Types of complaint we see
Complaints about mis-selling
Customers complain to us that they were mis-sold a personal accident policy. We find this is usually because they:
- didn’t understand the nature of the policy they were applying for
- thought the policy would provide benefits in different circumstances than it actually does
already had cover
- didn't apply for the policy at all and say it was added without their knowledge to another product
Common misunderstandings we see from customers are that they didn’t realise that:
- their policy doesn’t cover them for illness or disease
- death or bodily injury has to be caused by an accident in order for the policy to pay out
Complaints about claims issues
We see complaints from customers where a personal accident insurance claim has been declined because their insurer doesn’t think the circumstances of the claim meet the policy terms.
The customer (or their estate) needs to show:
- they suffered an accident that meets the definition set out in the policy
- accident caused bodily injury, death or disablement
- bodily injury, death or disablement was sufficient to meet the policy terms
Policy wording varies, and definitions for things like ‘bodily injury’ and ‘accident’ may differ or may not be defined at all. This causes issues and complaints.
Handling a complaint like this
If you don't reply within the time limits, or the customer disagrees with your response, they can bring their complaint to us. We'll check it's something we can deal with, and if it is, we'll investigate.
We'll expect you to be able to show us that you've investigated the complaint thoroughly.
Find out more about how to resolve a complaint.
What we look at
As with every case, in reaching a decision about what’s fair and reasonable, we consider:
- the relevant law and regulations
- any regulator’s rules and guidance that applied at the time
- any industry codes of conduct in force at the time
- what we consider was good industry practice at the time
If there are disagreements about the facts, we’ll make our decision about what probably happened using evidence provided by you, your customer and relevant third parties.
Complaints about mis-selling
Customers often complain they weren’t made aware the policy only covered them for accidents, so we look carefully at the information they were given at the time of the sale.
Even though personal accident policies are usually non-advised sales, you should still make sure that your customer is given enough information to make an informed choice. Documents need to be clear, fair and not misleading, so that customers can decide whether:
- to take out the insurance
- the insurance is right for them
You need to draw the customer's attention to any significant and unusual features of the policy like key exclusions and restrictions on cover.
Depending on the type of sale, the key documents we’ll look for are:
- a copy of the sales script the business would have used
- copies of any marketing literature posted or given to the customer
- the application form
- any fact find or recommendation letter mentioning the cover
- a sales quote
- key features
- policy terms
- a copy of the customer’s bank statement showing the transaction
We’ll look at the documents at the point of sale and decide if it was:
- clearly explained how the policy worked
- highlighted any key exclusions or limitations
If the policy wasn’t clearly explained in the documents given to the customer, we may conclude the policy was mis-sold.
Where a customer says they have cover elsewhere, this wouldn’t necessarily mean the policy was mis-sold – especially if the sale was non-advised. We’d need to consider the information carefully to make sure it was clear and allowed the customer to make an informed choice about purchasing the policy. If the sale was advised, we’d consider what other insurance cover the customer had and whether you were aware of this before you sold the policy.
If the customer says they didn’t know they had the policy, we’d need to think about whether you did enough to make the customer aware of it, and whether the customer agreed to the sale.
The customer’s bank statements might be helpful in this situation to see how clear their direct debit was. This will help work out whether we think it’s likely the customer knew about the policy.
Employers can complain to us about the sale of a group policy if they meet the definition of a micro-enterprise.
Complaints about claims issues
We’ll need to decide whether an accident actually happened. We’d expect the customer to show this, and if they can’t, we wouldn’t expect you to meet the claim. However, working out whether an accident happened isn’t always straightforward – and will depend on the policy wording and the specific facts of the case.
We’ll look at how your policy defines an accident. Accidents are central to all claims, but we often find the word ‘accident’ isn’t actually used in the policy wording. Some insurers use their own, more specific definition. For example, a policy might say the customer must suffer death or bodily injury as a direct result of an unexpected, external, violent and visible cause.
Some policies define ‘accident’ as a sudden, unexpected and specific event, external to the body, which occurs at an identifiable time and place.
If you’ve given a specific definition, we’ll need to consider whether the customer’s accident falls within that definition. If it doesn’t, we’ll usually say it’s fair for you to decline the claim.
Insurers often say the cause of an accident must be external to the body. This means that an accident caused by sudden medical events like heart attacks and strokes aren’t covered, because they’re not external to the body.
But sometimes a customer will say their accident was caused by an external force acting on their body, or by an external activity they were taking part in. For example, a customer may say they injured their back while lifting a heavy object, or tore a muscle while jogging. We need to think carefully about what actually caused the injury – and whether that cause can correctly be described as external to the body.
So if a customer bent down to tie their shoe laces and pulled a muscle in their back, then the cause of injury was the customer bending forward, not the shoe laces applying external force to their body. So we can’t reasonably say there was a sufficient external cause.
Similarly, a jogging injury caused by tripping over a stray branch has an external cause – the stray branch. But tearing a muscle in the regular course of jogging doesn’t have an external cause – the injury just happened in the course of running.
If there’s no definition of ‘accident’ in a policy, we’ll apply a definition of the word as it’s commonly understood – an unforeseen or unexpected and unfortunate occurrence.
We’ll then look at whether the circumstances of the case fit within that definition. We need to be satisfied the circumstances fall into at least one of the following categories:
The injury was the natural result of an unexpected cause
This is where something unexpected happens – and the natural consequence is an injury.
For example, being struck by a car while walking on the pavement is an unexpected event – and an injury is a natural consequence
The injury was the unexpected result of a natural cause
This is where something normal happens but with unexpected and harmful results. For example, preparing vegetables in the kitchen and accidentally slicing off a finger. The activity of slicing vegetables is one that’s generally safe and ‘natural’, but an injury may be caused by unexpectedly slipping with the knife.
If the circumstances fall into at least one of these categories, we can say the circumstances were accidental.
But, if an injury results naturally from an event like jumping from the roof of a tall building and suffering a broken leg, we wouldn’t consider this to be accidental.
Once the fact of an accident has been established, we’ll look at whether the accident actually caused the death, disablement or bodily injury being claimed for. Most policies need the accident to be the sole and direct cause of whatever injury followed.
But when serious injuries occur, there may be several things happening at the same time. For example, a heart attack could cause a car accident – or a car accident could cause a heart attack. Or it could be that the two events are completely unrelated.
We’ll review the evidence and try to reconstruct the chain of events. Where we can’t be sure what happened, we’ll make a decision on what we think most likely happened. We’ll then need to decide whether the original cause of the accident led to the injuries suffered by the customer.
Policies don’t usually cover injuries caused by sickness, disease or any naturally occurring condition or process. This means insurers turn down claims on several grounds where there are additional causes.
An insurer may say:
- factors other than the accident caused the death or bodily injury – for example, an underlying disease or degenerative condition
- the accident didn’t cause, but brought forward, the death or bodily injury that would have happened anyway because of an underlying medical condition
- the customer was already disabled and the accident just increased their level of disability
When declining claims on these grounds, insurers will often refer to a customer’s medical history, medical reports, death certificate and the coroner’s report. We’ll look at the evidence carefully to decide how far we think the accident actually contributed to the injury.
We’ll usually ask you to meet the claim if the accident:
- caused death or injury without any additional contributory causes
- was a significant factor in the death or bodily injury
We wouldn’t expect you to meet the claim if the accident:
- wasn’t a significant factor at all
- didn’t cause or contribute to the death or injury
Paying part of the claim
Where we don’t think you should pay the full benefit but it’s fair and reasonable to pay a proportion of it, we’ll assess the extent to which the death or bodily injury could reasonably be attributed to the accident. We’ll usually then tell you to pay that proportion of the benefit.
If we see medical evidence suggesting that the accident caused 25% of the injury, but a degenerative condition caused 75%, we can tell you to pay 25% of the benefit.
In some cases, it might be that the accident accelerated the effects of a condition the customer already had. Or an existing condition meant the customer would have died or suffered disability at some point in the future – even without the accident.
For example, a customer with severe arthritis might become permanently and totally disabled within ten years because of their condition. But an accident may have brought those effects forward to the extent that the customer is now permanently and totally disabled.
Where the accident brought forward the effects of an existing injury or disability, we’ll assess the available medical opinion on how far the accident brought it forward. We’ll usually then tell you to pay a proportion of the benefit in line with this.
For example, if the customer’s likely working life is shortened from 40 to 30 years by the accident, we might tell you to pay 25% of the benefit – to cover the years lost as a proportion of their total working life.
Policies contain different definitions of 'permanent and total disability'. In most cases, the disability has to prevent the customer from working. A customer would usually need evidence to show that they’re totally unable to perform either:
- Their own occupation
- Any occupation for which they are suited because of their education, training or experience
- Any occupation whatsoever
We’ll look at the circumstances of the case and any relevant medical opinion to decide whether the customer meets the definition used in the policy.
We’ll also look at what’s fair and reasonable in the circumstances. So we’ll generally say that ‘any occupation’ would mean ‘any suited occupation’, taking into account the customer’s education, training, or experience.
But where the policy provides benefit only when the customer is unable to carry out ‘any occupation whatsoever’, we’re likely to say this doesn’t mean any suited occupation. If the customer was unaware of the restrictive nature of the policy, this may be a sales issue.
Policies often cover the loss of a limb, or the loss of use of that limb. They may also cover the loss of a particular sense like sight or smell.
Sometimes an insurer will say the customer’s injuries aren’t serious enough to fall under the policy terms. For example, a customer who suffers significant damage to their arm may still be able to use their arm to some extent.
When dealing with complaints involving these injuries, we’ll look at any specialist medical opinion on the extent of the customer’s injury. We'll think about whether you should pay the claim because the extent of the injury means it could reasonably be classed as a 'total' loss – or whether the body part still retains a reasonable level of use.
Some policies already include cover for partial loss. But even where a policy doesn’t cover partial loss, we’ll consider whether the customer had a reasonable expectation that the policy would pay out if an accident caused them a life-changing disability. That would usually mean looking at how clearly the cover was explained in the policy. We’ll consider this and the medical evidence to decide what proportion of benefit – if any – you should pay.
Insurers sometimes decline claims for death or bodily injury that occurs as a result of surgery. They may say the:
- death or injury wasn’t accidental under the terms of the policy
- accident wasn’t the sole and direct cause of the death or injury
All surgeries involve some risk – so we try to take a common-sense approach. We’ll consider whether:
- the risks were explained to the customer
- something happened that was unexpected, unplanned or as a result of medical negligence either before, during or after the surgery
This usually puts cases into one of two categories:
- injuries that are a natural (but unfortunate) result of the operation. For example, there’s a risk that cutting into the body might result in a fatal infection. This is a known risk of surgery and is usually disclosed to the patient beforehand
- injuries that, while a possible risk, are not the natural result of the operation. For example, where the surgeon ends up cutting into the wrong part of the body. This may be as a result of negligence or something unexpected or unplanned happening during the procedure
We usually think it’s reasonable for insurers to pay claims that fall into the second category. But we need to review the medical evidence carefully to decide which of the two categories applies.
Personal accident policies usually include several specific exclusions. It’s for an insurer to apply any exclusions to your claim and show us why they’ve done this.
It’s common for exclusions to apply to injuries caused by:
- the consumption of alcohol and/or drugs
- a customer ‘recklessly’ exposing themselves to danger
- deliberate self-inflicted injuries
- specific excluded activities, like driving a vehicle with less than four wheels, diving, mountaineering, rock and cliff climbing, pot-holing, parachuting, professional sports, boxing and racing
- injuries as a result of war, terrorism or invasion – as well as for claims arising from serving in the armed forces (although specialist forces personnel policies are available)
We’ll need to review the claim and see if the insurer has given enough evidence to show the exclusion applies in particular circumstances.
Where there’s a dispute about alcohol or drug involvement in the cause of an accident, we need to consider whether the accident happened while someone was simply under the effect of alcohol or drugs – or whether the consumption of alcohol or drugs directly caused the accident.
To rely on this exclusion, you’d need to show that the:
- accident was unlikely to have happened without the consumption of alcohol or drugs
- customer didn’t escape the consequences of an accident as they may otherwise have done, because of the alcohol or drugs in their system
We’re unlikely to say it’s fair for you to rely on an exclusion where the customer slipped on a wet floor after drinking two pints of beer. However, the opposite would be the case for a customer who stumbled into a busy road and was hit by a car after a night of heavy drinking or drug taking.
We’ll also take into account whether the customer anticipated the risk of death or bodily injury and, if not, whether they should have reasonably anticipated this risk.
If we think the accident probably would have happened whether the customer was drunk or not, we might decide it’s unfair for you to rely on the exclusion.
Some policies have exclusions relating to deliberate self-inflicted injuries or ‘reckless exposure to danger’.
We’d need to decide whether a particular action amounts to a reckless exposure to danger. For example, although some people may argue that cycling without a helmet is a reckless exposure to danger, others might say it’s common practice and part of ordinary life. On the other hand, you couldn’t argue the same point for base-jumping or harness-free rock climbing.
We try to take a common-sense approach to decide whether we think the customer recklessly exposed themselves to danger – and therefore whether you relied on the exclusion fairly.
If you reject a claim because you believe the customer’s injury was deliberately self-inflicted, you’d need evidence to show this. We’ll consider all the available evidence as well as the customer’s testimony to decide what we think happened and whether you’ve applied your exclusion fairly.
If you want to rely on an exclusion for death caused by suicide, you need to provide evidence showing – on balance – that suicide was the most likely cause of death.
A coroner’s report will often play a part in this assessment. But in order for a coroner to record the cause of death as suicide, they have to be satisfied beyond reasonable doubt that suicide was the cause of death. So if a coroner does return a verdict of suicide, we wouldn’t say the death was accidental and covered by a personal accident policy. However, if a coroner records a verdict of accidental death or an open verdict, it falls to us to decide what happened, on the balance of probabilities.
You should take into account the coroner’s findings and any other evidence to decide whether the customer’s death was more likely than not the result of suicide.
Putting things right
If we think you have made a mistake or treated a consumer unfairly, we'll ask you to put things right. Our general approach is that the customer should be put back in the position they would have been in if the problem hadn't happened. We may also ask you to compensate them for any distress or inconvenience they’ve experienced as a result of the problem.
The exact details of how we'll ask you to put things right will depend on the complaint, and how the customer lost out.
If the complaint is against the insurer then we’d ask them to cancel the policy and refund the premiums the customer paid, with interest at 8% simple per year, less any tax due.
If the policy was sold by a broker or IFA, we’d ask them to pay compensation equivalent to the amount the customer paid in premiums. This is because the broker or IFA doesn’t keep the premiums – the premiums are passed on to the insurer.
Sometimes, we might think a policy has been mis-sold but we’re satisfied the customer hasn’t been disadvantaged, so we might think the customer would still have bought the policy and therefore haven’t lost out as a result. In these cases, we might consider making an award of compensation for any distress or inconvenience that your mistake has caused the customer.
In some cases, we may tell you to pay a claim if we decide an exclusion or restriction was unfair or unusual and wasn’t brought to the customer’s attention – or if the customer could have bought a policy elsewhere which would have covered their claim.
We may decide the mis-sale meant that your customer relied on statements and representations made by you. In these cases we may say that compensation should be paid either for the distress and inconvenience caused to the customer, or for the full amount of their claim under the policy.
Where we decide that you’ve wrongly turned down the customer’s claim and they’ve been deprived of money, we’ll usually tell you to pay compensation at our normal rate of 8% simple per year, less any tax due.
In some situations, the claim under the policy may be delayed – for example, in claims for accidental death, the estate of the person who has died may not be aware there’s a policy in place. In these cases, we generally say the interest is payable from the date that you would’ve accepted the claim – rather than from the date of the death or bodily injury. This is to reflect the fact that you can’t accept a claim you’re not aware of.
Compensation for claims handling delays
We’d expect you to handle claims as quickly as possible. But we also take into account that delays are often unavoidable if you’re waiting on information from a third party (such as a GP or medical specialist) before you can make a decision.
However, if we think you’ve unnecessarily delayed assessing or accepting a claim, or have not been proactive in chasing third parties for information, we’d consider making an award to reflect the delays and worry this may have caused the customer.
If the complaint is brought by the estate then it’s unlikely we would make an award for delays.
Compensation for the effect of a claims decision
Your decision to decline a personal accident claim may mean the customer has lost out on the use of a lump sum payment. If we later conclude that you should have accepted the claim, we’ll award interest on the claim payment.
Any additional compensation award would depend on the circumstances.
Business Support Hub
If you want to talk informally about a complaint you've received, you can speak to our Business Support Hub. They can give general information on how the Financial Ombudsman might look at a particular complaint. We also offer guidance on our rules and how we work.
Find out how to contact the Business Support Hub.
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