Types of complaint we see
Customers sometimes complain to us that the business who sold them travel insurance didn’t explain all the features and exclusions of their policy to them. In some cases this means they may:
- not have bought the policy if they’d known about a particular feature
- have acted differently on their trip if they’d known about a particular exclusion
If a customer complains that because a policy was mis-sold to them they’ve now had to cancel or amend it, we’ll look at their complaint on the grounds of misrepresentation.
Handling a complaint like this
As with any complaint, we’ll expect you to work with your customer to get to the bottom of what happened, investigate fairly whether anything went wrong, and – where appropriate – take steps to put things right.
If you don’t reply within the time limits for responding to a complaint, 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.
Read more about resolving complaints.
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
- what we consider was good industry practice at the time
You can find more detail below about some of the things we look at:
We’d check the policy document to see if the customer met the basic requirements for taking out the policy. This usually covers things like the customer’s age or residency. If the customer wasn’t eligible for a policy, they’d never be able to claim under it. In these cases we'd be likely to uphold the complaint.
If you’re a business giving advice to a customer about insurance policies, you need to make sure the policy is right for them. You need to ask them about their:
- age, residency and health
- travel plans, including where they’re going and how long for
If you’ve done this, you should be able to recommend the right policy to your customer.
When most travel insurance policies are sold, the customer doesn’t get advice from the business selling the policy. In this case, you don’t need to make sure the policy is right for the customer, but you do need to give your customer enough information about the policy. Information about the insurance should be:
- not misleading
The customer can then make an informed choice about whether or not to buy the insurance.
You should draw your customers’ attention to important or unusual features of a policy, like exclusions and restrictions on what they’re covered for. An example of an unusual exclusion is a travel insurance policy that doesn’t offer any cancellation cover.
Policy terms are important because they:
- may affect a customer’s decision to buy the policy
- limit cover – for example, an exclusion about pre-existing medical conditions
- may have exclusions relating to the customer’s particular trip – for example, if a customer tells you they’re going on motorcycling holiday, you should warn the customer of any policy exclusions about riding motorbikes
- may ask the customer to do something specific in order to get the benefit of cover – for example, customers may need to keep valuables on their person or in a locked safety deposit box to make sure the valuables are covered against theft
A customer should be able to read the key features of their policy and understand what it is they are and aren’t covered for. And they shouldn’t ever be in the position where they’ve read all the policy documentation in full and are still not clear on whether or not their situation is covered.
It’s important all the policy wording should be joined up.
We’ve seen cases where a customer has been offered an optional add-on on for their policy to cover the specific circumstances, but the general exclusions of the policy still exclude any claims for the same circumstances, so the terms of their extra cover contradict their main policy.
Any new policy wording or optional extra cover should compliment the existing wording – or it should be clearly set out that if extra cover is purchased, other associated general terms or exclusions then don’t apply.
A lot of customers who have an annual policy buy their insurance before they go on holiday, but choose to start their insurance on the first day of their next trip. This can be a problem as the policyholder isn’t covered for any cancellation of that holiday, because the policy cover hasn’t yet started.
We expect businesses selling travel insurance to make sure that their customers are aware of:
- the importance of the policy start date
- the risk of not being covered for cancellation if their policy starts too late
Some customers complain about their insurance claim, but also say the policy has been mis-sold to them.
We’d usually look into the complaint about the claim first before considering any complaint about a mis-sale.
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.
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.
The exact details of how we'll ask you to put things right will depend on the complaint, and how the customer lost out. In some cases, we may also ask you to compensate the customer for any distress or inconvenience they've experienced as a result of the problem.
The following gives an idea of our approach:
In this case the customer would then have had the additional cover they needed but would’ve paid a higher premium. We’d say the insurer should pay the claim with interest, minus the additional premium.
We’d need to know how likely it was that the customer would’ve found a different policy. We’d check alternative policies in terms of cost and cover and if we agree, we’d ask the insurer to pay the claim
In this case we’d say the insurer has done something wrong, but doesn’t need to do anything to put things right financially.
I fell ill on a cruise, but the insurer has rejected my claim for medical expenses