Which? Super-complaint: are the UK’s home and travel insurance industries broken?

The consumer champion Which? last week submitted a super-complaint to the Financial Conduct Authority (FCA) claiming that home and travel insurance markets in the UK are broken, offering shoddy claims service and bizarre technical policies.[1]

Super-complaints are a small but mighty aspect of UK law that allow certain designated consumer bodies to make a direct appeal to regulators where there is evidence of market-wide issues that are harming consumers.

Which? have found that almost half (48%) of people making an insurance claim experience at least one problem during the process (even when claims are approved), causing financial, physical and emotional harm from a product which is supposed to provide peace of mind.[2] Even more concerningly, customers severely impacted by their incident (who are often vulnerable) are twice as likely to experience issues related to their claims process as other customers.

As a result, the super-complaint highlights three main areas of concern:

1. Poor claims handling
2. Inappropriate sales processes
3. Lack of application and enforcement of FCA rules and other relevant law

According to Which?, despite new Consumer Duty rules, consumers are consistently being poorly treated, with complicated and unfair terms and conditions leaving policyholders confused as to the extent of their cover, along with frequent delays, U-turns and rejections when claims are made.

Insurers have consistently failed to clearly explain the claims process and make it accessible for a range of customers with diverse needs. Other complaints from consumers include being repeatedly asked for the same evidence, having to chase insurers for progress updates, and receiving inadequate reasoning for rejected claims.

Home and travel insurance are very large markets in the UK, with many consumers seeing these products as essential purchases. In 2024:

• 32 million adults held a home insurance policy that included contents cover
• 29 million adults held a policy with buildings cover
• 5 million adults had annual travel insurance
• 7 million adults had taken out a single trip policy in this last twelve months

This means that the reach of harm caused by badly operating markets could be considerable.

As is required in order to bring a super-complaint, Which? have done extensive research (including campaigning to End the Insurance Rip-Off) and have identified these issues as systemic harmful features of the home and travel insurance markets.

The industry and the FCA, it is said, have ignored serious issues and, despite the regulator sending “Dear CEO” Letters and undertaking two in-depth reviews of these areas, have so far taken no meaningful steps to address the persistent problems. As a result, Which? is asking the FCA for urgent action in launching a market study, consulting with the government and intervening to stop poor practices where necessary.

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[1] Which? launches insurance 'super-complaint' - Which?

[2] Consumer harm in the insurance claims process - Which?