Insurance customers are seeing their claims fall short by up to £1.2bn a year, new research reveals...
Insurance customers are seeing their claims fall short by up to £1.2bn a year, new research has revealed.
A study, commissioned by MoneyExpert.com, found that in the last five years around 5.74 million home insurance customers were not paid the full amount they claimed for.
The report also showed that more than 5.07 million car claims were not met in full after taking into account excesses agreed with insurers.
Shortfalls on home claims amount to around £3.59bn while up to £2.72bn has been cut from claims made on motor policies, the research showed.
This adds up to a £6.31bn shortfall on claims in the past five years – around £1.2bn a year.
The average shortfall per house insurance claim in the last half-decade is £672 while for motor claims it is £537.
Tim Berry, a director at MoneyExpert.com, called the figure "staggering".
However, he added: "It is not necessarily the insurer's fault if a claim is not settled in full. Customers need to be careful when taking out insurance that they choose a policy which provides the right level of cover.
“Many people focus purely on the price of their insurance when they buy. That can be a false economy if the policy does not pay out enough when they need it.
“We would urge customers to look as carefully at the quality of the cover on offer as the price when they take out home or motor cover.”
More than 260,000 home insurance customers saw shortfalls of more than £1,000 between the amount claimed and the eventual payout (after the excess was deducted) and around 176,000 motor customers suffered cutbacks of more than £1,000.
Around a third of motor insurance claims made over the last five years were settled in full while one in five home insurance claims were also paid out without any cutbacks.
The research also showed around 76% of home insurance customers and 77% of motor customers have not made claims in the past five years.
