Thousands of insurance customers owed compensation after claim issues – are you one of them?

THOUSANDS of customers who claimed on their car and home insurance last year could be owed compensation.

A review by the regulator found insurance companies had underpaid a large number of customers and has told them to "put right these wrongs".

Even where the claim was paid, customers could be in line for a payout.

It comes after the Financial Conduct Authority (FCA) noticed a rise in the number of customers complaining about their car and home insurance claims.

The watchdog found some insurers were undervaluing cars which were written off, and paying out less than they should.

It also uncovered a large number of cases where customers had been forced to wait and unreasonably long time before their claim was resolved.

The watchdog also warned insurers to get their acts together when dealing with struggling customers.

In the first six months of last year customers who complained were paid an average £172 compensation.

By the second half of the year, the average payout had fallen to £94 per person.

Sheldon Mills, consumer director at the FCA, said the regulator would "ensure" customers would get the compensation they were owed. 

"Timely and fair claims handling is especially vital during the cost of living squeeze," he said. 

It comes just days after Direct Line admitted it underpaid some customers.

The insurer is now reviewing all car write-off claims settled between September 1 2017, and August 17 2022.

The company, which has five million customers, has promised to contact any customer with car insurance who received an unfair settlement during this period.

Affected customers will receive compensation plus interest but the firm hasn't confirmed when this will be paid.

Car insurance complaints rise

The number of rejected car and home insurance claims soared last year, the FCA said.

Rejected claims on home insurance rocketed by 57% between August and November 2022 while failed motor insurance claims were up 24%.

The regulator urged customers unhappy with how their claim is handled to contact their insurance company to complain.

They can also raise a complaint with the Financial Ombudsman Service if they are not satisfied with the firm's response. 

We've explained how to do both below.

How do you complain about insurance claims?

Insurers are required to have a written complaints process that tells helps customers how to make a complaint.

You should be able to find the information on their website but if you don't, ask them to send it to you.