How to complain about an insurer and take it to the Financial Ombudsman

Most insurance claims are paid without fuss. When things go wrong, though, it can feel like you are up against a big organisation holding all the cards. You don’t need to pay anyone to complain for you: there is a free, independent route that ends with the Financial Ombudsman Service. Here is how it works, step by step.

Step 1: complain to the insurer (or broker) first

The ombudsman will normally only look at your case once the business has had a chance to put things right. Complain directly to the firm you have a problem with. That is usually the insurer, but if your complaint is about how a policy was sold or arranged, it may be the broker or other firm that sold it.

A good complaint is short, factual and clear about what you want. Include:

• your name, policy number and claim reference;
• a simple timeline of what happened, with dates;
• what you think went wrong, referring to the policy wording where you can;
• copies (never originals) of key documents, such as the policy schedule, letters, emails, photos, estimates and receipts; and
• what you want the firm to do, for example pay the claim, reconsider a decision, or pay compensation for distress and inconvenience.

Complain in writing, or follow up a phone complaint in writing, and keep a record of every call: date, time, who you spoke to and what was said.

Step 2: wait for a final response, but not forever

Under the Financial Conduct Authority’s complaint-handling rules, the firm must send you a “final response”. The Financial Ombudsman’s guidance on time limits says that for most complaints, including insurance, the business has eight weeks to do this. The final response should explain the outcome and tell you about your right to refer the complaint to the ombudsman.

If you haven’t received a final response within eight weeks, you don’t have to keep waiting. You can go straight to the ombudsman.

Step 3: refer the complaint to the Financial Ombudsman Service

You have six months from the date of the firm’s final response to bring your complaint to the Financial Ombudsman Service. Miss that deadline and the ombudsman usually can’t help, unless there were exceptional circumstances (such as serious illness), the final response was not valid, or the firm agrees to waive the limit. Don’t sit on it.

There are also time limits for complaining to the firm in the first place: usually within six years of the problem happening, or three years from when you became aware (or should reasonably have become aware) that you had cause to complain.

You can complain online or by phone; the ombudsman’s how to complain page explains the process. The service is free for consumers. Some small businesses, charities and trusts can also use it, and the ombudsman’s website explains who is eligible.

What happens next

1. Initial checks: the ombudsman checks the complaint is one it can look at, and asks the firm for its file.
2. Investigation: an investigator looks at the evidence from both sides and gives a view on what is fair and reasonable. Many cases end here, because both sides accept the view.
3. Ombudsman’s decision: if either side disagrees, the case can go to an ombudsman for a final decision.
4. Accept or reject: if you accept a final decision, it is binding on you and the firm. If you reject it, you remain free to pursue the matter in other ways, such as through the courts.

The ombudsman decides what is fair and reasonable in the circumstances, taking into account the law, regulators’ rules and good industry practice. It can tell a firm to pay a claim, add interest, and pay compensation for distress or inconvenience, up to the award limits shown on its website.

Tips that make a difference

• Read the exclusion the insurer relies on. Check the exact wording. Insurers are expected to have drawn significant or unusual terms to your attention when the policy was sold.
• Ask for the evidence. If the insurer says you didn’t disclose something, ask which question you answered incorrectly. My guide to the Consumer Insurance (Disclosure and Representations) Act 2012 explains what it can and can’t do.
• Stay calm and stick to facts. A clear timeline is more persuasive than a long, angry letter.
• Beware of paying for help you don’t need. Claims management companies may take a share of any award, but the ombudsman is free and designed to be used without a representative.
• Ask for your data. Under UK data protection law you can ask the insurer for a copy of the personal data it holds about you, which may include call notes and claim records.

What if the insurer has gone bust?

That is a different problem. If an authorised insurer fails, the Financial Services Compensation Scheme (FSCS) may protect some or all of your claim, depending on the type of insurance.

Other routes

You can take court action instead, for example through the small claims track for smaller amounts, but think carefully: the ombudsman route is free and doesn’t expose you to the other side’s costs. If you accept a final ombudsman decision, you can’t then go to court over the same complaint. Free help is available from Citizens Advice.

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