ABI publish analysis of insurance payout rates
Date: 26 January 2016
Today the Association of British Insurers (ABI) published for the first time analysis showing pay-out rates for the most common insurance claims during 2013 and 2014. The analysis covered 6.9 million motor, home and travel insurance claims handled by 19 insurers.
The key aim of this analysis is to help the industry identify where customers may require further support in understanding what they are covered for, to ultimately reduce the level of declined claims.
In the instance of home insurance claims, an area many of Tangible Building’s clients experience problems with, the report showed that:
- Nearly four in five (79%) of home insurance policyholders who made a claim were successful.
- That the average payout for home insurance claims was £2,520.
- But that more than one in five home insurance claims is unsuccessful.
Common reasons for claims failing were identified as:
- Wear and tear or damage caused by a lack of maintenance.
- The claim value being below the policy excess.
- Not having bought the right cover, such as accidental damage, which is often available as an added extra.
- Complexity of policies and confusion about what is covered.
ABI’s Director General, Huw Evans said:
"As insurers, we want our customers to have greater trust in us to pay claims when life gets difficult. We cannot earn that trust without being more transparent about how many claims are paid and why a minority of claims are usually declined. That is why the figures we are publishing today are so important.
"Contrary to popular belief, insurers want to pay honest claims. It helps nobody when customers have bought the wrong product or have not disclosed important information. So we will use the analysis we are publishing today to drive awareness campaigns to improve even further the acceptance rates for home and travel. Buying insurance should never just be about getting the cheapest price in the quickest time possible, it should be about ensuring you have the right product for your hour of need."
When it comes to home insurance claims, it’s so important to challenge any decision and be fully aware of what your policy covers you for.
A significant number of Tangible Building customers initially approach us as a result of their home or building insurance claim being turned down by their insurance company. We then visit the property and discover an insured peril is operative and therefore the loss is covered.
This is just one of a number of unacceptable practices by insurance companies we come across regularly. Another is for many insurers to attempt to validate a claim over the telephone. Certain other insurance companies use claim validation companies who are incentivised to turn claims down, or settle claims cheaply.
If you feel you that you have been sold short, it’s important that you talk to someone who specialises in insurance reinstatement work such as Tangible Building Solutions. Speak to one of our experts for free impartial advice on 0800 328 4188.