Home insurers named and shamed for poor customer service

Which? has named the worst culprits among home insurance companies for unjustified declined and delayed claims and paying out less than they should in 2022-23.

The worst offenders

Starting with the worst offenders, they are:

• Ageas
• Fairmead
• Royal & Sun Alliance
• UK Insurance
• AXA UK
• QIC Europe
• LV
• Zurich
• AA Underwriting
• HDI Global Speciality
• Accredited Insurance (Europe)

Which? submitted a freedom of information request to the Financial Ombudsman Service (FOS).

The data provided identified the firms above as the most likely to be found at fault in cases involving declined claims, delays and disputed payout offers.

Customers are able to go to the FOS for help if they can’t reach agreement with their insurer.

Ageas customers struggle to get what they’re owed

The FOS criticised Ageas in seven out of ten (71%) of delayed building insurance cases and six out of ten (61%) cases about payout offers.

Vulnerable customers being let down

Firms are expected to have processes in place to support vulnerable customers, but Which? is concerned home insurers’ treatment of people in this situation is severely lacking.

The consumer champion cited the example of Marie Hooley who faced an ordeal to receive money she was due from her insurer Homeprotect, after a house fire made her home uninhabitable.

Marie’s husband died shortly after the fire leaving her vulnerable due to both the trauma of the fire and bereavement.

Despite submitting invoices for repair work in January this year, Marie was still waiting for the money in September – leaving her £6,300 out of pocket.

Homeprotect says it has now paid everything it owes to Marie and it is reviewing its procedures to make sure the same thing doesn’t happen in the future.

Other worrying findings

• Between April and June, complaints to the FOS about buildings insurance hit the highest level in five years.
• 40% of claims made to the FOS were upheld between April and June, compared to 31% last year.
• Standalone buildings and contents cover are among the top five of 34 products least likely to pay out – combined cover is the sixth least likely.
• Just 68% of standalone buildings insurance claims were accepted in 2022. This figure was only slightly better for combined home insurance policies at 76%. In comparison, 99% of car insurance claims were accepted.

A concerning picture

Rocio Concha from Which? said:

“Our investigation paints a concerning picture of the home insurance market, which is clearly not providing value for money for many customers.”

A small proportion of customers

The insurers who responded to Which? said the number of people who go to the FOS represent a very small proportion of their total customers and insisted they generally have high levels of satisfaction.

Some also pointed out that volatile weather and wider issues in the economy have created “exceptional strain” over the past year.