Financial Ombudsman Service warns of risks of getting insurance details wrong

The Financial Ombudsman Service is highlighting the problems people can face when they find that they are not fully insured for what they need.

Hundreds of people bring complaints to the ombudsman service every year because they are not satisfied with how their insurer has dealt with a claim where not being fully insured, also known as underinsurance, is an issue. 

In a new report published today, the Financial Ombudsman Service sets out the possible issues that can occur if someone doesn’t answer questions correctly when taking out insurance. The report also contains some key points for insurers.  

The report details how some customers may have lost out on their insurance claims, in some cases having to pay tens of thousands of pounds due to being underinsured. It also looks at the issue of misrepresentation, where someone gives their insurer the wrong information.

Helpful tips for customers in the information published today include:


  • Read the small print to make sure you know what your policy does and doesn’t cover
  • Talk to your insurer if your circumstances change
  • For buildings and contents insurance, get a full estimate of the value of the things you want to cover, e.g. your jewellery or house


  • Always go for the cheapest deal
  • Assume you need the same level of cover year after year
  • Be tempted to not give your insurer the full information 

In a motor insurance case, a customer, Mark, found that he did not have the right insurance cover in place. He had been using his car to drive to work, but when he had an accident on the way home, his insurer said he was not covered for commuting. Some insurance policies include commuting in the definition of using a car for ‘social, domestic, and pleasure’, but Mark’s one did not. We investigated and found that, while Mark should have read his policy documents, he had not deliberately given the wrong information. We told the insurer to consider Mark’s claim and pay any claim proportionately.

In one travel insurance case, another customer, Eva, had problems when she became ill while on holiday. She felt she had disclosed her pre-existing medical conditions when taking out the policy, although her insurer disagreed and refused to pay the claim. We investigated what questions Eva had been asked when she took out the policy and decided that she had disclosed everything that was asked, so we told the insurer to pay the claim in full.

Caroline Wayman, chief ombudsman and chief executive of the Financial Ombudsman Service, said:

“The Financial Ombudsman Service hears from hundreds of people every year who have had problems with not having the right level of insurance for their needs. The implication of being underinsured can be costly, so it’s important that customers give their insurer the right information when taking out cover.

“Businesses need to ensure that they ask clear, specific questions – and treat customers fairly when claims are made. If you’ve had a problem with your insurer and aren’t happy with how it has dealt with your complaint, get in touch with our service and we’ll see if we can help.”

Read the full report on underinsurance, misrepresentation and non-disclose on our website.

Please contact the Financial Ombudsman Service media team for more information - email [email protected] or phone 020 7964 1234.

Notes to editors

About the Financial Ombudsman Service

The Financial Ombudsman Service was set up by Parliament to resolve individual complaints between financial businesses and their customers on a fair and reasonable basis, as an alternative to the courts. It can look into problems involving most types of money matters from payday loans to pensions, pet insurance to PPI. It is committed to sharing insight and experience to encourage fairness and confidence in financial services. 

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