UK automotive insurance coverage complaints speed up

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Complaints to the UK Monetary Ombudsman referring to motor and buildings insurance coverage have surged this 12 months, as delays in declare settlements gas rising public discontent over ballooning premiums.

The Monetary Ombudsman acquired 3,869 complaints about automotive and motorbike insurance coverage between April and June. The determine was up from 2,524 in the identical interval final 12 months and a greater than 50 per cent year-on-year enhance, in keeping with information launched by the Monetary Ombudsman Service.

The surge in complaints comes amid rising public concern about rising premiums. The typical annual automotive insurance coverage premium reached a document £776 within the second quarter of 2023, in keeping with’s automotive insurance coverage worth index, 40 per cent increased than a 12 months earlier.

The Affiliation of British Insurers stated insurers have been decided to make sure motor insurance coverage was competitively priced however the rising prices of repairs, power, labour and alternative elements had made this “more and more difficult.”

The commerce physique additionally stated that it was “involved” concerning the surge in complaints and it could work with its members to be taught from upheld complaints.

Column chart of Average insurance cover price showing The price of car insurance has reached a record high

The rise in motor insurance-related complaints was pushed by a 90 per cent soar in instances about delays in claims in addition to complaints linked to assert values and declined claims, the Ombudsman stated. A scarcity of contractor availability in addition to difficulties to supply materials had additionally hit the pace of repairs, it added.

“Having the fitting insurance coverage is key and will supply individuals the peace of thoughts that, when issues go unsuitable, they’re protected,” stated Abby Thomas, chief govt and chief ombudsman on the Monetary Ombudsman Service. “The place these complaints are pushed by insurers delaying paying out on claims that’s unacceptable.”

Line chart of Q1 complaints linked to delays showing Complaints about motor insurance delays have surged

The automotive insurance coverage sector has been below regulatory scrutiny lately. The Monetary Conduct Authority stated final December that it had seen proof that motor insurance coverage clients whose automobiles had been written off in a crash had acquired payouts decrease than honest market worth.

In June, the regulator ordered Direct Line to assessment claims paid out between 2017 and 2022. This month, the motor insurer stated it could spend £30mn refunding clients it overcharged for house and motor cowl.

The variety of complaints associated to constructing insurance coverage rose to 1,776 instances in the beginning of the monetary 12 months, in contrast with 1,642 in the identical interval final 12 months. Journey insurance coverage instances, in the meantime, greater than doubled since final 12 months to 1,101, the best determine for journey insurance coverage complaints in additional than a decade.  

Rachel Lam, the Ombudsman insurance coverage director, stated journey confidence was rising after the Covid-19 pandemic that introduced the sector to a halt, however insurers wanted to behave responsibly because it continued to rebound.

Alongside complaints about insurance coverage, the opposite most complained about merchandise on this quarter have been present accounts, bank cards and rent buy (motor). Complaints about all these merchandise have elevated year-on-year.

Automotive and motorbike insurance coverage instances represented 36 per cent of all complaints to the Ombudsman within the first quarter of the monetary 12 months, in contrast with 29 per cent over the identical interval final 12 months. Buildings insurance coverage complaints, in the meantime, represented 40 per cent of all claims over the interval.

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