Guide

FSCL vs IFSO — Which Disputes Scheme Covers Your Car Insurer

When you can't resolve a car insurance complaint with the insurer directly, you can escalate to an external disputes scheme — free to consumers. Two approved schemes handle NZ motor insurance: FSCL and IFSO.

The legal framework

Under the Financial Service Providers (Registration and Dispute Resolution) Act 2008, every financial service provider operating in New Zealand — including every insurer — must belong to an approved external dispute resolution (EDR) scheme. The Act establishes EDR as a free, independent, binding alternative to the courts for consumers.

There are four approved EDR schemes in NZ. Two of them handle motor insurance:

  • FSCL — Financial Services Complaints Limited (fscl.org.nz)
  • IFSO — Insurance & Financial Services Ombudsman (ifso.nz)

Each insurer belongs to one (not both). Which scheme covers your insurer is disclosed on the insurer's website (typically the footer or "Contact / Complaints" page) and on every Certificate of Insurance issued to you.

Which NZ motor insurers belong to which scheme?

Membership can change. The authoritative source is the Financial Service Providers Register — search for the licensed insurer entity (e.g. "AA Insurance Limited", "Tower Limited") to see which scheme they're a member of.

As a rough indication current as of 2026-05-20:

  • IFSO members: IAG New Zealand Limited (AMI, State, NZI brands), Tower Limited, Vero Insurance NZ, Cove Insurance, FMG, AA Insurance, several Lloyd's-underwritten lines
  • FSCL members: Many adviser/broker-distributed lines, Evolve Group Limited (the operator of this site)

Don't rely on the above for an actual dispute — check the Certificate of Insurance you received with your policy, or call your insurer and ask "Which dispute resolution scheme are you a member of?"

The escalation steps

Step 1 — Complain to the insurer directly

You must give the insurer a reasonable chance to resolve the issue first. Put your complaint in writing (email is fine). Include your policy number, claim number (if any), what you're disputing, and what outcome you're seeking. Most NZ insurers have a written internal complaints process and aim to resolve within 20 working days.

Step 2 — Request a deadlock letter

If the insurer's final response doesn't satisfy you (or 40 working days have passed without resolution), ask for a deadlock letter. This is a written statement that the insurer's internal process is exhausted. It's the entry ticket for EDR escalation.

Step 3 — Lodge with FSCL or IFSO

Submit your complaint to whichever scheme covers the insurer. Both accept online forms:

Both schemes are free to the consumer — the insurers fund the schemes via membership levies. The scheme will assess whether the complaint is in jurisdiction (it usually is for motor claims) and engage the insurer for a response.

Step 4 — Adjudication

If conciliation doesn't resolve the dispute, the scheme can make a binding determination on the insurer (up to a monetary cap — typically in the low hundreds of thousands of NZD, depending on scheme and dispute year). The insurer must comply with the determination. You're free to decline the determination and pursue court action instead, but the determination binds the insurer if you accept it.

What gets disputed in motor insurance

Common grounds for motor disputes under the schemes:

  • Claim declined on a ground the policy holder disputes (e.g. non-disclosure of a modification, alleged misrepresentation on application, alleged breach of "reasonable care" clause)
  • Valuation disputes on total-loss claims
  • Repairer-vs-rebuild-vs-write-off decisions
  • Excess application (which excess applied, why)
  • Loss of no-claims bonus on a disputed at-fault determination
  • Premium increases not aligned with policy renewal terms

Why this matters when choosing an insurer

The schemes publish annual case-data summaries. IFSO publications and FSCL news include statistics on complaint volumes, insurer-specific upholdment rates, and the most common dispute themes. The published data is one of the few publicly-available signals about how an insurer behaves at claim time — Consumer NZ uses it in their editorial reviews, and you should too.

Where to read more

Browse insurer profiles