Motor and building insurance complaints hit five-year high

Complaints about buildings, car and motorcycle insurance have reached a five-year high, according to new figures published by the Financial Ombudsman Service today.

In the first three months of this financial year (April-June 2023), the Financial Ombudsman received 3,869 complaints about car/motorcycle insurance alongside 1,776 buildings insurance cases.

By comparison, in the first three months of 2019/20 the Financial Ombudsman received 2,626 complaints about car and motorcycle insurance, and 1,275 complaints about buildings insurance.

This increase in insurance complaints appears to be caused by several factors. There has been a rise in insurers delaying in paying out on claims, while at the same time contractor availability has impacted on the speed of repairs, as has the ability to source materials.

Travel insurance complaints have also doubled in a year – increasing from 504 complaints in the first quarter of 2022/23 to 1,101 in the same quarter this year. That’s the highest Q1 figure for travel insurance complaints in more than a decade.

Abby Thomas, Chief Executive and Chief Ombudsman at the Financial Ombudsman Service said:

Whether it’s your car, your holiday or your home, having the right insurance is fundamental and should offer people the peace of mind that, when things go wrong, they’re protected.

Where these complaints are driven by insurers delaying paying out on claims that’s unacceptable. We expect insurers – as well as other businesses – to treat their customers fairly and in a timely manner.

If consumers don't feel they've been treated fairly by a financial business, they should contact our free, independent service and we'll investigate their complaint.

Rachel Lam, the Ombudsman Director responsible for insurance, said:

Following the pandemic, confidence around travel is growing again and with that a greater awareness of the need for insurance.

We need to ensure that alongside the growth in travel policy sales the industry continues to behave responsibly, and consumers feel satisfied with the service they are provided.

Alongside complaints about insurance, the other most complained about products this quarter were current accounts, credit cards and hire purchase (motor). Complaints about all these products have increased year-on-year.

Current accounts continue to be the most complained about product overall with complaints increasing by a third when compared to Q1 2022/23. This rise is due to fraud and scam complaints which also increased by a third in the same period. Complaints which were categorised as account closures made up just 5% of current account complaints.

Credit Cards are consistently the second most complained about product with 4,189 complaints this quarter compared to 2,730 cases in Q1 2019/20.

Complaints for Hire purchase (motor) are at their second highest level across all quarters since Q1 2019/20 with 3,678 complaints this quarter (Q1 2023/24). The only time that figure has been higher was in Q4 2022/23 when there were 4,414 complaints.

Fraud and scam complaints, across all financial products, have increased by almost 39%, to 6,094 complaints, when compared to Q1 2022/23 (4,392). The Financial Ombudsman continues to uphold almost half of these complaints in the consumers’ favour.

Around half (2,932) of these fraud and scam complaints relate to authorised push payments (APP) scams, many of which are covered by the standards set out by the voluntary Contingent Reimbursement Model (CRM) code, which some - but not all - banks have signed up to.

The CRM code provides additional protection, with a significantly higher uphold rate and consumers reimbursed unless there are exceptional circumstances. Where banks have not signed up to the code, consumers have less recourse for reimbursement.

Overall, the Ombudsman received 43,953 complaints this quarter, compared to 35,029 at the same time last year. It upheld 37% of the complaints it resolved, compared to 34% in the first quarter of 2022/23.

A breakdown of the number of complaints the Financial Ombudsman has received on the most complained about products.

The uphold rates for resolved complaints for the most complained about products are below:

Notes to editors

About the data

All the data referenced in the press release excludes complaints data against claims management companies.

The five-year high referred to in the press release is defined as the combined total number of new complaints about buildings insurance and car and motor insurance received in any single quarter since Q1 2018/19.

Hire purchase data for 2019/20 includes all hire purchase products. We changed our taxonomy for hire purchase from 2020/21 to separate out the various hire purchase products.

Current account closure complaints are those which are categorised as ‘account closures’ by those handling individual cases.

About the Financial Ombudsman Service

The Financial Ombudsman Service was set up by Parliament to resolve individual complaints between financial businesses and their customers on a fair and reasonable basis, as a free alternative to the courts. It can look into problems involving most types of money matters. It is committed to sharing insight and experience to encourage fairness and confidence in financial services.