Claims Disputes – complaints against insurance companies rise

Posted Aug 27, 2019.


New research by consumer champions Which? has highlighted a trend that our insurance claims dispute team have already noticed throughout over the past few years: that insurance companies are becoming more difficult to deal with, especially when an individual makes a seemingly legitimate claim on a policy but it is subsequently turned down.

The report shows a big increase in claims related complaints over the previous 5 years. During this period, the Financial Ombudsman Service, the government body who can assist in the settlement of individual disputes between individual policyholders and insurance companies, decided in favour of the individual in one out of every three complaints, resulting in an insurance company paying out on a claim they had previously refused.

Insurance claim complaints by type

In the previous financial year, the report, covering 25,122 claims, indicates that it was travel insurance, home insurance and car insurance that formed the majority of the disputed claims.

Home insurance – in particular for buildings cover - saw the highest volume of complaints, with a significant increase of 42% compared to the previous year. Insurer Ocaso SA was the worst performer, with slightly under half of all disputed claims being overturned. Travel insurance showed the second highest level of complaints, with 34% of rejected claims being overturned, the worst performer in this sector being Allianz. Car insurance complaints fared slightly better, but 29% of disputed claims were still overturned, with Great Lakes insurance having the highest number at 42%.

Main reasons for disputed or rejected claims

The report also reveals the top three general reasons why a policyholder’s claim was disputed or rejected by the insurance company. These were:

Policy exclusions – usually the wording tucked away in the documents that come with an insurance policy. Policy exclusions were most common in pet insurance disputes, with specific medical exclusions often coming to light once a pet had fallen ill and had received (often expensive) veterinary care.

Non-disclosure – where following a claim, the insurer says that they had been misinformed about the policyholder's circumstances and therefore the policy cover may not apply. 

Pre-existing conditions – where an existing medical condition or restriction was not disclosed when the policy was taken out. Disputes based on pre-existing conditions are most common with travel insurance. 

In commenting on the report’s findings, a Which? spokesperson said:

“Our analysis reveals a steep rise in insurance complaints referred to the ombudsman, and while it is encouraging that consumers feel empowered to challenge insurers, we have concerns that firms may not be handling claims fairly…When choosing an insurance firm it's worth checking its record with the ombudsman to gauge how it treats customers - a firm with a high proportion of complaints upheld in favour of customers should be a red flag.”

Get professional and friendly claims advice

At Bakers Solicitors, disputed and rejected insurance claim cases are dealt with on a no win, no fee basis. There is no upfront or unexpected costs, so if you feel you have been treated unfairly by an insurance company please contact us today for straightforward and professional assistance. You can contact us by email, arrange a free consultation online or ring us on FREE on 0800 731 7284.