THOUSANDS of customers who claimed on their car and home insurance last year could be owed compensation.
A review by the regulator found insurance companies had underpaid a large number of customers and has told them to “put right these wrongs”.
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Even where the claim was paid, customers could be in line for a payout.
It comes after the Financial Conduct Authority (FCA) noticed a rise in the number of customers complaining about their car and home insurance claims.
The watchdog found some insurers were undervaluing cars which were written off, and paying out less than they should.
It also uncovered a large number of cases where customers had been forced to wait and unreasonably long time before their claim was resolved.
The watchdog also warned insurers to get their acts together when dealing with struggling customers.
In the first six months of last year customers who complained were paid an average £172 compensation.
By the second half of the year, the average payout had fallen to £94 per person.
Sheldon Mills, consumer director at the FCA, said the regulator would “ensure” customers would get the compensation they were owed.
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“Timely and fair claims handling is especially vital during the cost of living squeeze,” he said.
It comes just days after Direct Line admitted it underpaid some customers.
The insurer is now reviewing all car write-off claims settled between September 1 2017, and August 17 2022.
The company, which has five million customers, has promised to contact any customer with car insurance who received an unfair settlement during this period.
Affected customers will receive compensation plus interest but the firm hasn’t confirmed when this will be paid.
Car insurance complaints rise
The number of rejected car and home insurance claims soared last year, the FCA said.
Rejected claims on home insurance rocketed by 57% between August and November 2022 while failed motor insurance claims were up 24%.
The regulator urged customers unhappy with how their claim is handled to contact their insurance company to complain.
They can also raise a complaint with the Financial Ombudsman Service if they are not satisfied with the firm’s response.
We’ve explained how to do both below.
How do you complain about insurance claims?
Insurers are required to have a written complaints process that tells helps customers how to make a complaint.
You should be able to find the information on their website but if you don’t, ask them to send it to you.
It’s worth making your complaint as soon as possible, as it’ll be easier to remember all the relevant details to strengthen your case.
Then simply follow each stage of the process, and submit as much evidence as you can.
Once you’ve sent in your complaint, the firm needs to give you a response within eight weeks.
If you don’t get a response within eight weeks or you’re not happy with the one you do get, you can take your complaint to the free Financial Ombudsman Service.
How do I take your complaint to the Financial Ombudsman?
If you decide to take your complaint to the Financial Ombudsman (FOS), keep in mind you must typically do so within six months of your provider’s final response.
To get in touch, you need to fill in a form, which you can find on the FOS website.
If you’d prefer to talk it through with someone, the FOS can help you do this if you call 0800 023 4567.
When you get in touch, you need to have the following details to hand:
- Some basic information, including your name and address
- What the problem is, and how you want things put right
- Details such as the policy number or account number that your complaint relates to
The FOS will then look at the evidence provided by both sides, and it may contact you for more information.
Once it’s made a decision, it’ll write to you and if it agrees with your complaint, it’ll say what your insurance firm must do to put things right.
If all else fails and you still think you’re entitled to compensation you can try taking your insurer
