An increasing number of people are complaining about their health insurance, with the Insurance & Financial Services Ombudsman (IFSO) Karen Stevens saying rising healthcare costs and increasing pressure on the health system are likely contributors.
The IFSO Scheme said, for the first time, its latest annual figures show health insurance as the “single largest product category of disputes investigated” - increasing by 91% and overtaking both house and motor vehicle insurance.
In the year to June, health insurance disputes increased from 89 to 170, travel insurance went up 107 to 141, while motor vehicle insurance rose from 114 to 133. House insurance disputes decreased from 143 to 132.
This comes against the backdrop of rising health insurance premiums. In the most recent Consumers Price Index (CPI) data release, health insurance saw a 19.2% annual jump. Last year, the Reserve Bank said health insurers were facing “pressure from increasing claims costs.”
When it came to health insurance disputes, Stevens said: “Many of the disputes we considered involved disagreements about policy exclusions, benefit eligibility, limits, or changes to policy terms. Consumers generally do not realise how those factors affect their cover until they need to make a claim.”
Travel insurance disputes also increased by 32% with a number of complaints linked to disruptions caused by conflict in the Middle East. Other complaints were related to policy exclusions and the extent of cover available when travel plans get disrupted.
Dispute volumes up almost 190% over past five years
The IFSO Scheme handled 3977 cases in the year to June. This included 2602 complaints.
The IFSO Scheme helps resolve complaints about insurance and financial services, and insurers providing financial services to retail clients must belong to an approved dispute resolution scheme, of which the IFSO is one.
It completed 833 dispute investigations, the highest number in its history, increasing 46% compared with the previous year. More than 92% of disputes accepted by the IFSO Scheme were insurance related.
The IFSO Scheme said "there were 67 (up from 59 last year) complaints with payments to consumers totalling $1,391,100.83 recorded on our database (up from last year $775,395.67)".
Dispute volumes have increased almost 190% over the past five years from 2022 to 2026.
“We are also seeing growing use of AI tools to make complaints, which have had an impact on the volumes we’re receiving,” Stevens said.
At the heart of many disputes was about what insurance policies do and don’t cover, Stevens said, with the scope of cover and policy exclusions the main issues in disputes investigated by the IFSO scheme.
“Consumers are experiencing financial pressures, which can make the outcome of an insurance decision even more important.”
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