Insurance complaints rise by a THIRD as car and motorbike insurers drag their feet on paying claims
Insurance complaints rise by a THIRD as auto and motorcycle insurers struggle to pay claims
- The FOS has seen a spike in consumer complaints about their coverage
- Car and motorcycle problems top the list, with Britons plagued by delayed payouts
The number of complaints about car, motorcycle and home insurance is increasing because insurers are granting delays in paying claims.
Car and motorcycle insurance was the third most complained about financial product in 2022/23, with home insurance in fifth place, according to the Financial Ombudsman.
The FOS said it had recorded 11,851 car and motorcycle insurance complaints in 2022/23, a 30 percent increase from the previous year.
The ombudsman said this was ‘largely due to insurers delaying payouts’.
Crash, no cash: Many consumers complained that their insurer was trying to undervalue their car
An FOS spokesperson added: “These delays were largely due to the unavailability of parts, as well as repair staff shortages.”
Other reasons for car insurance complaints included insurers throwing out claims for cars stolen through deception, such as relay thefts.
Auto insurance premiums are up 16 percent in a year as insurers say they must pass on rising repair costs.
For example, auto repairers’ energy bills have risen by 300 percent and the cost of paint and parts have risen by 16 percent.
The FOS also recorded more complaints about appraisals – the price insurers pay the owners of damaged or destroyed vehicles.
These quibbles increased from 1,543 in 2021/22 to 1,820 in 2022/23.
Last year, the Financial Conduct Authority’s regulator warned insurers not to undervalue cars and said it was closely monitoring the issue.
The FOS registered 6,497 complaints about home insurance in 2022/23, an increase of 33 percent on the previous year.
The ombudsman’s spokesperson said this increase was due to an “increase in litigation over rejected claims and delays, as well as claim values.”
FOS CEO Abby Thomas said: “Over the past year, FOS has continued to help hundreds of thousands of customers who have had problems with financial companies in banking, lending, insurance and investment.”