Customers must feel ‘confidence’ in their cover prices and how insurance ‘meets their needs’, says ombudsman leader
The number of new insurance pricing complaints received by the Financial Ombudsman Service (FOS) in 2021/22 has dropped to 1,004 – down from 1,507 in 2020/21 and 1,076 in 2019/20.
In most cases, the FOS found that the insurer acted fairly.
However, the firm highlighted that it has regularly heard from customers who felt they had not received a clear explanation for the increase in the price of their insurance.
Of the complaints the FOS resolved in 2021/22, 19% were upheld in the customer’s favour – down from 21% in 2019/20 and 21% in 2020/21.
Rachel Lam, ombudsman leader at the FOS, said: “It is encouraging that the number of complaints about insurance pricing went down last year.
“However, customers need to have confidence in the price of their insurance and how their cover meets their needs.
“At a time when household incomes are being squeezed, it is vital that customers are clear on why their premium changes and what they are covered for if things go wrong.”
Errors flagged
Over the past three years, the FOS has seen complaints about the following:
- Cases where premiums have gone down, which has led consumers to question whether they were treated fairly in the past.
- Customers questioning the rise in their premium and finding it was raised in error. For example, a previous enquiry about the policy being incorrectly recorded as a claim.
- Premiums being quoted higher than the previous year despite shopping around, including cases on motor insurance where people used their cars less during the pandemic.
The FOS was set up by Parliament to resolve individual complaints between financial businesses and their customers on a fair and reasonable basis, as an alternative to the courts.
Where complaints are not upheld, the FOS helps the customer understand what it considers to be unfair practice.
No comments yet