Consumer body Which? has asked the City regularly to investigate home and travel insurance companies over a variety of concerns
Campaigners have lodged a “super complaint” because of “serious failings” with home and travel insurers.
Consumer group Which? was prompted to act after evidence of the widespread rejection of customer claims, along with poor service when things go wrong.
Which? is among those with the statutory power to submit super complaints on behalf of large numbers of customers. City regulator the Financial Conduct Authority now has 90 days to respond.
FCA data shows travel insurers reject nearly one in five claims made to them, while for home insurance the figure is more than a third.
Rocio Concha, Which? director of policy and advocacy, said: “Which? using its legal powers to submit a super-complaint is a major intervention – but we believe it is necessary as serious failings in home and travel insurance have been tolerated for too long by the insurance industry and its regulator.
“Our evidence that the home and travel insurance markets are not working well is overwhelming and we have heard heartbreaking stories from people who have found the experience of dealing with an insurance company worse than the distressing life events that led to their claim.
“It’s time for the FCA to get a grip on the home and travel insurance markets and urgently intervene to make sure insurers up their game. This super-complaint should mark a turning point that leads to fundamental changes in how insurance companies treat their customers.”
Which? has campaigned to “End the Insurance Rip-Off” and produced a series of reports exposing what it says is poor customer dealings, from widespread consumer confusion over what is covered by a policy, to frustrating and substandard treatment when people need to make a claim.
A spokesperson for trade body the Association of British Insurers said: “Insurers take their responsibility to protect their customers incredibly seriously. As a crucial financial safety net, our members work hard to ensure their customers know the details of their policy cover and handle claims as quickly and efficiently as possible. In the first half of this year alone, insurers have paid out over £1.7billion for more than 300,000 home insurance claims.
“Last year, travel insurers also paid out £472 million across more than 500,000 claims. We’re working closely with the regulator to ensure good outcomes for customers and will engage with Which? to understand the details of its concerns.”