Following a review, the Financial Conduct Authority (FCA) has declared that home and motor insurers must improve their treatment of vulnerable customers and how they handle customer claims.

The watchdog’s review, which was prompted by an increase in customer complaints about insurance claims, discovered deficiencies in the insurance claims process, including lengthy complaints handling times and customers not been provided with appropriate settlements.

It also found that some firms had failed to show they were adequately able to identify vulnerable customers in need of additional support and claims processing.

Amid the claims process issues, the FCA found instances wherein some motor insurance customers had been offered a price lower than their car’s fair market value after it had been written off – a practice which is against FCA rules.

The FCA has subsequently ordered firms it has found to be at fault to “put these wrongs right” and provide redress to affected customers where necessary.

Noting that fair claims handling was especially pertinent during the “cost of living squeeze”, Sheldon Mills, executive director, consumers and competition at the FCA, said: “While we have seen many firms treating their customers correctly, we found too many examples of customers not receiving the service they’re entitled to.”

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