Poor claims experiences and sky rocketing premiums are driving motorists into the hands of rival insurers.
Research from comparethemarket.com reveals that over a quarter of drivers (29%) who made a claim on their motor policy went on to switch provider, predominantly because of an increase to the cost of insurance and frustration at the claims process.
This switching activity is bolstered by rising prices. One of the key findings from their latest Premium Drivers index is that average premiums have risen by £141 over the past three years.
The majority of claimants were critical of the claims process itself, with three quarters (75%) finding it to be slower than they expected. Other complaints included poor customer service, ‘rude and abrupt’ claims handlers, and insufficient pay-outs which did not meet the overall costs. Only 10% of claimants receive a pay-out that exceeded £5,000 and one third (33%) complained that their insurer took too long to settle their claim.
The majority (64%) of claimants who switched post-claim felt that better value was available on the market and almost half (44%) were not prepared to pay the significantly increased premium following their claim at the time of renewal. Nearly a fifth (17%) of claimants switched due to the arduous claims process itself.
|Contacting insurers also proved problematic for some respondents, as almost one third (30%) of claimants found the process of getting through to their insurer difficult and spent longer than expected on hold. Almost half (46%) of those surveyed claimed that their insurers were often ‘missing-in-action’ when they needed them most and they took too long to get back to them in response to a query.
Despite the fact that, according to consumer opinions, only 32% of claims involved a driver who is at fault, a quarter (24%) of claimants did not feel that their account of the incident was believed by their claims handler. One quarter (25%) of claimants described their claims handler as ‘cold’ and ‘unsympathetic’ while half (48%) felt ‘unsupported’ by their insurer.
|The RAC has broken insurance disclosure rules and could face compensation claims from policyholders.
The Financial Conduct Authority last year reprimanded Wales-based home and motor insurer Admiral over its renewal policies, said this week the RAC was the latest company to agree to contact affected customers for breaching rules on information disclosure.
“It is simply unacceptable to see that some firms are still not being properly transparent with their customers a year on from the introduction of the rules,” said Jonathan Davidson, an executive director of supervision at the FCA.
More than one million RAC customers might not have had the right information to decide whether to seek a better deal elsewhere and could be due compensation, one source familiar with the matter said.
Of course, not all insurers are failing to meet expectations. Many insurers have invested heavily in improved claims handling processes and offer new ways of making and tracking claims using their websites and apps.
These provide customers with important information on the progress of their claim, saving the need to call the insurer for an update.
Additionally, some insurers are using the claims experience as a point of differentiation to help market their products, which plays well with drivers who value quality of service.