Watchdog Which? urges regulator to crack down on some practices by insurers
Watchdog Which? urges regulator to crack down on some practices by insurers
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Which? is calling on the City regulator to clamp down on certain practices by insurance companies. The consumer watchdog has voiced concerns that some firms may not be fulfilling their obligations under the Financial Conduct Authority (FCA)’s Consumer Duty, which mandates firms to prioritise customer outcomes and take proactive action.
Which? highlighted that poor treatment from insurance companies can have a devastating impact on consumers, many of whom have already experienced traumatic events such as house fires or floods. A new policy report from Which?, titled 'Risky business: Consumer confusion around general insurance', stated: "Given low claims acceptance rates for some products, this suggests some consumers are receiving nasty shocks when their claims are rejected.".
The report identified three "common misconceptions" that could lead consumers to wrongly assume they are covered. Firstly, it said that when taking 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".
Secondly, the report noted that when an incident is beyond a consumer’s control, they often presume they will be covered. And thirdly, while consumers understand that negligence and wear and tear are factors that can limit insurance cover, there is sometimes little understanding of what might constitute negligence or wear and tear, it said.
