The consumer group Which? this week called on the regulator to clamp down on insurers that have been “ripping off” consumers with “abysmal” claims handling.
Having surveyed how customers have fared at the hands of insurers over the past three years – and unearthed some shocking stories – the consumer body has demanded that the Financial Conduct Authority take tough action against companies that fall short of the regulator’s required standards.
Which? found that almost half of all people who had made a home, travel, motor or pet insurance claim had experienced at least one significant problem, including repeatedly having to chase insurers for progress.
Other customers said they felt they were being harassed for difficult-to-obtain information about seriously ill or deceased family members before being told the records were not necessary after all.
One woman developed asthma when she was forced to live in a mould-ridden home while her claim dragged on for months.
In another case, an insurer asked a recently widowed customer where her husband was when she called about claiming on their joint policy after a burglary, despite the company knowing of his death.
Other customers described how their insurer had made it almost impossible to claim by repeatedly asking for the same information to be uploaded to online portals, despite this already having been done. Customers described having to phone their company 12 times to make a claim.
Which? says it is particularly concerned about the way some vulnerable customers are treated when they claim.
Rocio Concha, the director of policy and advocacy at Which?, says the research “paints a shocking picture of insurers’ failure to handle customers’ claims in a timely, empathetic way – and it’s particularly concerning to see how people in vulnerable circumstances due to the event that led to their claim are being failed by their insurers”.
She adds: “At a time when many consumers face soaring premiums, it’s clear they are being ripped off – either by abysmal claims handling that doesn’t match up to the price they are paying or by unjustifiably high premiums, especially for those who can’t afford to pay for a year’s cover in one go.”
Which? says the rules for insurers are clear but that the problems will not end unless the regulator takes “meaningful action against firms that consistently fall short”.
The organisation has just launched a campaign called End the Insurance Rip-Off, and is inviting people to support it by signing the petition.
The trade body the Association of British Insurers told Guardian Money that insurers’ first priority is to support their customers, and that the vast majority of claims are accepted and handled quickly.
“Our members know that having to make a claim usually means an individual has already experienced incredibly stressful circumstances, and they want to make the process as easy as possible. It’s always concerning to hear when that isn’t the case, and they will try to deal with complaints efficiently and fairly,” a spokesperson says.
