Why people don't complain about insurance claims - from knowing your rights to 'loyalty premiums'

There are lots of things that we can spend money on that we don’t really need to get by in life.

But some things are essential.

Insurance is one of those vitally important purchases that we need to protect us when things go wrong. And in the case of your car, it’s a legal requirement too.

Yet insurance problems are often at the top of the things people contact me to ask for help with – and can be the source of a great deal of distress.

Which is why it’s all the more surprising that people don’t complain about insurance as much as they probably should.

Insurance is a massive industry

Going through Resolver’s annual complaints data for the last year, I was struck by how complaints about insurance seem lower than they should be.

The top four most complained about products (motor, home, package delivery and travel insurance) resulted in around 12,000 complaints in total. This may seem like a huge amount, But to put it in perspective, 26,000 people complained about takeaways and food delivery in the same period.

According to the Association of British Insurers, who represent the UK’s insurance industry, there are of the 26.5 million households in the UK:

· 19.3 million had contents insurance

· 20.0 million had motor insurance

· 16.5 million had buildings insurance

· 2.8 million had mortgage protection insurance

· 1.6 million had private medical insurance

No matter what you think of the insurance industry, it’s clear from those stats that it’s handling the bulk of claims well, or at least acceptably for most people. But I’d still expect to hear from way more people no matter what. So why aren’t people making complaints?

Knowing your rights

Looking at the complaints Resolver’s users have made – and based on the people who contact me after I’ve covered insurance issues on TV - it would seem many people who call to make a claim have their cases turned down on the phone.

This isn’t too much of a problem if your claim doesn’t stand much chance. But insurance is all about shades of grey. So it’s not always easy to know if you’ve been treated fairly.

If you’re making a claim, you are entitled to ask the firm to explain why they’re rejecting the claim in writing – and I’d encourage people to do this. When you get the explanation, it may be that the insurer hasn’t taken in to account important factors that might affect the claim. So this gives you the opportunity to go back and appeal.

If you’re unhappy with the way your claim has been handled, you can make a ‘formal’ complaint about it (or anything to do with your policy, from pricing to service). The firm has a maximum of eight weeks to sort out the complaint. If they miss this deadline or turn down your complaint, you can go to the Financial Ombudsman to appeal for free.

During the claim

You don’t have to wait until your claim is sorted out to make a complaint. Some insurance problems, like subsidence or flooding involve long and complex situations. So if there’s something you’re not happy with you can complain mid-process – and this should not affect your claim according to the regulator’s rules.

One of the biggest insurance gripes is the use of third parties, from loss adjustors to contractors and builders. If the insurer has hired them, then think of them as working for the insurer directly. So it’s their responsibility to deal with complaints about them.

Don’t stay loyal

Of course, it’s not just claims that people need help with. I’m hearing from an increasing number of people who are unhappy with the ‘loyalty’ charge.

This is where you are charged increasing premiums for staying with your insurer where newer customers might be paying less. You can indeed complain about this, but you need to turn detective and get quotes showing the differences in what you’re paying too.

Don’t give up if you’re unhappy with an insurance issue. Resolver can help for free.