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Complaining can force insurers to pay up

Emma Lunn
Written By:
Emma Lunn

Complaining to insurers can be worthwhile, with many complaints resulting in “satisfactory outcomes” worth hundreds or thousands of pounds, a survey reveals.

For insurance customers who feel let down by their provider, taking the time to complain can lead to better outcomes, according to consumer champion Which?

It surveyed almost 16,000 people in October last year and found that almost one in 10 had raised an insurance complaint during the past two years.

The survey found that four in 10 (42%) members who made a complaint had it upheld, while one in three (34%) did not.

The reasons for complaints were varied, with causes including speed of service, disputes over policy wording and mis-selling and administrative errors, with one member being overcharged by £1,000 when payment for their travel insurance was mistakenly taken twice from their bank account. 

Other customers believed they had been unfairly rejected for claims, such as one member whose house was burgled of £7,000 worth of jewellery while they were in the paddock at the end of the garden. 

The underwriter initially concluded the owner was technically off their property and had not adequately secured it. However, following the complaint this decision was reviewed and the claim was accepted.

Recent data from the Financial Conduct Authority (FCA) found that half of insurance complaints were resolved within three days. Less than one in 10 (6%) complaints took longer than eight weeks to resolve – the time firms have to deal with your complaint before you can escalate it to the Financial Ombudsman Service (FOS). 

Complaint compensation

Which?’s survey found that those who do complain may receive compensation as a result. In the first half of 2022, insurers paid out more than £83m in redress – an average of £161 per upheld complaint.

One potential root cause of customer confusion could be down to how some insurers are presenting their policies. A separate Which? survey of people who took out home, travel, car or pet insurance in the past two years found that only one in six (16%) home insurance customers, one in five (19%) travel insurance customers, one in five (20%) car insurance customers and a quarter (26%) of pet insurance customers said they understood their insurance policy “very well”.

The consumer champion is warning insurance customers to make sure they read the small print before signing up to policies so they are not caught out when it comes to making a claim. 

Jenny Ross, Which? Money editor, said: “Consumers shouldn’t put up with bad customer service at any time, but when the rising cost of living is putting severe pressure on household budgets, it’s even more important.

“Our research shows that if your insurer is not up to scratch, it pays to complain. Taking the time to read the small print before renewing is also key, as you might find you’re not covered for certain eventualities.”