Total of 1,099 complaints received over mis-selling and other issues
There has been a surge in complaints about home-emergency insurance cover over the last year, according to a report in the Evening Standard.
The paper revealed that Financial Ombudsman Service received 1,099 new complaints about home-emergency cover — insuring against broken boilers, burst pipes and other domestic crises — in the last nine months of 2011.
Almost three-quarters of those complaints culminated in the ombudsman demanding that households be compensated by providers for mis-selling or other issues.
Ombudsman spokesman Martyn James said: “In the past few years we’ve seen a significant rise in the number of complaints the ombudsman service receives about home-emergency cover.”
The latest figures come only days after HomeServe was fined £750,000 by the regulator Ofcom for making 50,000 silent or abandoned calls to households in two months.
That came in the wake of the firm’s deciding to suspend all telephone sales and marketing activity amid concerns about mis-selling products last year.
The Financial Services Authority is still looking at the case but when the fears of mis-selling came to light, Hazel Cottrell, senior researcher at consumer group Which?, said: “Over the past year we’ve been contacted by dozens of members with complaints about HomeServe — including complaints about pressuring a member into signing up to a policy and cold-calling in an attempt to sell insurance, as well as many disputes over claims. Our recent research into boiler servicing contracts found that HomeServe customers are some of the least satisfied.”
The ombudsman says consumers have received compensation in 72% of the home emergency cover complaints it investigates.
James continued: “Complaints about the sale of home-emergency cover often involve consumers signing up for a free period and the policy then being automatically renewed, and the consumer charged.
“We are also seeing home-emergency complaints relating to the settlement of claims, including issues with the quality of replacements and or repairs, delays in the time it takes to resolve a claim fully or to carry out necessary repairs, the business not returning the property to its previous state once repairs have been carried out, disputes where the business refuses to cover a claim and cases where the business will not reimburse the consumer for costs incurred by using contractors which are not authorised by the insurer.”
Home-emergency cover came in for some negative press last year when Homecall+ — one of the UK’s biggest providers — went bust leaving homeowners and landlords having to shell out for problems with plumbing, heating, drains and electricity, despite having paid on average £200 a year to insure against domestic disasters.
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