Source: Insurance Age | 26 Jan 2016
Tags: ABI | claims | motor | travel | Home insurance
Trade body reveals that 99% of motor claims in 2013 and 2014 were successful.
The Association of British Insurers (ABI) has published the pay-out rates for the most common insurance claims for the first time.
The figures for claims made during 2013 and 2014 cover motor, home and travel insurance.
The trade body said its analysis of pay-out rates was done to help identify where customers may need more help to understand what they are covered for, and reduce the level of declined claims.
It added the step was part of its programme to improve customer trust and increase transparency.
The analysis covered 6.9m claims handled by 19 insurers.
Overall the split was 4.3m motor claims, 1.8m home claims and 800,000 travel claims.
According to the ABI 99% of motor claims were successful, with an average pay-out of £2,160.
Under home insurance, nearly four in five (79%) of policyholders who claimed received a pay-out.
The average pay-out was £2,520, compared to the current average combined buildings and contents annual premium of £290.
The association listed that the main reasons for a claim failing were: wear and tear or damage caused by a lack of maintenance which are not insurable, the claim value being below the policy excess, and not having bought the right cover, such as accidental damage.
Nearly nine in ten (87%) of customers claiming on their travel insurance received a pay-out – on average £884.
Declined claims were mainly due to: cancellation falling outside of the scope of cover, failure to declare a pre-existing medical condition that led to a claim, no substantiation for the loss of items, and the claim being below the policy excess.
Huw Evans, director general of the ABI, said: “As insurers, we want our customers to have greater trust in us to pay claims when life gets difficult.
“We cannot earn that trust without being more transparent about how many claims are paid and why a minority of claims are usually declined. That is why the figures we are publishing today are so important.”
He added that “contrary to popular belief, insurers want to pay honest claims”.
Evans concluded: “It helps nobody when customers have bought the wrong product or have not disclosed important information. So we will use the analysis we are publishing today to drive awareness campaigns to improve even further the acceptance rates for home and travel.”