Motor complaints 'reflect tough economy'

May 23 2012

The past financial year's 26% rise in car insurance complaints from customers is "likely to reflect the tougher economic times", the Financial Ombudsman Service (FoS) said.

There were 7,264 motor insurance-related complaints during 2011/2012, according to the ombudsman.

"We are seeing more entrenched cases being harder fought, with less enthusiasm on either side for informally negotiated settlements," the ombudsman said.

"However, it is disappointing when insurers continue to pursue cases to the final stage - requesting final decisions from an ombudsman - in areas where our approach is well known and clearly set out."

Some 3% of new FoS cases were motor insurance-related, while 2% of cases concerned building insurance. Contents and travel insurance each accounted for 1%.

The FoS also said it had concerns regarding a 17% rise in complaints which involved guaranteed asset protection.

This is usually sold along with motor finance, and the FoS noted that sellers "do not always explain the limitations of the cover, particularly the fact that policies generally cover only the finance for the car and not any additional purchases such as insurance products and service plans".

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