Suncorp subsidiary AAMI has rejected criticism that it is underquoting rebuilding costs and delaying construction for properties destroyed in the Wye River bushfires last December.

Federal MP for Corangamite Sarah Henderson says AAMI’s treatment of policyholders with complete replacement cover has been “nothing short of disgraceful”, and says the company has underquoted the cost of the rebuild by $100,000-$250,000 in at least six cases.

“The problem is AAMI will not rebuild the home itself – the policy does offer this discretion – and it is refusing to provide sufficient money to cover the cost of the rebuild,” she told Parliament last week.

“It is using companies that have no local knowledge of the terrain and the complexity of building to the required bushfire attack level.”

AAMI, which received 63 claims following the fires, says it is in the final stage of resolving the last seven claims still in negotiation.

Most Wye River customers bought complete replacement cover.

“This provides full insurance cover, meaning customers cannot be underinsured,” AAMI said in a statement.

“However, claims under these policies can take slightly longer to settle because there is more work required to ensure the customer’s settlement is the correct amount.”

The insurer says it uses independent building consultants and receives multiple quotes to determine replacement and repair costs.

“We consult closely with our customers throughout this process and negotiate where there are different cost estimates presented. AAMI is committed to resolving these claims as a priority.”

Ms Henderson says in a number of cases AAMI has revealed only the lowest quote to rebuild and refused to release funds so policyholders can get architectural plans drawn up, which she says is required for an independent costing.