Making an insurance claim should ease your stress – not add to it. But new evidence shows that for too many people, dealing with an insurer is worse than the incident they’re claiming for. Consumer champion Which? has taken the rare step of launching a super-complaint against the home and travel insurance sectors, describing them as “broken” and calling for urgent action from the regulator.
What’s the problem?
Millions of us take out insurance every year, from buildings and contents policies to annual travel cover. But Which? says far too many of us are being let down when it matters most, with policy holders reporting endless delays, confusing policy wording, and bizarre reasons for rejecting claims.
Which? highlights the case of traveller Yvette Greenley. Her holiday was cancelled after her flight turned back to Luton two hours into the journey. While her airline refunded the flight, her insurer initially refused to cover other costs, arguing that her holiday had already “started”. Only after Which? raised the case did she receive compensation.
Stories like this are far from isolated. Which? says the sector is plagued by poor service, technicalities that trip people up, and sales practices that leave customers unsure of what they’re really covered for.
What is Which? asking for?
In its super-compliant, Which? is calling on the Financial Conduct Authority (FCA) to:
- Crack down on insurers that fail to meet their legal obligations
- Launch a full market study into poor outcomes for home and travel policyholders
- Work with the government to strengthen consumer protections.
The aim is simple: fairer policies, clearer cover, and claims processes that don’t make an already difficult situation worse.
What is a super-complaint?
Normally, if you’re treated unfairly, you complain to your insurer and – if needed – escalate to the Financial Ombudsman Service. A super-complaint is different. It’s a legal tool consumer groups can use when they believe whole markets are failing customers.
A super-complaint is rare. Which? last used one in 2016 over bank transfer fraud – a move that eventually led to new laws protecting scam victims. You can find out more about getting your money back after authorised push payment fraud here.
What about car insurance?
In its latest report, Which? said that 99% of car insurance claims were upheld.
However, in a separate development, the FCA recently told car insurers to pay around £200 million in compensation to 270,000 UK drivers who were unfairly underpaid when their vehicles were stolen or written off. Insurers had been making automatic deductions from payouts based on assumed pre-existing damage – even for cars in good condition.
What you can do if your insurer lets you down
If your insurer delays, rejects, or underpays your claim, there are steps you can take to protect yourself and increase your chances of a fair outcome.
According to Which? you should:
- Check your policy wording: Look at the sections that relate to your type of claim (e.g. cancellations in travel insurance or storm damage in home insurance). If the wording is unclear, the law says terms must generally be interpreted in favour of the consumer.
- Tell your insurer if you’re vulnerable: If you have a health condition, financial difficulties, or have recently gone through a distressing event, make this clear to your insurer. Under FCA rules, firms must treat vulnerable customers fairly and make reasonable adjustments (e.g. provide extra support or time when handling your claim).
- Make a formal complaint: If you’re unhappy, set out your complaint in writing. Explain why you think the decision is unfair and what you want the insurer to do about it. Insurers must respond within eight weeks. If they don’t, or if you’re not satisfied with the response, you can escalate.
- Escalate to the Ombudsman: The FOS is free and independent. If they agree the insurer has treated you unfairly, the insurer must put things right. This could mean paying your claim, topping up an underpayment, or compensating you for delays or distress.
Consider legal action
Complaints and the Ombudsman aren’t the only options. In some cases, you can take your insurer to court. And if lots of people have been treated badly in the same way, lawyers sometimes launch a group action claim to help people team up and fight back together.
Just to be clear — this bit isn’t part of Which?’s super-complaint. It’s our take at Join the Claim.
In short, if insurers don’t fix their failings, collective action could be the next step.
