Insurers hanging tough on pay-outs

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Insurers are using ­“spurious” reasons buried in small print to wriggle out of people’s claims, ­research by consumer campaigners has suggested.

An investigation by Which? surveyed 4,800 members with car or home insurance and looked at policies commonly used by insurers.

More than one in ten (12 per cent) of consumers who made a home insurance claim, and one in 20 (5 per cent) who made a car insurance claim, had it fully or partly rejected.

Home insurance policies looked at by the consumer group included a requirement for the property to be kept in good condition, but none was found to explain what this meant.

In one case, a consumer told the study that their insurer refused a claim because they had not re­grouted their bathroom tiles every year.

Which? said it saw “many cases” where car insurers settled claims 50/50 even when the driver believed they had strong evidence that a car accident was not their fault, meaning they faced paying an excess and the possibility of losing their no-claims bonus.

Which? executive director Richard Lloyd said: “We found examples of home insurance claims being rejected for some spurious reasons, and consumers unhappy with way their claim was handled. While most claims are accepted and paid out in full, a ­minority are not, and if your claim is rejected it could prove costly.”

New regulator the Financial Conduct Authority announced a review into the insurance market earlier this year. The watchdog now plans to investigate insurance “add-ons” which are sold alongside big purchases such as holidays, cars and gadgets to find out if people are getting value for money.

A spokesman for the Association of British Insurers said: “Insurers continually review their policy wordings and claims procedures so that the expectations of customers are met.”