General insurance disputes increased by 34% in the 2008/09 financial year, according to the latest annual review from the Financial Ombudsman Service (FOS).

This compares with rises of 68% in the investment area, 28% in life insurance and 36% involving credit. Across the board, disputes were up 33%.

Chief Ombudsman Colin Neave says extreme weather events such as storms and bushfires have had an impact on general/domestic insurance disputes.

Disputes involving home insurance (27%) and contents (10%) trailed motor (39%). Travel insurance accounted for 16% of disputes.

The most prevalent source of disputes concerns agreed understanding about the extent of the cover.

Among the general insurance products to see a small number of disputes were sickness and accident, personal and domestic property, consumer credit insurance and residential/strata title insurance.

Mr Neave wants financial services providers to ensure their own internal dispute resources match the demand.

“We certainly aren’t seeing any indication that the number of disputes will decrease in the short term,” he said.

See FINANCIAL SERVICES and ANALYSIS.