I've heard other horror stories as well, and as a result I recently looked into gaining loss of licence insurance through another provider. I found it very difficult to find and product that is affordable, that was until someone put me in touch with the transport workers union.
I'm not a member of the TWU, but they have investigated LOL insurance through their brokers and have come up with a product that has better benefits (eg it will payout if you bust yourself up through a sporting injury etc), the only catch is the capital benefit is circa $300k. That being said, the premiums are close to half of that of AFAP when you include membership costs etc, and it is an insurance policy.
** It's just some food for thought, there's now some other options if you're prepared to research it and the AFAP no longer have a monopoly.
** I hope it doesn't sound like I'm pedalling TWU membership (I haven't joined up myself), I'm still waiting to see the final PDS's from their insurance brokers.