Dreadful insurance claims experiences revealed

When you make a home insurance claim, it could be something as straightforward as a carpet stain, or as stressful as having to put your life back together after a flood or fire.  

It's fortunate, therefore, that – of the hundreds of thousands of claims settled each year – the majority are handled reasonably well and leave the customer satisfied. 

However, when a claim is handled poorly, it can cause untold misery and put a claimant's life on hold – in some cases, for years. 

And unfortunately, when it comes to home insurance, record levels of complaints suggest these experiences are increasingly common.       

Here we explore what a bad claim can look like, what insurers are doing wrong and steps you can take to help avoid a claims nightmare. 

'My home insurer made a bad situation worse'

Billie-Paige Walker (pictured), 28, from Buckinghamshire, contacted her home insurer Policy Expert in March 2023, after noticing a crack in her kitchen skirting board. The issue was quickly identified as a water leak under the kitchen floor – and fixing it meant ripping up large sections.

Billie arranged and paid for the repair herself, but she subsequently grew concerned about Policy Expert's apparent lack of urgency in restoring her kitchen and making it safe. Nearly a fortnight passed before claims staff got back in touch – by which time damp and mould had appeared, and her father had hired and installed a dehumidifier. 

Over the ensuing months, the insurer's contractors installed their own dehumidifier, but Billie and her family were losing faith in its approach. There were months-long delays and minimal contact from claims staff, and she was worried about mould around her two young children, one of whom has asthma.

In February 2024, arrangements were finally made to install a new kitchen. Needing alternative accommodation, Billie struggled to secure a short-term rental property locally, so she rented one owned by her parents for six months.

Despite having been open about renting from her parents and Policy Expert agreeing to cover the cost of the alternative accommodation – a decision she tells us was authorised by at least two Policy Expert staff in February – its fraud team raised the alarm in April. It froze Billie's claim, locked her out of its website and investigated her eligibility for the accommodation cover.

This caused months of considerable distress, which only ended in August when the insurer reversed its stance and reopened Billie's claim – shortly after we contacted it about her experience.

The chaotic claim was made worse by highly inappropriate behaviour from one of Policy Expert's workers. Billie showed us several text and WhatsApp exchanges between herself and an individual working on the claim between December and April, in which the person repeatedly makes what appear to be romantic passes at her. In the messages, the person offers compliments about her appearance and figure and asks her out to dinner on at least three occasions.

When we alerted Policy Expert in August, it launched an investigation. Now, a spokesperson from Policy Expert told us: 'Our priority at Policy Expert is settling policyholder claims quickly and fairly. We would like to apologise to Miss Walker for her experience. An investigation into the behaviour of a member of staff assigned to the claim identified misconduct, and as a result, they no longer work for us.

'Regarding Miss Walker's claim, we are pleased to say we have now settled this to her satisfaction.'

• Find out more: See our unique ratings of home insurers and their policies. 

The makings of a poor claims experience

Billie reached a final settlement with Policy Expert in early October – more than a year and a half after she started the claim. 

There were clear examples of misconduct, making the protracted experience all the more difficult to endure. But while it wouldn't be fair to describe her claim as 'typical', it does carry hallmarks of poor service that are, sadly, far from unique.

When we rated 21 insurance firms for their claims service, Policy Expert had the dubious honour of ranking last out of 21 providers. 

It achieved a claims score of 56% – compared to an average score of 66% and a top score of 73%. The claims score reflects how satisfied respondents to a survey in June and July were with their most recent claim, as well as how likely they would be to recommend their insurer based on how it handled the claim.

• Find out more: See how Policy Expert compares with 20 other providers rated for claims

'Even their subcontractors have subcontractors'

We asked survey respondents who had said they were dissatisfied with how their claim was handled to tell us why they'd rated their particular insurer poorly. A quarter (25%) of these dissatisfied claimants complained about delays or lack of responsiveness from their insurer.

A number of customers in our survey also complained about a disjointed experience stemming from poor co-ordination between various third parties. One commented that their insurer's  'subcontractors have subcontractors and not one talks to another. Appointments are made, but no one seems to know about it and nobody arrives'.

Meanwhile, claimants with various insurers felt caught out by policy terms or conditions of the claims process – or they felt that the insurer seemed reluctant to pay their claim in full. 

One Esure customer, for example, commented that they'd lost out some of the value for an 18-carat bracelet they'd purchased overseas more than 30 years ago because they didn't have a receipt.

And a customer of LV General Insurance (LVGI) – which joined Esure in receiving the second-lowest claims score of 60% – complained that LVGI 'seemed way too keen to find any way to not proceed with the claim'.

• Find out more: how to make a home insurance claim.

Complaints reach highest level in a decade

As well as giving insurers an overall claims score, we asked survey participants to rate their provider's claims handling in specific service areas. 

Insurers most frequently drew criticism from claimants when it came to the settlement value of their claim, with eight providers (out of 20 rated in this area) receiving a poor star rating of two stars out of five.

Following this, a third (seven out of 21) got poor ratings on the clarity of communication, specifically how the claim was progressing.

Many of these issues have been reflected in complaints reaching the Financial Ombudsman Service. The complaints adjudicator service received 2,001 complaints about buildings insurance between April and June this year, a 10-year high.

It says the most common reasons for complaints being brought were declined claims, delays and disputes over the value of claims.

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The insurers respond

We contacted the three lowest-scoring insurers about their results: Policy Expert (56%), Esure (60%) and LVGI (60%). 

Importantly, not all of their customers were dissatisfied with their service. However, as well as sitting at the bottom of our table, all three were notably among those that were rated poorly on settlement value and clarity of communication. 

Policy Expert challenged our survey findings, with a spokesperson arguing that the 39 Policy Expert claimants we quizzed 'represents just 0.03% of the 224,988 claims we've dealt with over the past two financial years'. It also cited high scores on Reviewcentre.com and Trustpilot, noting: 'We pride ourselves on providing best-in-class customer service while also providing low-cost insurance.'

Esure and LVGI also said that they were receiving positive customer feedback – with LVGI adding that the latest Financial Ombudsman Service data shows it to be performing well compared to other providers. However, both added that they continually work hard to review and improve their service. 

Esure said: 'This month we are introducing a new dashboard that will enable our Home customers to better monitor progress with their claim.' LVGI said: 'We look forward to looking at the detail of this survey to see where we can make additional improvements. We are investing heavily in technology and people to ensure we provide the very best customer service, as well as making the claims process as simple as we can.' 

How to avoid a claims nightmare

Follow these four tips to reduce the likelihood of your claim going too far awry.

• Pick the right insurer: No matter how impressive the product appears on paper, the acid test of an insurer is how well it handles claims. There's no bulletproof way of predicting how it will deal with your claim, but it can help to check the provider's recent track record. See our ratings of 21 providers based on their claims service.   

• Check the policy wording: One of the commonest reasons claims are declined is because the claimant didn't have the cover they thought they did. To avoid a rude awakening, it's vital that you check the policy wording before you commit to a purchase. However, for an idea of how generally comprehensive 75 buildings and contents policies are, check our cover reviews.   

• Declare if you have vulnerabilities: If you make an insurance claim, it's reasonably likely you'll have more to deal with in life than just the insurer's admin processes. Let it know if you're struggling with any financial challenges, health issues or emotional strain. Insurers are supposed to take these factors into account in how they deal with your claim.   

• Complain if things go wrong: Tell the insurer if you're dissatisfied with an aspect of its service. Set out in writing what the problem is, how it's affected you and what you'd like the insurer to do about it. This begins a formal eight-week process where the insurer must investigate your complaint and provide a detailed response.

Find out more: How to complain about your insurer.

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Support our campaign to end the insurance rip-off

Claims handling is one area in which we think insurers are letting customers down too often – with recent Which? research finding that almost half of people making an insurance claim experience at least one problem in their claim journey. 

Some claimants told us they developed physical health problems as a result of bad service from their insurance company. 

Meanwhile, the industry regulator itself has commented that there are problems with 'substandard service levels across insurance sectors.'

We're campaigning for wide-scale change to bring fairer value to insurance customers at large.

• Find out more: learn about our campaign, and sign our petition. 

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