Harder than ever to get disasters paid by insurance

Insurers are notorious for using small print and hidden clauses to wriggle out of payouts, but it’s now become even harder for people to get a claim paid, according to new research.

The revelations come as snow and freezing weather leaves a quarter more people having to contact providers with incidents of boiler breakdowns and burst pipes.

Nine insurance brokers in 10 said fewer claims were being paid, while two thirds said they had to fight harder to get a payout, in a survey conducted by the British Insurance Brokers Association (BIBA).

In a report last week, the Financial Ombudsman Service (FOS) also said that insurers are digging their heels in harder in an effort to save money.

The ombudsman has seen a jump of 10% in the number of complaints it receives about insurance over the past year and said the cases are becoming harder to resolve. Many of the complaints relate to car insurance and the way claims are handled.

The FOS said: “We have continued to see tension between consumers’ expectations and insurers’ attempts to minimise their costs… This has made cases harder to resolve, with many disputes being escalated to the final stage of our complaints process – a final decision by an ombudsman.”

Pursue what is rightfully yours

In one case uncovered by BIBA, a claim worth £35,000 for a stolen car was initially rejected, the insurer begrudgingly paid out after a broker argued the technicalities.

The example highlights the importance of disputing a rejection if you believe you’re entitled to a payout.

Initially complain to your insurer, but if it refuses to budge, you can take the case to the FOS. The ombudsman will independently assess details of the case and has the power to force an insurer to honour a claim if it decides in your favour.

Insurance expert at moneysupermarket.com, Kevin Pratt, said: “It’s important for consumers to pursue what is rightfully theirs. There are two parts to this: Getting them to pay out and to pay the full amount.

“Customers must be honest when they take out a policy and answer all questions to the best of their knowledge, that way when it comes to making a claim they will be on solid ground and insurers can’t rifle through background information and find reasons to say no.”

Insurers, however, denied accusations that it was becoming harder to get a payout.

Nick Starling, director of general insurance at the Association of British Insurers, said: “We do not accept any suggestion that it is getting more difficult for genuine claimants to be paid and we have seen no evidence pointing to this.

“The priority of insurers is to pay all genuine claims as quickly and efficiently as possible. Every day insurers pay out around £28 million to help get household and motor insurance customers back on their feet when the worst happens... Insurers will look to properly investigate suspected cases of fraud, but not at the expense of genuine claimants.”