Insurance small print leads to big problems

The small print in insurance policies has long been a bugbear of small print The Insurance Blogger– but help is at hand from consumer watchdogs at last.

Unclear terms, silly conditions and nit-picking delays are upsetting for many who have made what they thought was a reasonable home or car insurance claim, only for the insurer to reject what they say out of hand.

Which? has just polled members about their insurance claims.

The survey found that 10% of home insurance claims and 5% of car insurance claims are turned down – sometimes in part, sometimes in full.

The most common small print for home insurance is a demand to keep the property in good condition.

Unfortunately, most policies fail to explain what this means, although one homeowner had a claim turned down because they did not regrout their bathroom tiles every year.

Hands up everyone that does that…well, that’s none of you then.

Another common complaint is just what constitutes storm damage, as winds have to reach a certain speed according to Met Office data for the time in question for a claim to succeed.

Astonishingly, one homeowner was asked to provide receipts for all the food in their freezer to support a claim.

Common issues with car insurance are firms going halves on claims when drivers feel they can prove the accident was not their fault. The admission of blame means drivers lose their excess and no claims bonus.

The Financial Conduct Authority is reviewing the terms of home and car insurance, and Which? is urging the regulator to include a scrutiny of terms and conditions as part of their report.

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

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