The Australian Financial Complaints Authority (AFCA) has awarded $12.9 million in compensation and refunds from insurers to policyholders affected by record floods that struck NSW and Queensland a year ago.

AFCA Chief Ombudsman and CEO David Locke expressed concern over the volume of general insurance complaints it has received after a 65% jump to 17,163 since July 1, compared with 10,417 at the same point a year ago.

More than 2000 related to the early 2022 floods, of which 1328 cases have been closed – 74% by agreement or in favour of complainants.

“These sorts of complaints can often be avoided through good, regular communication with customers,” Mr Locke said, while acknowledging the scale of the flood event had put pressure on insurers.

“We would prefer to see insurers resolving many more complaints within their own dispute resolution process rather than consumers having to take the extra step of coming to AFCA – prolonging the time they spend in limbo, unable to get on with their lives.”

Delays in claim handling was the most significant issue, AFCA says, accounting for 37% of the 2022 flood complaints to AFCA. Denial of claims because of policy exclusions or conditions accounted for a third of complaints, while disputes over claim amount made up just over a quarter.

About three-quarters of complaints were for home building insurance, followed by 9% for home contents and 5% landlord insurance.

AFCA says 40% of the flood complaints were resolved at the earliest stage of its process – registration and referral, when a complaint is referred back to the firm to resolve.

AFCA's next most significant weather-related event, February 2020 south-east coast storms, generated just 493 complaints.