There’s been a “concerning” rise in the number of complaints about home and business building insurance, with figures reaching a 10-year high, the financial ombudsman has said.
More than 2,000 complaints about buildings insurance were lodged with the Financial Ombudsman Service (FOS) in the first three months of the year – a 13% rise from a year earlier.
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Most of the complaints were about applications being turned down, followed by delays in processing claims, and then the values of claims, with 41% of cases upheld by the FOS.
It’s “concerning to see this significant change in the number of unhappy consumers”, said FOS director Sean Hamilton.
The service was set up as an independent service to resolve disputes between consumers and financial services companies.
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Underpinning the rise is an increase in complaints relating claims for flood or storm damage, which are often “complex and expensive”, the FOS said.
Also a factor is insurers struggling to find materials and contractors to carry out works due to supply chain issues. This, in turn, has increased costs, making claims “substantially” more expensive, the ombudsman said.
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Issues have arisen with alternative accommodation, with a number of customers complaining about having to repeatedly move between hotels at short notice, or insurers saying no alternatives were available at all.
More parties involved increased chance of complaint being upheld
Poor communication was a common theme, especially in cases involving third parties, like loss adjustors and surveyors.
Overall, the vast majority (80%) of complaints involved such third-party agents, according to a sample of final decisions made by the FOS.
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The more people involved in an insurance claim, the more likely it was that a complaint was upheld by the Ombudsman’s service, it concluded, as it has become challenging for consumers to promptly receive information.
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“We’ve heard from consumers who find themselves locked in a confusing chain of communication with no one party taking responsibility, and significant delays in settlement,” Mr Hamilton said.
“Firms need to ensure they’re meeting their regulatory obligations by clearly communicating with policyholders, engaging throughout the process and settling claims without unnecessary delays.”
