including AA Insurance, AMI, Tower, State, and Vero.
Under the Fair Insurance Code, your insurer must provide clear, plain-language information about your policy. They must handle claims fairly and promptly. They must have a transparent internal complaints process and make it easy for you to use. They must tell you about the IFSO scheme if they can't resolve your complaint. And they must not use pressure tactics or misleading information.
The Code also sets specific timeframes. Your insurer should acknowledge your claim within five working days. They should keep you informed about the progress of your claim. And once they've made a decision, they should explain it clearly and tell you how to challenge it if you disagree.
It's worth knowing that the Fair Insurance Code sits alongside legal requirements under the Financial Markets Conduct Act and the Financial Markets Authority (FMA) regulations. So your insurer has both a voluntary code and legal obligations to meet.
If you believe your insurer has breached the Fair Insurance Code, you can raise this in your complaint and with the IFSO. While the Code itself doesn't have direct legal force, breaching it can be a factor in how a complaint is assessed.
If your insurer's internal process hasn't resolved your complaint, the next step is the Insurance & Financial Services Ombudsman (IFSO). This is a free, impartial dispute resolution service, and it's one of the best consumer protections available to Kiwis.
The IFSO is not a government body. It's an approved dispute resolution scheme under the Financial Markets Authority. All licensed insurers in New Zealand are required by law to belong to a dispute resolution scheme, and the IFSO is the main one for insurance complaints.
Here's how it works. You contact the IFSO with your complaint. They'll first check that you've tried to resolve it with your insurer (which is why step one matters). Then they'll assess whether your complaint falls within their jurisdiction. If it does, they'll investigate by reviewing the facts, your policy, and both sides of the story.
The IFSO process is designed to be accessible. You don't need a lawyer. You don't need to pay any fees. You can make your complaint by phone, email, or through the online form on the IFSO website. Their team will guide you through what information they need.
Most cases are resolved through negotiation and mediation. The IFSO will work with both you and your insurer to find a fair outcome. In many cases, this results in the insurer reconsidering their decision, offering a better settlement, or agreeing to take specific action.
If mediation doesn't work, the IFSO can make a formal decision. This decision is binding on the insurer (up to $350,000) but not on you. If you're unhappy with the IFSO's decision, you still have the option of going to court. Your insurer, on the other hand, must accept it.
The IFSO typically resolves complaints within a few months, though timeframes vary depending on the complexity of the case. During major events (like the Auckland floods or Cyclone Gabrielle aftermath), processing times can be longer due to increased volumes.
A snapshot of the IFSO's work in New Zealand
The IFSO is a powerful tool for consumers, but it does have boundaries. Understanding what falls within their scope (and what doesn't) will help you decide whether it's the right path for your situation.
The IFSO can investigate complaints about claim declines, delays in processing claims, settlement amount disputes, policy cancellations, premium disputes, non-disclosure issues, and problems with how your policy was sold. They cover all types of personal insurance - car, home, contents, travel, health, life, and more.
They can make binding decisions requiring your insurer to pay you up to $350,000. They can also require the insurer to take specific actions, like reassessing your claim or correcting an error. In some cases, they may award compensation for stress and inconvenience, though these amounts tend to be modest.
There are things the IFSO can't do, though. They can't deal with complaints about premium pricing (what your insurer charges you is a commercial decision). They can't investigate complaints about business or commercial insurance policies - only personal insurance. They can't override the terms of your policy if those terms are clear and were properly communicated to you. And they can't award compensation above $350,000.
The IFSO also has time limits. You generally need to bring your complaint within two months of receiving your insurer's final response, though they can extend this in some circumstances. And if more than six years have passed since the event you're complaining about, it's likely outside their jurisdiction.
If your dispute involves more than $350,000, or if it's a commercial insurance matter, you would need to go through the courts instead. The Community Law network can help you understand your legal options if your complaint falls outside the IFSO's scope.
Understanding the boundaries of the IFSO scheme
The IFSO handles the bulk of insurance complaints in New Zealand, but it's not the only avenue. Depending on your situation, other organisations may be able to help.
The Consumer Protection team (part of the Ministry of Business, Innovation and Employment) provides information about your rights under the Fair Trading Act and the Consumer Guarantees Act. If you think your insurer has engaged in misleading conduct or unfair contract terms, Consumer Protection can tell you where you stand and what steps to take.
The Financial Markets Authority (FMA) is the regulator that oversees financial service providers in New Zealand, including insurers. While the FMA doesn't resolve individual complaints, they do want to hear about systemic issues and serious misconduct. If you think your insurer is behaving in a way that could be affecting multiple consumers, reporting it to the FMA can trigger a broader investigation.
Consumer NZ is worth checking out for their research and reviews of insurance providers. They publish customer satisfaction surveys and can help you understand how different insurers compare on claims handling and complaints resolution.
The Citizens Advice Bureau (CAB) offers free, confidential advice on a huge range of consumer issues, including insurance disputes. They can help you understand your options and point you in the right direction. With offices throughout the country, they're an accessible starting point if you're unsure where to turn.
If your dispute is too large for the IFSO (over $350,000), or if you're unhappy with the IFSO's decision, the Disputes Tribunal (for claims up to $30,000) or the courts are your next options. The Community Law centres can provide free legal guidance, and some lawyers offer initial consultations at no charge.
Canstar also publishes regular ratings of NZ insurance providers, which can be useful research if you're considering switching to a different insurer after a poor experience.
How you handle your complaint can make a real difference to the outcome. Here are some practical tips that improve your chances of getting a fair result.
Keep everything in writing. Phone calls are fine for initial contact, but always follow up with an email or letter that summarises what was discussed. If your insurer makes a commitment over the phone, ask them to confirm it in writing. A clear paper trail makes it much harder for things to fall through the cracks or for there to be disagreements about what was said.
Be specific about what you want. A complaint that says "I'm unhappy and I want this sorted" is less effective than one that says "My claim was declined on the basis of exclusion 4.3, and I believe this is incorrect because of X, Y, and Z. I'd like the claim reassessed and paid." The clearer you are, the easier it is for your insurer (or the IFSO) to work with your complaint.
Stick to the facts. It's completely natural to feel frustrated or angry, but emotional complaints tend to be less effective than factual ones. Focus on what happened, when, what the policy says, and why you think the decision is wrong. Save the commentary for a chat with your mates.
Know your policy. Read the relevant sections of your policy wording before you complain. Understanding exactly what your policy says (and doesn't say) puts you in a much stronger position. If there's ambiguity in the wording, that can actually work in your favour, as the IFSO generally interprets unclear terms in the consumer's favour.
Keep track of deadlines. If your insurer gives you a timeframe for a response, mark it in your calendar. If they miss it, follow up immediately. If you need to escalate to the IFSO, be aware of their time limits too. Letting deadlines slip can weaken your position.
Don't accept a final answer you disagree with. If your insurer declines your complaint and you believe you're in the right, escalate it. That's what the IFSO is there for. Too many people accept a "no" when they have legitimate grounds for a different outcome.
Gather supporting evidence. Photos, receipts, correspondence, expert opinions, independent valuations - anything that supports your version of events can strengthen your complaint. The more evidence you can provide, the stronger your case will be.
As a policyholder in New Zealand, you have a solid set of rights. Knowing them puts you on a stronger footing when things don't go to plan.
Under the Financial Markets Conduct Act 2013, your insurer must deal with you fairly and in good faith. They must provide clear, accurate information about their products. They can't use unfair contract terms. And they must belong to an approved dispute resolution scheme (like the IFSO) so you have somewhere to go if things go wrong.
You have the right to a clear explanation of why a claim is declined. Your insurer can't just say "no" and leave it at that. They must tell you the specific reasons for the decision and point to the relevant policy terms. If they fail to do this, that's a valid basis for a complaint in itself.
You have the right to have your complaint dealt with promptly. While there's no single legal timeframe that applies to all situations, the Fair Insurance Code sets benchmarks, and unreasonable delays are something the IFSO takes seriously.
You have the right to access the IFSO free of charge if you can't resolve things directly with your insurer. Your insurer is legally required to tell you about this right. If they don't, that's another red flag.
You also have the right to cancel your policy at any time (subject to your policy's cancellation terms) and to receive a refund of any unearned premium. If you're unhappy with your insurer and want to switch, you're free to do so. Getting estimates from other providers on Compare.org.nz takes just a few minutes and can give you a sense of what else is available.
The Citizens Advice Bureau and Community Law centres are excellent free resources if you need help understanding your specific rights in a particular situation. They deal with insurance questions regularly and can provide practical, plain-language guidance.
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