How can the FSA help if you have a complaint vs your insurer

The majority of policyholders will never experience a problem with their insurance company. The claims process is usually relatively straightforward and major insurers have streamlined the process so it runs like clockwork. As with everything though, sometimes things go wrong, and when this happens you’ll want to know where to turn for help.

In this section we’ll cover the obligations the Financial Services Authority places on your insurer, and how you can make a complaint if things go wrong.

What is the Financial Services Authority(FSA)?

  • The FSA is the body who are responsible of regulating financial services in the UK. As well as building societies and banks this also includes your medical insurance provider.

  • One of the bodies key objectives is to offer protection to consumers.

  • The FSA feels that treating customers fairly is a key aspect for financial bodies such as your insurer to bear in mind when dealing the consumers.

  • The FSA funds the Financial Ombudsman which helps settle disputes between consumers and financial institutions.

  • If you complain to the Financial Ombudsman they can provide you with a solution in the form of a legal binding ruling that your insurer is obliged to follow.

The fairness requirement

The FSA imposes a duty on insurers to treat their customers fairly. Unfortunately fairness itself isn’t expressly defined by the FSA, as the body believes it can mean different things to different people. This has worked out well for consumers as the concept has been interpreted widely enough to cover a variety of areas.

If your insurer fails to conduct themselves properly in relation to the following aspects, then you could have grounds to make a complaint.

  • Explanation of relevant terms and conditions – When you make a claim with your insurer any terms and conditions that are relevant should be highlighted to you on the call. Failure to do this can mean that your insurer is committing a breach of the fairness requirement, as there are so many terms and conditions to remember policyholders can’t be expected to know them all. This means if you’ve been denied a claim this decision could be reversed if you’ve not been advised correctly.

    For example, imagine you have a £1000 outpatient limit on your policy and have used £950 so far this policy year, then you need to make a new claim for outpatient treatment. Although your claim will be approved provided its eligible, your insurer should advise you that they’ll only cover £50, and after this you’ll have to meet the charges. Failure to advise you of this could be deemed unfair, as you’d be undertaking treatment when you’d unexpectedly have to pay for. So making a complaint could mean you’re entitled to further cover to make up for this mistake.

  • Honest approach to sales – Fairness requires that when you’re being sold a new policy that your insurer is honest and upfront with you. This means your questions should be answered factually. So say if you’re told warts are covered in order to persuade you to take out the policy, this would class as a mis-sale and the FSA would be able to take action against your insurer.

  • Clear terms and conditions in policy literature – Your policy shouldn’t include any fine print, it should be readable and clear to understand.

Making a complaint

First of all before appealing to any outside bodies you should lodge a complaint directly with your insurance company. Your insurer will take this seriously and undertake a full investigation, usually involving listening to all your calls and reading the logs of all your claims. They will try to prevent your claim going further wherever possible and attempt to offer you a solution.

How can you complain to the Financial Services Ombudsman?

If a complaint against your insurer goes to the ombudsman regardless of fault your insurer will have to pay £500 to cover the investigation, so for small claims they may cover you just to prevent playing these costs.

If the internal investigation process with your insurer has been exhausted unsatisfactorily, then you can take your complaint to the ombudsman, who will be able to offer you an independent investigation. The decision of the ombudsman is binding on your insurer and could result in reimbursing you for any financial losses.

It can be stressful when you feel your insurer is denying you treatment unfairly, and understandably you’ll want to challenge this situation as soon as possible. The protection offered by the FSA means consumer welfare is taken seriously. If you feel your claim has been denied when it shouldn’t have been, don’t just accept it. Raise a complaint with your insurer. You’ll have nothing to lose and could find yourself being reimbursed for your medical expenses.

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