Disputes over pandemic-related claim denials are set to rise in the coming months, the Australian Financial Complaints Authority (AFCA) has warned, revealing at least 1070 general insurance cases linked to the global health crisis have been lodged.

About 83% of the disputes relate to travel insurance and subsequent fallout from the Federal Government’s decision to ban international air travel except in special circumstances, according to AFCA.

The industry has recorded the second-highest number of disputes after banking and finance, which has 1430 cases, since the coronavirus outbreak was declared a pandemic on March 11 by the World Health Organisation (WHO).

“This won’t just be an issue for banking and finance,” AFCA COO Justin Untersteiner said. “Many will turn to their insurance policies to look for help, and in some cases, they will not be covered, which will lead to disputes.

“Many of these complaints result from poor communication, where a consumer has trouble contacting their firm, does not understand their policy, or is confused about the information they receive.

In many of the travel complaints, claimants say there were not forewarned of possible pandemic exclusions when the policies were bought or that insurers treated the outbreak as a pandemic before the WHO.

Some of the other complaints are lodged by small businesses over having to keep up with premium payments when they have no cashflow during this virus-induced economic slump.

AFCA has released a guide outlining its approach to COVID-19 travel insurance disputes.

It says that if a claim has been denied because of pandemic-related clauses, AFCA will first seek to determine if a claimant has established a valid claim. If the answer is yes, it will consider if the insurer has an exclusion entitling it to deny the claim.

If an insurer is entitled to apply a COVID-19 exclusion, a premium refund would be considered a fair outcome, the guide says.