Which? is lodging a super-complaint with the City regulator, voicing concerns over « serious failings » in the home and travel insurance markets. The consumer watchdog is zeroing in on these two types of insurance due to their low claims acceptance rates and the significant impact on consumers when things go awry.
It revealed that some of the stories it has heard from consumers about their experiences have been « heartbreaking ». The super-complaint, directed at the Financial Conduct Authority, pertains to the markets as a whole, not specific firms. Over the past year, Which?’s « end the insurance rip-off » campaign has yielded research reports that the consumer group said expose poor customer experiences—from consumer confusion over what is covered by a policy to « frustrating and substandard treatment » when people claim.
The regulator has conducted thorough reviews of claims-handling in home and travel insurance, first in 2014 and more recently this summer.
Which? underscored the FCA’s statutory objective to secure an appropriate degree of protection for consumers. It stated that it is launching a super-complaint now « because consumers cannot afford to wait any longer ».
Which? explained that in addition to surveys and interviews, Financial Ombudsman Service (FOS) decisions and legal analyses have been analysed.
The super-complaint highlights three primary areas of concern – substandard claims handling, unsuitable sales practices, and what it alleges is inadequate implementation and enforcement of FCA regulations and other applicable legislation.
Which? said it has received testimonies from hundreds of individuals « who have been left to endure ordeals at the hands of their insurers ».
Under legal requirements, the regulator must respond to Which?’s super-complaint within 90 days.
Rocio Concha, Which? director of policy and advocacy, said: « Which? using its legal powers to submit a super-complaint is a major intervention – but we believe it is necessary as serious failings in home and travel insurance have been tolerated for too long by the insurance industry and its regulator.
« Our evidence that the home and travel insurance markets are not working well is overwhelming, and we have heard heartbreaking stories from people who have found the experience of dealing with an insurance company worse than the distressing life events that led to their claim.
« It’s time for the FCA to get a grip on the home and travel insurance markets and urgently intervene to make sure insurers up their game. This super-complaint should mark a turning point that leads to fundamental changes in how insurance companies treat their customers. »
Which? stated that the most recent FCA general insurance value measures data show that the claims approval rate for home (buildings) insurance stood at 63%, while for travel insurance (single-trip, standalone), it reached 80.4%.
Which? said it has received complaints from an insurance customer whose Egyptian holiday two years ago was cut short due to a technical fault with her flight just two hours after departure.
She was unable to continue with her holiday. Although her flights were reimbursed, she faced costs for accommodation and airport travel.
Her insurer, Axa, informed her that because her flight had departed, her holiday had technically commenced, and she was ineligible to make a claim. Which? stated that after raising the matter with Axa, the firm apologised, settled her claim completely, and provided compensation.
An Axa Partners spokesperson confirmed they apologised for the problems and « upon further review, we have settled her claim in full and offered compensation in recognition of the delays ».
In a separate case witnessed by Which?, a water pipe burst beneath a man’s property, but his insurer, Churchill, informed him he wasn’t covered for damage to the pipe itself. He was advised he would have required additional cover.
The customer believes such exclusions ought to be made far clearer to customers when purchasing policies, Which? stated.
The man informed Which? that Churchill only proposed to assist with redecoration expenses, but ultimately, he withdrew his claim with Churchill and covered decoration costs personally.
A Churchill spokesperson confirmed a plumber had « confirmed the leak was due to wear and tear of the pipe, which is typically excluded under home insurance policies ». The spokesperson said the man was advised that he could claim for the plumber’s investigation, damage caused by accessing the pipe, and any water damage caused by the leak but « we advised that the damage to the pipe itself would not be covered ».
The spokesperson said that if the customer is able to provide further documentation about the repairs to his property, « we will be happy to review the claim ».
A super-complaint is a formal grievance lodged by a consumer organisation on behalf of vast numbers of customers, when it believes their interests are being significantly damaged by market practices.
Only specific organisations possess the legal authority to submit super-complaints as consumer representatives.
Which?’s previous super-complaint was filed in 2016 regarding concerns about banks’ handling of authorised push payment (APP) fraud victims.
Whilst initially dismissed by the Payment Systems Regulator, laws were subsequently brought in to safeguard bank transfer fraud victims through mandatory compensation.
An FCA spokesperson said: « Insurance should provide peace of mind and fair value. That’s why we have been focused on raising standards, including banning the loyalty penalty, securing £200 million compensation for underpaid motor claims and investigating value in premium finance.
« We uncovered issues when we recently reviewed insurers’ home and travel claims handling. We’ll be holding them and their senior managers accountable for the changes needed. We’ll respond to Which? in due course. »
Which? said that home and travel insurance products are widely held by UK consumers, and hugely important for society and the economy.
In 2024, 32 million UK adults held contents insurance and 29 million held buildings insurance, whilst 15 million and 13 million UK adults held annual and single-trip travel insurance, respectively, it added.
A spokesperson for the Association of British Insurers (ABI) said: « Insurers take their responsibility to protect their customers incredibly seriously. As a crucial financial safety net, our members work hard to ensure their customers know the details of their policy cover and handle claims as quickly and efficiently as possible.
« In the first half of this year alone, insurers have paid out over £1.7 billion for more than 300,000 home insurance claims. Last year, travel insurers also paid out £472 million across more than 500,000 claims. We’re working closely with the regulator to ensure good outcomes for customers and will engage with Which? to understand the details of its concerns. »
