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Motor and home insurance complaints rise to five-year high

Written by: Rebecca Goodman
Customer complaints about buildings, car and motorcycle insurance received by the ombudsman are at a five-year high.

Between April and June this year, the Financial Ombudsman Service (FOS) received 3,869 complaints about motor insurance policies and 1,776 relating to buildings insurance.

When combined, this is the highest number of insurance complaints seen by the FOS in five years. It says the increase has been caused by several factors including a rise in insurers delaying paying out claims. A squeeze on the number of contractors available to carry out repairs and also problems with sourcing materials were also to blame.

Complaints about travel insurance also doubled in the last year, to 1,101 for the first quarter of the year, from 504 in 2022. This is the highest figure seen for the first quarter of the year in more than a decade.

Abby Thomas, chief executive and chief ombudsman at the Financial Ombudsman Service, said: “Where these complaints are driven by insurers delaying paying out on claims that’s unacceptable. We expect insurers – as well as other businesses – to treat their customers fairly and in a timely manner.

“If consumers don’t feel they’ve been treated fairly by a financial business, they should contact our free, independent service and we’ll investigate their complaint.”

Current accounts most complained about

The highest number of complaints to the FOS in the first quarter were to do with current accounts. It received 7,224 complaints, and the majority of these were to do with fraud and scams. Of all current account complaints, 5% were to do with account closures.

Credit cards remained the second-most complained about product, with 4,189 complaints over the quarter. Car finance products also came under fire and complaints about hire purchase agreements were at their second highest level since 2019 at 3,678. The only other period they were higher was the last quarter of 2022, when they were 4,414.

Complaints about frauds and scams across all financial products rose by almost 39% to 6,094, from 4,398 a year ago. The FOS said it upheld almost half of these in the consumer’s favour. Around half of these were related to authorised push payment (APP) scams.

Overall, the total number of complaints received in the quarter was 43,953, up from 35,029 the previous year, and 37% were upheld compared to 34% a year ago.

‘Concerned’ by the figures

A spokesperson for the Association of British Insurers (ABI) said: “We’re concerned to see these latest complaints figures from the Financial Ombudsman Service.

“Insurers work hard to process claims as quickly and efficiently as possible whilst managing challenges beyond their control that can impact on timings, such as delays to car repairs. However, clear and timely communication is vital to support the customer throughout any claim.

“We’ll work with our members and the FOS to understand where improvements can be made, in particular any learnings from the complaints that have been upheld.”

Related: How to save on premiums as home insurance prices rise

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