Sorting by


Insurers ‘prolong stressful ordeal’ for customers with long delays on claims

Insurers are adding to the misery of consumers making insurance claims by causing them “distress and inconvenience” through delays and unnecessary red tape, according to research by Which?.

The consumer group studied more than 8,500 final complaint decisions by the Financial Ombudsman Service (FOS) which were upheld in the customer’s favour over the past five years.

It found distress and inconvenience were recorded in nearly two-thirds (64 per cent) of all complaints upheld by the service in 2023. This is a jump from over half (53 per cent) of complaints recorded as causing distress and inconvenience in 2019.

Which? identified four insurers that were each found to have caused distress or inconvenience to consumers in at least 70 per cent of upheld complaints. Each received more than 100 complaints in the last five years, most of which were in the motor or home emergency insurance sector.

The numbers of complaints being received by the FOS has increased.

Of the 4,087 complaints received by the FOS in 2023, it upheld over half (51 per cent) in the customer’s favour, up from 41 per cent in 2022 and 40 per cent in 2019.

For travel insurance, they found that customers who had a complaint upheld relating to medical issues had also suffered additional distress and inconvenience in nearly two-thirds (64 per cent) of cases and avoidable delays in nearly a third (31 per cent).

Thirty-two per cent is the industry average across all products.

Insurers’ actions leading to an unnecessary and avoidable delay in resolving a claim were also an issue, according to the analysis.

It found the highest number of upheld complaints were about building-insurance products.
Building-insurance customers experienced unfair delays in nearly half (46 per cent) of upheld complaints – more often than any other type of product.

The true number of customers poorly treated or experiencing unfair delays in resolving an issue when making a claim to their insurer is likely to be higher because not all consumers feel able to make a formal complaint or know the financial ombudsman is available to them.

Which? called for the regulatory Financial Conduct Authority (FCA) to take tougher action against insurance firms that persistently fail to meet requirements to avoid causing­ foreseeable­ harm and to handle claims fairly and in a timely manner.

Rocio Concha, Which? director of policy and advocacy, said: “Our research shows that in many cases insurance providers have caused additional distress and inconvenience to consumers – further prolonging the often already stressful ordeal.

“The FCA’s expectations and regulation are clear, yet it would appear some insurers continue to fall short of the standards expected. The regulator must get tough with poorly behaving companies and take action where necessary.

Source link

Related Articles

Back to top button