Insurance: a complaints guide

At Resolver, it’s clear to us that there are some industries or types of product or service that are particularly perturbing to consumers.

There are lots of reasons why people might not raise a complaint about a company or issue: from fear of repercussions to worries about complexity or having the odds stacked against you.

In the article, we’re shining a spotlight on insurance – an area that seems to be particularly tricky when it comes to knowing your rights and how to raise a complaint. We’ll cover some common disputes, the main kinds of insurance, and what to watch out for when taking out a policy.

Insurance in a nutshell

Insurance contracts can cover all manner of things, from home contents, cherished pets, and vehicles, to medical treatments or mortgage protection. But the main principle behind any insurance policy is to cover you for unexpected events that catch you by surprise and cost you money.

The vast majority of insurance claims go without a hitch. However, there are also a huge number of claims that end up being rejected or aren’t paid in full every year.

As we explored in our recent article on Direct Line’s history of underpaying customers for their vehicle write-offs – there can be company-specific or industry-wide failures to adequately protect consumers, as well as a lack of transparency around ways that customers can be taken advantage of by big insurance firms.

There are lots of people out there who are unhappy with their insurer or disappointed by how their claim went. Yet it can be difficult for consumers to know where they stand when it comes to raising a complaint about it.

Insurance disputes

There are all kinds of issues that can arise when it comes to insurance. However, most of the disputes we see involve terms and conditions or disclosure.

Terms and conditions

Insurance documents are a nightmare to read. For a start, they’re often in tiny font and use legalistic language that’s hard to understand. They can also be enormously long – sometimes over 100 pages!

It’s a standard insurance company argument to say that you are obliged to read the terms and conditions and if you don’t, you could find your claim turned down.

Yet it is, of course, a well-known fact that very few people read their terms and conditions in full. In fact, insurers are actually obliged to give you a ‘key facts’ document that summarises in simple and easily-understandable terms what the most important bits of the contract are.

When you sit down to read the T&C’s of any insurance policy, we’d recommend keeping your eyes out for a few key things:

Excess fees: This is the amount of money knocked off your payment when you make a claim for certain things. As a general rule, the higher the excess, the lower the price of the policy. But it can be more cost-effective to get a more expensive policy as excess fees can sometimes make claims not worthwhile.

Payment limits: This is the maximum the firm will pay out for certain types of claims. You can usually get higher limits for more expensive policies.

Reporting requirements: Now this one is very important. If you’re making a claim for theft or criminal damage you’ll need to report the situation to the police and get proof. If you’re making a claim for an accident or medical treatment, you’ll need to do the same. But you’ll also need to let the insurance company know within a set timeframe. Some poor-value mobile phone contracts have set time limits as low as 12 hours in the past. So always program your insurer’s claims number into your phone, just in case you need to make a claim quickly.

Changing circumstances: If you move, have a medical issue or something happens that could affect the value of a claim, you generally need to notify the insurance company. This is because the change could affect your premiums. For example, if you move into a slightly more ‘edgy’ area, you will probably have to pay more for your car insurance. Failure to disclose a significant issue could result in your claim being turned down.

Disclosure

Disclosure is a big part of many insurance contracts – and perhaps the biggest source of insurance complaints. It most often applies to things like health conditions but can also involve any significant change of circumstances or even things like modifications to your car.

Disclosure means that you have to tell the insurer about anything that might affect the premium. So, for example, if you want to go on holiday but have a serious illness, you’re at a higher risk of needing medical care, so the provider of your travel insurance will want to charge you more. If you took out a policy but neglected to mention your medical condition, you’ve ‘misrepresented’ the situation, and the insurer can ‘void’ your contract – cancelling it without payment.

It used to be that the odds were stacked against you when it came to disclosure. But after years of dodgy behaviour by some insurers, the law was tightened. Now insurers have to ask you clear questions so you can give honest answers. If they don’t do so, you can appeal if your claim is turned down.

Fed up with your insurance provider? With insurance premiums soaring at the moment, it has never been a better time to reconsider your policy. Want to compare insurance quotes? Our partner QuoteZone can help. Whether it’s car insurance, home insurance, pet insurance, or even travel insurance, they’ll help you find the best policy for you. 

The key types of insurance and how to complain about them

There are so many different things you may want to seek out insurance for, but the types of insurance that there are can be broken down into roughly three main categories. Each of these has a few key issues that you may wish to think about if you’re unhappy and want to raise a complaint.

General Insurance

General insurance is a ‘catch-all’ term for insurance that isn’t health-related. The most common products are:

• Buildings
• Contents
• Motor/Bike
• Travel

Complaints about this type of insurance policy can cover a range of subjects, from obtaining repairs and replacements, to disputes over the value of items. Travel insurance is particularly tricky as it’s the one form of insurance that’s designed to cover the widest range of problems. That’s why you’ll get references to volcanos and alcohol consumption all in the same document.

The key thing to remember here is just because a contract has a clause in it, it doesn’t make it fair. If the clause is so ambiguous it could be applied to loads of scenarios or is too hard to understand, you can appeal it. The same goes for really unfair things hidden in the contract that should be drawn to your attention.

If you hit a problem with any of these subjects, Resolver can help you make a complaint – and if that doesn’t work, the Financial Ombudsman can look at your complaint for free. They hate dodgy T&C’s, so don’t give up!

Specific insurance

This also falls under general insurance but is designed to cover a specific product or service. The main product-specific kinds of insurance are:

• Pet
• Mobile/gadget insurance
• Warranties
• Boiler/home emergency
• Card/data protection
• Roadside assistance
• Legal expenses

These contracts can be among the most contentious because they can be pretty flimsy or unclear.

Pet insurance is the one area of complaint that causes the most distress. People love their pets dearly, but with vet bills increasing it’s getting more expensive to insure your pet. However, as we explored recently, even if you only get a basic level of cover, getting pet insurance can save you a fortune.

Warranties can also be particularly unfair. But that doesn’t mean you don’t have any rights. We’re working with the insurance industry, regulator and ombudsman to highlight these unfair contracts wherever they arise. By making a complaint about them, you’re helping us to make things better for the future.

Another thing to watch out for is service contracts. These documents look just like insurance contracts, but they’re not. They’re agreements between you and a retailer or manufacturer to repair the item if something goes wrong. While different from a guarantee, these contracts basically extend those rights. But because they aren’t insurance, you can’t go to the Financial Ombudsman if there’s a dispute. So always check the small print on the documents to see if there’s an underwriter – that’s how you know if you have insurance or not.

Health or life insurance

These policies cover things that you may not want to think about. But they’re really worthwhile considering taking out – and having them can give you some reassurance:

Health insurance is designed to cover you for problems that might require private medical or dental treatment or pay you a set amount if you’re unable to work through illness. Life assurance covers you for exactly that, your life. The insurer will pay out to people of your choice should you die.

Critical illness usually pays a lump sum if you’re diagnosed with a serious illness. It’s designed to help you cope with the significant changes you might be facing should that happen.

Some of the most distressing complaints we see arise from health or life insurance complaints. As a consequence, it’s vitally important that insurers deal with complaints about these products quickly and sensitively.

If you’re having a problem with a health or life insurance claim, make a complaint as soon as you can. Remember that the business can’t penalise you for making a complaint – and you can take some of the stress out of dealing with a difficult situation by making it clear that you aren’t happy.

Making a complaint via Resolver

Insurance is there to help you and give you peace of mind – so we’d always recommend you take it out if you don’t want to lose something you care about. But where things go wrong, we can help.

Insurance complaints are a bit different from other complaints because you need to make a claim first and then make a complaint if you aren’t happy.

You don’t need to be an expert to make a complaint about an insurance product. But it’s definitely worth taking a little time to think about what you’re unhappy about and note down as much as you can.

Try to jot down in your own words what you remember about how the policy was sold to you – and give details about what happened that led to the complaint.

So if you’re unhappy with your insurance policy or how a claim was handled, go ahead and raise your insurance complaint for free via Resolver. If things still aren’t resolved after 8 weeks, you’ll have the option of escalating the complaint to the ombudsman for an independent review.