Study finds twice as many people prefer a replacement item

The growing use of voucher schemes by insurers to settle contents claims is not meeting the needs of customers, claims handling company SBS Insurance Services has said.

According to a new study by SBS, it found that twice as many people preferred a replacement organised for them than vouchers or cash settlements.

But the strength of feeling varied in line with how specialist the claim might be and the value of the item.

For lost, damaged or stolen items of jewellery, 41% preferred a replacement. For bicycle claims that often need expert knowledge, 60% said they also preferred a replacement.

But just 15%-24% of respondents said they wanted a voucher they could use at a high street chain specified by their insurer, while 10%-14% preferred to take a discounted cash settlement to use when and where they wished.

SBS commercial director Tony Parkes said customers should be given the settlement option that suits their needs. He added that insurers also needed claims handlers with the right skills set and sufficient life experience to understand those needs.

Parkes said: “The insurance industry today has strong commercial incentives in place which encourage take-up of vouchers or which direct people to choose replacement goods from sites such as Amazon. This is not what most people want.

“This option is usually fine for simple replacements for small electrical items, for example, and is obviously part of the mix of solutions to give claimants ‘choice’ in how their claims are settled.

“But real customer choice is not just about product choice, and genuine customer service is not simply about letting people loose in a huge online warehouse to buy whatever they want.”