OPINION: FCA handed 170,000-strong petition to fix insurance failings

Originally published in Insurance Post 14 May 2025. Permission to publish all opinion pieces authored by Rocio Concha, sought and granted on 5 March 2025.

Because insurance customers only truly find out how good their policy is when they need to make a claim, it is worth taking notice of instances where things go wrong. Unfortunately, these aren’t difficult to find.

A Facebook group called Claims Guardians is a dedicated forum for home insurance customers who’ve endured nightmare ordeals when they’ve needed to make a claim. The group has nearly 300 members and was set up by Claire Massey who continues to endure an ordeal with her insurer after a fire at her house in Stoke-on-Trent in February 2023. 

When Which? researchers explored the issue of insurance claims handling, we found widespread examples of poor practice. Nearly half (48%) of insurance customers, covering home, motor, travel and pet cover, encountered at least one issue with how their claim was handled. These ranged from the administratively frustrating (being asked multiple times to resubmit important documents as evidence) to the bewildering (having little idea who’s accountable for what when third party claims handlers got involved).

If this were the only issue of poor practice we’ve uncovered in the insurance industry, we might leave it there. It is far from it. At almost every turn, we’ve found areas of concern over how insurers treat their customers. We are particularly concerned about home insurance claims, where, according to the most recent Financial Conduct Authority data, just 63 per cent of claims were accepted by insurers. For car insurance, the corresponding figure is 99 per cent. 

Even the process of buying insurance in the first place can become an ordeal. The act of taking out a policy is strewn with misconceptions about the extent of cover, many of which could come back to bite customers should they need to make a claim. When we asked insurance customers, most believed that the majority of travel insurance policies would provide cover for passengers if they missed a connecting flight through no fault of their own. Yet, in many instances that isn’t the case. And while consumers are of course not absolved completely of responsibility for the products they buy, we think insurers need to do a much better job of making the extent - and, crucially, limitations - of cover much clearer at the outset and, where possible, addressing gaps in their policy cover where these are persistently leading to rejected claims.

I could go on. The issue of premium finance has persisted for some time now, penalising motor and home insurance customers who simply cannot afford to stump up the money to pay for cover all in one go annually. Which? has repeatedly raised the alarm over some firms charging rates of interest on monthly payments that are comparable to pricier credit card lenders, despite the risk to insurers being much less. (Non-payment can lead to termination of the policy, not somebody running off after racking up a hefty credit card debt). 

It is for these reasons that Which? has today decided that enough is enough. We have gone to the FCA’s offices and handed in a petition, signed by over 170,000 people, calling on the regulator to get a stronger grip of a market that isn’t working as intended. 

Claims processes that end up being more traumatic than the original event. Many crucial limitations of cover that consumers do not understand, with some that are potentially unfair. Hefty premiums that don’t match the quality of service. These should all become things of the past. 

Insurance customers are tired of endless regulatory reviews and a softly-softly approach that lacks the necessary bite to deter poor behaviour. The FCA should take the opportunity, starting with its thematic review of claims handling, to send a clear message to insurers that poor behaviour will no longer be tolerated and that enforcement action will follow for the worst performers. 

Only then will we truly end the insurance rip-off.