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How to play the insurance claims game
A new diary project has revealed the impact of COVID-19 on insurance and the struggles of policy holders to get their money back.
Between last November and July, we invited Which? members to keep diaries of any insurance claims they made and 95 people responded.
Overall, insurers pay claims fairly reliably, with most customers satisfied with how they're treated. But over the past several months - under the shadow of COVID-19 - it's been far from business as usual.
While some diarists gave glowing accounts of how their insurers bared up, others vividly portrayed being stuck in communications limbo, being shunted haplessly between different companies, battling errors and warring with words over T&Cs.
Here, Which? shares their accounts, how tenacity and resourcefulness can pay off when navigating claims, plus five tips to keep your own claim running smoothly.
Claims and the impact of coronavirus
The 95 diaries we analysed reflect a unique period - the unprecedented impact of coronavirus on the insurance industry and its customers.
Some 80 of these journals were started well after the beginning of March. Of these, more than half were about travel insurance claims. And more than four in 10 of all the diarised claims were directly linked to COVID-19.
In March, the Association of British Insurers announced that travel insurers were braced for 400,000 coronavirus-related claims - which is markedly higher than any previous year's worth of claims for cancellation and disruption.
And, as claimants discovered, lockdown conditions placed severe strain on car and home insurers, too.
At the time of writing, most of the claims described in the diaries had yet to be fully resolved. At least 10 had become outright disputes.
Insurers came off positively in around a quarter of cases - with respondents reporting 'pleasant surprise', and 'quickly and efficiently' handled claims. But around a third of diaries painted a negative picture. The remainder fell somewhere in the middle.
- Find out more: how to get coronavirus-proof travel insurance
Grinding to a halt
Stephen Kramer - whose diary had spanned an epic 149 days when we analysed the journals - claimed with LV after a car crashed into his home.
He was initially pleased with the insurer's attentive response. But several delays meant that repairs hadn't been completed by late March, when lockdown brought things to a halt. In April, he'd detected damp coming through his bathroom wall, caused by the crash.
By late May, while LV's claims managers were awaiting estimates from repairers, he was having to make some emergency repairs himself.
When we contacted him in mid-July, he was still waiting on updates - while getting by without use of an upstairs bathroom, a damaged septic tank and sightings of trespassers trying to enter the property through the damaged garden wall.
When we later contacted LV, it confirmed the work is now back on track and has offered Stephen £300 in compensation.
- Find out more: how to make a home insurance claim
Is anybody listening?
Other diarists reported similarly interminable intervals of insurer silence.
This was most true of travel insurers, which often appeared overwhelmed by the pandemic.
'It was a bit u201chands offu201d', reflected one diarist on filing their claim online, 'leaving me wondering if they had got my claim and would actually be processing it'.
Following weeks of no progress on his claim, a Nationwide Building Society customer lamented, 'I'm very angry and frustrated by the wall of silence from the insurer', before putting in a complaint. His claim was paid shortly afterwards, and he also received an apology and £250 in compensation.
A diarist in a similar position with AXA (in this case six weeks had elapsed since he'd last been given an update on his claim), took to social media to get the insurer's attention.
The strategy worked almost immediately, but he then learned that the insurer had made several mistaken assumptions about his reasons for claiming.
- Find out more: how to make a car insurance claim
Arguing your case
Another AXA customer, Vera Grant, had to debate the insurer's T&Cs after it declined her cancellation claim - although she ultimately succeeded in making it see sense.
After having to cancel her holiday in March, she claimed for the lost deposit on her holiday cottage.
A month later, AXA rejected her claim on the grounds that she'd cancelled the holiday prematurely. It claimed the cancellation needed to be no earlier than 28 days before the planned trip.
Convinced her policy's wording did cover her, Vera spent weeks getting AXA to explain its reasoning. She eventually learned that the claim had been assessed as if she were travelling overseas and cancelled because of changes in advice from the Foreign & Commonwealth Office.
But, as she'd stated in her initial claim, her holiday cottage was actually in the UK.
Emailing AXA, she pointed out that it also seemed to have overlooked a provision in the policy wording covering cancellation due to 'an infectious disease meaning you cannot use your booked accommodation'.
Furthermore, customers were guided in the wording to cancel bookings as soon as they knew it would be necessary.
AXA reconsidered Vera's claim in June and has now paid it.
Passing the buck
Insurers rarely operate in isolation, so aren't necessarily responsible for holding things up.
Diarists in the midst of travel insurance claims repeatedly reported being stuck between the insurer and other firms trying to shift liability - most typically airlines, tour operators and banks.
Roughly a quarter of the travel insurance claimants ran into issues establishing which company should reimburse their losses - and which to approach when.
Playing middleman between various companies - each seemingly reluctant to pay up - soured some of our diarists towards all parties involved. 'I feel both [companies] are using the other as a method of not honouring my claim', one diarist remarked.
Because of government advice in March, Stephen Cohen had to cut short his trip to Malaysia and Japan.
Since then, he'd been in an agonisingly slow process pursuing costs for his unused return flight. On the advice of his insurer AXA, he was trying to get his bank to use chargeback to recover the £226 he was owed from the airline.
But the airline - which wouldn't offer him a cash refund - had also remained unresponsive to the bank.
When we spoke to Stephen in July, it had until later in the month to contest the chargeback. If it didn't do so, the bank would recover his money for him. Were the airline to dispute it, AXA would instead pay him the amount.
In the meantime, he was left out of pocket. Stephen told us that while he was finding the process somewhat of a 'farce', he'd been generally impressed with how supportive the insurer was being - although he found its claims process 'tedious'.
AXA added it had experienced a surge in travel claims 10 times bigger than the travel industry's last 'benchmark' event - the 2010 Icelandic ash cloud. It told us: 'We were all hands on deck. To simplify things for customers, we adopted a pragmatic approach to claims validation. We're constantly adapting our strategy to protect customers.'
- Find out more: make a chargeback or Section 75 claim using our free tool
Five tips on surviving your claim experience
While not all claims go smoothly, there are steps you can take to improve your chances of success:
- Contact your insurer directly for advice before claiming. Some assume their claims procedures are obvious, when they aren't. Insurers can also take issue if they feel they've been notified too late.
- Keep notes: claims can be disjointed process involving multiple parties, so it helps to keep detailed records of events and interactions with companies.
- Be prepared to chase. No one enjoys chasing, but around a fifth of our diarists found themselves doing it.
- Insurers can make mistakes, especially when under pressure. If a decision doesn't seem to be rooted in the insurer's T&Cs, challenge it. In your policy document, look for the specific cover, general conditions and exclusions, and the claims procedure sections.
- Whatever happens, don't give up. Whether it's battling through extended hold times, submitting and resubmitting documents, or disputing how your claim has been assessed - for many people, persistence has paid off.
How does your insurer compare?
These 95 diaries, while revealing, don't tell us which insurers are the best and worst when it comes for claiming.
This is why when we annually rate car and home insurance companies we survey thousands of customers who have made a recent claim.
With our claims satisfaction tables, you can go further and see how these insurers were rated specifically for their claims handling.
See how 24 car insurance brands and 19 home insurance brands compared when their claims service was put under the microscope.
- The full version of this investigation originally appeared in the September edition of Which? Money magazine.
