1-minute guide to Insurance Claims

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Insurance Claims

In 2013 the UK insurance industry had a premium income of an eye watering $330 billionThis makes up almost 25% of total European premium incomeDespite these profits, faith in insurance companies is waningThe Financial Conduct Authority (FCA) received over 5 million complaints about insurance companies in 2014

Need to know

  • The PPI disaster is the most high profile mis-selling scandal of recent years
  • But PPI isn’t the only insurance product that has been mis-sold
  • Home insurance, car insurance, life insurance and many other types have been mis-sold
  • The classification that determines if a product has been mis-sold depends on its type
  • All financial firms have a duty of care to ensure their products are suitable for the customers they are being sold to but some fail to uphold it
  • When this duty of care is ignored mis-selling can occur

Reasons to complain

  • If the firm you purchased your insurance from failed to check you meet the criteria to claim
  • Your firm also failed to make sure you have a genuine need for the cover
  • For example if you are too old to ever be able to claim or alternatively you had a medical condition which would prevent you from being legitimately covered
  • If you were pressured into buying through being informed the cover was compulsory
  • Many firms have mis-sold life insurance with mortgage applications or loan protection insurance for unsecured loans in this manner
  • It is even possible to have been mis-sold insurance without even realising it, some banks have admitted to adding insurance on to their products without telling customers
  • If you think you are paying over the odds, be sure to check your documents and transactions for any unusual sums which could be hidden fees

How to complain

  • It doesn’t matter what type of insurance you are claiming against, the procedure is exactly the same for any type
  • First, compile as much information on the policy you are complaining about as possible
  • This includes the details of how you purchased your insurance policy and, if you can recall, what you were told by staff members at the time
  • Put all this information into a concise and coherent letter which clearly states why you believe you have been mis-sold your policy
  • Take your letter straight to the body who sold you your insurance policy, they will have up to 8 weeks to reply to your complaint
  • If they take longer than 8 weeks or you are unhappy with their reply then you are entitled to take your complaint to the Financial Ombudsmanwho will review your case

The inside track

  • It is easier to claim if you were mis-sold your policy in the last six years but not impossible otherwise
  • The Statute of Limitations states that banks don’t have to keep your records for more than six years, but you can still claim as there is no official cut off point.
  • In 2013 Swinton were fined £7.4 million for mis-selling car insurance
  • Similarly HomeServe were fined £30.6 million for mis-selling their insurance products
  • Both companies (and others) have set aside millions to compensate customers
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Sarah Willingham
Sarah Willingham is a serial entrepreneur, business investor and leading consumer expert. She has received a number of accolades for her contribution to business including The Sunday Times 500 Most Influential People in Britain 2016, The Times 35 Most Successful Women Under 35, Business Weekly’s Young Entrepreneur of the Year, Courvoisier Top 500 and an entry into the Who’s Who of British Business Leaders. She holds three business degrees including an MBA from Cranfield School of Management, where she is also an advisory board member.