Home insurers with claims acceptance rate of less than 55% revealed

Which? has revealed the home insurers with a claims acceptance rate of less than 55%.

The consumer watchdog’s analysis of FCA data showed that acceptance rates of at least half of firms offering home insurance policies appeared to worsen between 2022 and 2023.

And it revealed that six firms had a rate of less than 55%. This includes AA, Esure, EUI, Lloyds Bank, Rentokil and Urban Jungle.

The data showed that for Lloyds Bank, two in three prospective claimants received nothing following their claim, with the acceptance rate sitting at 30-35% for buildings only policies. 

Of all claims Lloyds received, some 15-20% led to complaints. 

Meanwhile, Esure and Rentokil both had a claims acceptance rate of 40-45% for buildings only cover, with them seeing a complaints rate of 10-15% and 0-5% respectively.

And AA and EUI’s acceptance rates sat at 50-55% for the same product. In turn, AA complaints reached 25-30%, while EUI’s sat at 15-20%.

Finally, Urban Jungle’s claims acceptance rate for combined buildings and contents cover was 50-55%, leading to a complaints rate of 10-15%.

The data also showed that across the industry, the overall percentage of claims accepted for combined buildings and contents policies in 2023 was 72%, down from 76% in 2022.

Rocio Concha, Which? director of policy and advocacy, said: “When home insurance customers take out a policy, they don’t expect to have to claim, let alone face a protracted ordeal with their insurer just to get justice.

“That customers who’ve been through hellish ordeals, such as a fire in their house, face lengthy battles with their insurer just to have their claim accepted is extremely concerning.”

Responses

Which? gave the six named firms an opportunity to respond to the data.

AA said that it “will always pay out fully on claims where the customer has the necessary cover” and that the firm had “made significant improvements to our services and have seen the level of complaints come down”.

EUI also said it was “always striving to improve our products and services” and was “confident that we deliver good customer outcomes”.

Meanwhile, Esure said it took a “very comprehensive approach, which includes recording enquiries as a claim, even if the customer does not have cover or is just asking us a query”. The insurer added that it regularly reviewed products to help provide fair value.

And Urban Jungle said it was “committed to paying 100% of valid claims”, while it was also “constantly iterating and improving our products”.

Finally, Lloyds Bank said: “Our customers can rest assured that our policy cover is good relative to the market and our payout ratio is in line with the industry average.”

Rentokil did not provide a comment, according to Which?

Consumer Duty

This comes after the FCA introduced its Consumer Duty rules in July 2023, which set out requirements that firms must follow to deliver good outcomes for their customers.

Concha said that “firms must deliver good outcomes for customers, especially those in vulnerable circumstances”.

She added: “Our research suggests that some firms aren’t following these requirements and the regulator shouldn’t hesitate to take action against those falling short.”