Don’t cheat the bride: Which? reports major wedding insurance company for handling of coronavirus cancellation claims

Which? has reported a leading insurance company – UK General Insurance – to the financial regulator after a bride-to-be helped expose the dubious tactics it was using to deny claims for coronavirus wedding cancellations.

UK General Insurance is an insurance distributor backed by insurer Great Lakes, and underwrites wedding insurance for Debenhams and Dreamsavers. It also trades directly as WeddingPlan. As recently as late March, it advised customers individually and via WeddingPlan’s website that its policies would cover coronavirus-related cancellations or venue closures. However, many couples who bought wedding insurance policies with the firm have since had their claims rejected.

Lidia Szmid and Adam Burton purchased a wedding insurance policy from WeddingPlan in March after receiving written confirmation that they would be covered if the government closed the venue due to coronavirus.

However, when their claim of almost £10,000 was rejected in April, because the cancellation was related to government regulation, Lidia refused to accept the firm’s reason and submitted a Subject Access Request to see what information it held on her. Lidia and Adam only had their claim paid after a lengthy battle with the insurance company.

While WeddingPlan shared online advice in March that it would cover cancellations caused by the “outbreak of a contagious and infectious disease” or venue closures by a “relevant authority”, it failed to disclose ambiguous clauses within its terms and conditions that claims would not be covered if related to “government regulations or acts” or “prohibitive regulations”.

However, neither term was clearly defined in the small print, nor was it clear if the government could be the “relevant authority”.

These clauses were used to reject claims that were associated with the government lockdown. In April an employee email related to Lidia’s claim confirms that “Insurers have since [confirming Lidia’s cover] taken a stance that the exclusion applies.”

Lidia’s Subject Access Request produced a series of internal emails which revealed UK General Insurance employees admitting guidance given to customers was “contradictory to say the least” and would “undoubtedly” lead to complaints to the Financial Ombudsman Service (FOS).

In one exchange, a UK General Insurance employee suggests Lidia may have been attempting to commit insurance fraud – even though she had been completely clear and honest about her circumstances when she purchased the policy.

Lidia, and other customers who’d bought insurance more recently, were accused of having purchased cover anticipating a likely claim. In its rejection letter, UK General’s claims handlers argued they were ‘satisfied’ of this because on 3 March, the government had published a ‘Coronavirus Action Plan’. In truth, this document gives no information about the likelihood of a lockdown happening and says nothing specifically about weddings.

The emails also reveal how confused employees struggled to justify the firm’s position to devastated customers, with one saying they did “not know what to tell” people accusing the firm of “disgusting” behaviour and of “changing the goalposts”.

In contrast to the experience of WeddingPlan customers, rival firm John Lewis, underwritten by RSA, and with near-identical clauses, determined covid-related claims were covered and said it would honour claims where customers had not received a refund from the venue.

Which? Money understands that RSA’s decision to accept claims was influenced by recent guidance issued by the FOS to businesses. The guidance recommends that wedding insurers consider whether government acts or regulations are defined in their policies, and whether it is clear how they would relate to an epidemic.

Which? has spoken to seven couples battling to have their claim accepted by UK General Insurance. To date, only Lidia and Adam have managed to recover their money.

By issuing misleading advice and relying on ambiguous terms, Which? believes UK General Insurance and Great Lakes acted in bad faith. The consumer champion has reported UK General Insurance to the Financial Conduct Authority to investigate.

Which? is also calling on UK General Insurance to change its unfair position on coronavirus-related cancellations to bring an end to the ordeal endured by so many couples who have already experienced the heartache of postponing their wedding day.

Jenny Ross, Which? Money Editor, said:

“The persistence of one bride who refused to be given the brush-off by a big insurance company produced a damning dossier of evidence exposing how the firm exploited unclear terms and conditions to avoid paying out on claims.

“Our research suggests a pattern of UK General Insurance acting in bad faith to turn down claims, which is why we believe the financial regulator must investigate and take tough action if the firm is found to have broken the rules.”

Right of reply

UK General Insurance told Which? that it is a distributor – not the insurer – and doesn’t have the final say on whether or not a claim is paid. A spokesperson said the decision whether or not to pay claims rests with the insurer, in this case Great Lakes, not the distributor, UK General.

UK General and Great Lakes have provided the joint statement below: “We’d like to express our sympathy to those individuals and their families who have been affected by this unprecedented pandemic, including those whose weddings have been impacted. We acknowledge and regret the lack of clarity in some of the FAQs Relating to Coronavirus (COVID19) posted on our websites, but we have subsequently thoroughly reviewed the coverage position in respect of claims for wedding cancellations arising from the COVID-19 pandemic, and have republished FAQs and will continue to monitor these as the situation develops.

“We are committed to treating all our customers fairly, while also ensuring that claims are handled properly in line with the terms and conditions of the insurance policy.

“We are monitoring the UK Government’s Health Protection Regulations 2020 (as amended) and the restrictions these may impose on customers’ scheduled weddings. In addition, we have adapted our approach to assessing claims to reflect additional Coronavirus guidance which has been published by the Financial Conduct Authority and the Financial Ombudsman Service and we are regularly reviewing how our wedding insurance policies should respond in the current external environment.

“We are always looking to improve the experience our customers receive, and we appreciate feedback such as the comments in this article, which we will learn from.”

Notes to eds

Excerpts from emails

UK General Insurance employee [25th April]: “I expect we are going to get a lot of these, who is the best person to pick these up?”

UK General Insurance employee [27th April]: “We are getting lots of queries back from customers demanding call backs from a senior manager saying, you are changing the goal posts, this isn’t what you told me, this is disgusting, how can you tell me one thing and now another, I honestly do not know what to tell these customers.”

UK General Insurance employee [27th April]: “Hi All, Whilst I appreciate these aren’t great, the client has purchased this cover in the knowledge they would be making a claim and therefore could argue that is an attempt at insurance fraud. The message given to all clients were admittedly contradictory to say the least but they were correct in the knowledge we had at the time and therefore as this has changed over a short period time the message finally sent as part of the declining of claims is the one we need to stand by and it will undoubtedly end in the FOS making decisions supporting us or not giving each individuals circumstances and compliant. Either way it’s not ideal but we are where we are unfortunately.”

UK General Insurance employee [27th April]: “It looks as though the policy was incepted at 8.23pm and the email exchanges were earlier in the day at 10.35 am. This is a difficult one as they [Ms Szmid] were asking the specific question that ultimately related to their circumstances, and were given a clear answer. Insurers have since taken a stance that the exclusion applies.”

UK General Insurance employee [6th May]: “I will have a chat with [redacted] and come back to you on this, as I am guessing we could potentially be getting quite a few requests on WeddingPlan.”

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