Claims are still taking longer and costing more to settle in Australia this year, even as supply chain issues begin to ease, according to a new update from Crawford & Company (Australia).
The firm’s latest Claims Inflation Update shows that the pressure on insurance repairs in 2026 is no longer mainly driven by major shortages or sudden price spikes. Instead, it is coming from ongoing labour shortages, higher costs, and more complex claims - especially in strata and other high-density settings.
This is showing up in longer repair times, higher costs, and less predictable outcomes depending on the type of claim and where capacity is tight.
“Claims are still costing more, not because the market is chaotic, but because capacity is tight and complexity is rising. When we talk about cost drivers in insurance repairs, it’s worth remembering the repair market is only a small slice of the broader construction sector. That means many of the biggest cost pressures are macro and largely outside insurers’ control,” said Tim Butler, head of contractor connection and CRD at Crawford & Company (Australia).
“That said, there are insurance-specific drivers too: localised surge pricing flowing through to empanelled builders, rapid shifts in compliance requirements, and the growing role of cash settlements.”
Economic conditions are still feeding into claims costs. The report noted that consumer prices rose 3.8% in the 12 months to December 2025, while the Reserve Bank of Australia lifted its cash rate target to 3.85% in February 2026. These factors are helping keep costs elevated and affecting how repairs are priced and delivered.
Labour shortages are also uneven. Crawford’s February 2026 survey of its repair panel found the biggest gaps in trades like tiling and bricklaying, reported by 50% and 47.4% of respondents, respectively. These trades are often needed at key stages of repairs, so shortages can delay entire projects and push up costs.
Cost pressures also vary across trades. Roofers were flagged for sharper price increases, while tilers continue to face higher costs. This means claims can still vary widely even if overall supply conditions are improving.
On materials, supply has generally improved, but delays still happen in certain categories. Flooring, kitchen supplies, and glazing were identified as common problem areas, often causing issues late in the repair process when projects are nearly complete.
The report also points to rising complexity as a key factor. Claims in strata and high-density environments often involve access issues, multiple approvals, and shared services, which can slow repairs and lead to bigger differences in quotes.
“The most useful way to think about claims inflation is not as a single number, but as a widening gap between average outcomes and difficult outcomes, with duration playing a bigger role as capacity constraints and complexity compound,” Crawford & Company said.
