Frustrated customers who have suffered poor service are winning more compensation from insurance companies with the help of the Financial Ombudsman.
Around 20,000 pay outs were won for ‘distress and inconvenience’ last year – about 7.5% up on the previous year.
Customers have mainly win amounts of less than £300 and rarely for more than £1,000.
The ombudsman does not punish firms for making mistakes or giving poor service unless they persistently fail to satisfy customers.
Compensation amounts are not released, but the ombudsman does reveal anonymous information about cases that were investigated, for example:
Hire car delay
A motorist made a claim under her car insurance policy after she was involved in a road traffic accident. Her policy said that the insurer would provide alternative transport while her car was being repaired. However, she had to wait more than a week before the insurer arranged a hire car for her.
During that time, she had considerable difficulties getting to work, as she lived in a rural area with poor public transport. The insurer eventually reimbursed her bus and taxi fares for the time when she was without a car, but she had still suffered inconvenience.
A couple’s house was flooded by a burst pipe which caused serious damage. Their insurer did not arrange and pay for alternative accommodation for them and their two young children – although their home insurance policy said it would do this. As a result, the whole family had to share a room in a relative’s house for over two weeks.
CD changer upgrade
Another motorist won his claim after an insurer voided his policy because he had not told them a CD changer was fitted to his stolen car.
The ombudsman agreed with the claimant that the insurer had not clearly indicated adding the changer was a major upgrade and ordered the firm to reinstate his insurance and deal with his claim as normal.