One in three (30%) home insurance customers who have made at least one claim in the last two years are being forced to chase their provider in order to progress their claim amid concerns over poor customer service standards, according to Which? research.
The consumer champion also found three in 10 (29%) customers felt that their claim was dealt with more slowly than they thought it would be.
The findings come as Which? reveals the results of its largest ever home insurance analysis, which includes the views of more than 1,700 customers and fine print analysis of 78 policies from 37 providers.
NFU Mutual topped the table and was named a Which? Recommended Provider after achieving a customer score of 81 per cent, substantially higher than its nearest rivals. Customers were impressed with how well the provider dealt with complaints. Quotes are not available online or via comparison sites, however, and are sold solely by phone through a network of local agencies.
Direct Line and LV also fared well in the consumer champion’s analysis, achieving customer scores of 75 per cent and 74 per cent respectively. Both did well on perceived expensiveness – customers were asked whether they felt their insurer was more expensive compared with other providers.
A quarter (26%) of Direct Line customers believed they were paying less (compared with one in eight (12%) who felt it was more expensive). One in three (28%) of LV customers believed they were paying less compared with less than one in 10 (7%) who thought they were paying more.
Just three per cent of Barclays Bank customers, four per cent of Halifax customers and seven per cent of AA customers thought they were paying less for their policies.
Of all survey respondents, two in 10 (22%) believed their insurer priced its cover less expensively than other providers. However, one in 10 (11%) believed their insurer was more expensive compared to other providers
According to the latest figures from the Association of British Insurers released last month, the average cost of combined home insurance was £300 in 2022 – the cheapest since the trade body began tracking price data. However, it anticipates that factors including rising claims costs could ‘put pressure’ on and increase premiums this year.
For customers who think they are not getting a good deal, there are several actions they can take to ensure they are paying a fair amount, including taking the time to research different deals before renewing, haggling and calculating how much cover is actually required.
The consumer champion’s survey also found that the most common claim among customers was for accidental damage (19%). However, seven in 10 (72%) buildings insurance policies Which? analysed make full accidental damage an optional extra or do not include it, while it comes as standard in only one in three (29%) contents insurance policies. Some policies offer partial accidental damage cover as standard – for example to windows and sanitary ware or home entertainment systems.
Other commonly made customer claims included escape of water from an internal source (for example burst pipes) and damage caused by high winds, heavy rain or hail – both 18 per cent. The most commonly rejected claim was damage caused by high winds, heavy rain or hail – with one in 10 (9%) turned down.
The results come after the Financial Conduct Authority released figures which found that in late 2021, only three quarters (77%) of claims made on combined (buildings and contents) home insurance policies were accepted. By comparison, virtually all (99%) of motor insurance claims were accepted.
The FCA will shortly introduce a new Consumer Duty which will require businesses to put their customers’ needs first. This should mean consumers receive good customer service and lead to a reduction in upheld complaints about, among other things, levels of service. Firms who are already in a position to implement the Duty should not wait until the deadline of 31 July this year to introduce changes. Once the Duty comes into effect, the regulator must take swift action against firms who fail to meet the required standards.
Sam Richardson, Deputy Which? Money Editor, said:
“Customer service isn’t just a ‘nice to have’ – when something goes wrong with your home you need your insurer to step up and help get it fixed quickly
“Insurance customers who make a claim shouldn’t have to chase their provider to get a response.
“The regulator’s new Consumer Duty, which comes into effect in July, aims to ensure firms provide customers with the support they need, when they need it. The FCA should not hesitate to take swift action against providers that fall below the required standards.”
Notes to Editors
Which? conducted a survey with a nationally representative sample of 1,517 members of the general public and 566 customers from the Which? Connect Panel, both conducted in December 2022. Provider customer scores are based on answers from 1,718 participants who responded to the customer score questions.
Advice on how to find a good deal
- Don’t just renew
It’s age-old consumer advice, but at a time of soaring costs across the board, customers shouldn’t just automatically renew a policy without taking the time to check that it’s most suited to them. Run quotes on comparison sites to see what else is available on the market.
Taking the time to research other deals on the market will help customers that attempt to haggle with their current provider. Citing other, more competitive deals for similar levels of cover could help customers to secure money off with their provider when it comes to renewing.
- Calculate how much cover you actually need
Find out the rebuild price of the property (this will be lower than the value). The Association of British Insurers provides a free-to-use calculator to help estimate it. Working out the overall value of contents is also helpful to do. Which?’s contents insurance calculator is a handy tool for this.
- Set the right excess
One way to reduce the price of insurance is to increase the voluntary excess. However, this is a compromise and will effectively reduce the overall amount of cover. When choosing an excess, consider how much of a claim you could comfortably pay off yourself.
- Pay annually, not monthly
Most insurers charge interest on monthly payments, so it could work out cheaper to pay for the whole year in one go if you can afford it.
Which? is the UK’s consumer champion, here to make life simpler, fairer and safer for everyone. Our research gets to the heart of consumer issues, our advice is impartial, and our rigorous product tests lead to expert recommendations. We’re the independent consumer voice that influences politicians and lawmakers, investigates, holds businesses to account and makes change happen. As an organisation we’re not for profit and all for making consumers more powerful.
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