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The Financial Ombudsman Service handles complaints about rising and falling insurance premiums

The Financial Ombudsman receives complaints from people after the cost of their insurance has fallen.

This made people question whether they had been treated fairly in the past, the report said.

According to the Financial Ombudsman Service (FOS), customers also questioned increases in their premiums and found they were raised in error, for example when a previous policy inquiry was incorrectly recorded as a claim.

It also received complaints that insurance prices were higher than the previous year, including from motorists who used their cars less during the coronavirus pandemic.

Earlier this year there was a change in insurance prices which meant that insurers were banned from charging customers a higher price to renew their home or car insurance than they would have paid if they were a new customer.

The Financial Conduct Authority (FCA), which introduced the changes, said they were expected to save consumers £4.2bn over the next 10 years.

It said many firms previously offered prices below cost to attract new customers, who paid more over time when they renewed their insurance, while loyal customers paid higher prices.

The FOS said it regularly approaches customers who feel they have not been given a clear explanation of insurance price increases.

This can limit their ability to make informed choices about what insurance cover they need and can reduce confidence, it added.

In most cases, the Financial Ombudsman found that the insurer had acted fairly.

In 2021/22, the ombudsman received around 1,004 complaints about insurance prices, compared to 1,507 in 2020/21.

Around one in five (19%) of complaints dealt with in 2021/2022 were resolved in favor of the consumer.

Rachel Lamb, chief ombudsman at the Financial Ombudsman Service, said: “It is encouraging that the number of complaints about insurance prices has fallen over the past year.

“However, customers need to be confident about the price of their insurance and how well their insurance meets their needs.

“At a time when household incomes are falling, it is vital that customers understand why their premiums change and what they cover if things go wrong.

“If you feel you’ve been treated unfairly by an insurer, you can come to us directly for free and we’ll see if we can help.”

A spokesman for the Association of British Insurers (ABI) said: “We are pleased to see that the number of upheld complaints about insurance prices has fallen by 10% since 2019.

“As the cost of living crisis continues, insurers understand that clear communication with customers is important so everyone knows what they are covered for and why prices may have changed.

“That’s why ABI and several of our members have taken proactive steps to increase customer confidence by working with initiatives such as Plain Numbers to ensure simple and consistent use of numbers in everything we do.

“Insurers are committed to continuing to improve the customer experience, including through our work with the FOS.”

The Ombudsman has information for consumers about pricing and renewals at financial-ombudsman.org.uk/consumers/complaints-can-help/insurance/insurance-pricing-and-renewals

The Financial Ombudsman Service handles complaints about rising and falling insurance premiums

Source link The Financial Ombudsman Service handles complaints about rising and falling insurance premiums

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