Regulator must show its teeth over some practices by insurers, says Which?
Regulator must show its teeth over some practices by insurers, says Which?
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The City regulator is being urged by Which? to crack down on some practices by insurers. The consumer group raised concerns that some firms could be failing to meet their obligations under the Financial Conduct Authority (FCA)’s Consumer Duty, which requires firms to focus on customer outcomes by putting themselves in customers’ shoes and pro-actively take action.
It said the impact of poor treatment from insurance firms can be devastating for consumers, many of whom have already had a traumatising experience such as a fire or flooding at their home. A new policy report from Which? called Risky business: Consumer confusion around general insurance said: “Given low claims acceptance rates for some products, this suggests some consumers are receiving nasty shocks when their claims are rejected.”.
The report said three “common misconceptions” had been identified by Which? that may lead consumers to an incorrect assumption about whether they are covered. The regulator must show its teeth and start taking tough enforcement action against insurers that are failing to meet their Consumer Duty obligations.
It said firstly, when they take out cover, “consumers have little understanding of any limitations of this cover, (for example) that travel insurance may not cover missed flight connections, or that home insurance only covers specific insured events”.
