Dear Rocio,
How do we as customers get value for our money from insurance companies?
Name and address provided.
Rocio says: Which? Research has shown that when something goes wrong in the insurance market, it often goes horribly wrong. We have found that customers who need to make a claim have a difficult time getting their money back.
Our research found that three in 10 home insurance claimants have to pursue their insurer over a decision, while three quarters of car insurance customers said they were given no explanation as to why their claim was rejected, partially accepted or disputed.
It’s not just about which one? anxiety. The country’s financial regulator, the Financial Conduct Authority (FCA), recently published data on the total cost of insurance – a test of the behavior of insurers.
The results were not very good. The FCA has identified a number of very low claim rates across a range of insurance products, particularly home and travel insurance, and has written to companies urging them to ensure good results for their customers.
In buildings insurance, the overall acceptance rate is just under 68 percent. For individual travel insurance it is 73 percent. By comparison, the vehicle insurance acceptance rate is 99 percent.
Few of us want to make a claim on our insurance. We don’t want our home to suffer structural damage due to bad weather, our car to get into an accident, or our trip abroad to be interrupted due to an emergency.
However, there is compelling evidence that some insurance companies are making an already stressful situation worse by aggressively accepting claims.
If a customer’s claim is rejected, the Financial Ombudsman (FOS) can mediate between you and the company free of charge. However, last month the FOS revealed that it had dealt with the highest number of complaints relating to car and home insurance in the past five years.
Between April and June this year, the FOS said it received 3,869 complaints about car or motorcycle insurance and 1,776 cases about home contents insurance. In contrast, in the first three months of the 2019/20 financial year there were 2,626 and 1,275 respectively.
It is important to note that the FOS is also now dealing with a greater number of customer complaints, suggesting that insurers are more likely to make poor decisions about a claimant’s case. Although the process takes months.
It will not be lost on readers that all of this is happening at a time when premiums are reaching staggering heights.
Industry body the Association of British Insurers recently reported that the average price of car insurance, for example, rose by just over a fifth last year (or almost £90 in cash) – the highest since records began in 2011. year 2012.
In the worst cost of living crisis in decades, customers deserve value for money, especially when it comes to essential insurance such as motorcycle insurance.
It is clear that this situation cannot continue like this. I have previously written about the FCA’s new consumer duty – a set of higher standards that insurers (and all firms in the financial services sector) must meet. Companies that fail to comply with the new standards will face strict action from the regulator.
Better behavior and treatment of customers should help reduce the number of people who have to make claims to the FOS. However, the reality is that insurers have been required to comply with high regulatory standards for some time.
Insurers must heed the regulator’s warnings and offer their clients better terms.
Rocío Concha is director of policy and advocacy at Which?. If you would like your request to be listed on this page, please send an email to [email protected]
Source: I News
I am Moises Cosgrove and I work for a news website as an author. I specialize in the market section, writing stories about the latest developments in the world of finance and economics. My articles are read by people from all walks of life, from investors to analysts, to everyday citizens looking for insight into how news will affect their finances.