Out of pocket and in the dark: Three quarters of car insurance customers whose claims weren’t paid in full not told why, as firms could be falling short of new Consumer Duty standards

Three quarters (77%) of car insurance customers reported they were not given an explanation by their insurer for rejected, partially accepted or disputed claims, Which? research has found. 


Which? surveyed over 2,200 car insurance customers and over 1,500 home insurance customers who had made a claim within the last two years in November 2022. In March 2023, Which? also surveyed 804 travel insurance claimants who had made a claim within the last two years. 


When the consumer champion asked what the outcome of the claim was, one in seven (14%) of car insurance claimants reported that their claim was either partially accepted, rejected or in dispute. This was the case for more than a fifth (22%) of home insurance claimants and almost two in five (38%) of travel insurance claimants surveyed. 


Over half (56%) of home insurance claimants and more than four in 10 (43%) travel insurance claimants whose claim was not fully accepted said they did not receive an explanation as to why.


Not receiving an explanation for a rejected claim can lead to consumers feeling confused and angry, but it also makes it more difficult for them to challenge the decision with the firm or take a complaint to the Financial Ombudsman Service because of the limited information they have to present when making a complaint. 


The research comes as the regulator, the Financial Conduct Authority (FCA), is poised to introduce a new Consumer Duty, a set of higher and clearer standards of consumer protections, later this month. 


One of the outcomes financial firms will need to deliver under the Consumer Duty is in relation to ‘consumer understanding’, with any communications required to be easy to understand for the customer.


The FCA says: ‘Firms should ensure they support consumer understanding and deliver good outcomes throughout the claim journey, through timely and appropriate communications.’


However, the consumer champion is concerned that firms are falling short of this requirement – just weeks before new standards come into force. 


Which? is concerned that for customers whose claims are rebuffed or challenged by insurers, vagueness from firms is making the process needlessly difficult for those who are not tenacious or confident enough to pursue clarification around claims decisions. The FCA recently reviewed how insurers treat vulnerable customers and warned firms to up their game when it comes to handling claims.  


According to the FCA’s review, the number of rejected claims for home insurance reportedly rose by over half (57%) for home insurance and a quarter (24%) for car insurance between August and November 2022. 


Data from the regulator indicates that most complaints made to insurers (62%) are upheld in favour of the customer. However, just getting a complaint off the ground will be hampered if a claimant cannot detail where they and the insurer disagree. 


The consumer champion is calling on insurers to up their game ahead of the new Consumer Duty. The FCA must monitor firms’ performance and hand out tough penalties for those who fall below the required standards 


Anyone who feels they are being treated poorly by their insurer should consider switching. Using customer surveys and expert analysis, Which? has compiled guides on the best and worst car, home and travel insurers so that consumers can choose a policy that works for them with confidence. 


Sam Richardson, Deputy Editor of Which? Money, said: 


“No one wants to be in the position where they have to claim on their insurance – still less have that claim be turned down. But not getting an explanation for why a claim hasn’t been accepted in full isn’t just frustrating – it puts you, the consumer, at a serious disadvantage.


“Claimants who don’t get the full picture from their insurers will struggle to take their claim to the Ombudsman, as they don’t have much information to prove where they and their insurer disagree. 


“Insurers need to up their game and let claimants know precisely why their claims are not being accepted in full – and as part of its new Consumer Duty, the FCA should clamp down on firms that fall below the required standards.” 




Notes to Editors 


In November 2022 Dynata, on behalf of Which?, surveyed  2,223 car insurance customers and 1,517 home insurance claimants  – all had claimed in the past two years. In March 2023, Dynata, on behalf of Which?, surveyed 804 travel insurance claimants. While the  majority had their claims fully paid, some  were paid only in part, outright rejected, or were in dispute.


Right of replies


An Association of British Insurers spokesperson said: “Insurance is there to protect you when things go wrong and our data shows that the vast majority of claims are accepted. However, we can appreciate that it is frustrating when a claim is declined and knowing why is crucial. Our members are always looking at ways to improve communication with customers and know that sharing information in a clear, accessible and timely way is vital.


“If you’re unhappy with how your claim has been handled and wish to make a complaint, you should follow your insurer’s complaints process in the first instance. If you’re unsatisfied with the process, you can then contact the Financial Ombudsman Service. Insurers will always aim to deal with complaints as swiftly as possible and will work with the FOS to understand where any learnings can be made.”


Table of claims acceptance*


Car insurance Home insurance Travel insurance
My claim was accepted and I have received a settlement/my settlement is on its way 79% 74% 57%
My claim was partially accepted and I have received a settlement/my settlement is on its way 10% 15% 26%
My claim was rejected 2% 5% 8%
My claim is in dispute 2% 2% 4%
My claim is still in progress 7% 5% 6%


*Percentages are rounded, so won’t add up to 100% in each case.







About Which? 

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.

The information in this press release is for editorial use by journalists and media outlets only. Any business seeking to reproduce information in this release should contact the Which? Endorsement Scheme team at endorsementscheme@which.co.uk.


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