Buildings insurance complaints hit a 10-year high

• More than 2,000 building insurance complaints were brought to us in the first three months of this financial year.
• Many of those complaints related to claims being delayed, declined or undervalued.
• The more third parties involved in a claim, the higher the chance of poor communication, delays and consumer dissatisfaction.

Data released today revealed that between April and June 2024/25 buildings insurance was the second most complained about insurance product.

Cases have risen by 13% compared to reported complaints in the same quarterly period in 2023/24. The number of buildings insurance complaints has been increasing steadily over the past ten years, and in the last financial year, 41% of cases were upheld.

The top three reasons for complaints being brought to us in the last financial quarter are claim decline (41%), claim delay (23%) and claim value (8%).

Sean Hamilton, Ombudsman Director in Insurance at the Financial Ombudsman Service, said:

Buildings insurance complaints have been steadily on the rise for some time, but it is concerning to see this significant change in the number of unhappy consumers coming to our service in just a three-month period.

We encourage the sector to take on board this insight and the reasons for which we are seeing cases, and to improve communications, transparency and timeliness.

If people aren’t happy with how they have been treated they should contact our free, independent service and we’ll investigate.”

We’re seeing cases related to a range of issues including:

• Increasing numbers of cases where flood and storm damage is complex and expensive
• Supply chain issues, with insurers struggling to find contractors and source materials
• The rising cost of building materials and contractors meaning claims cost insurers substantially more
• Issues with alternative accommodation, including insurers saying none is available or homeowners being repeatedly moved between hotels, often at short notice
• Poor communication in cases involving third parties such as loss adjustors and surveyors

Recent research by us indicates that when a professional expert, such as a loss adjustor, is required in a case, communication between the consumer and insurance provider can break down, leading to delays and dissatisfaction.

The more ‘third party agents’ there are involved in a claim journey, the more likely it is that difficulties will emerge.

We looked at a sample of cases where final decisions had been issued, finding that ‘agents’ were involved in 80% and of these 75% were upheld.  This is against an already high general uphold rate of 57% for buildings insurance claim delay complaints.

Sean Hamilton added:

The greater the number of parties involved in a claim, the more challenging it becomes for a consumer to receive information promptly.

We’ve heard from consumers who find themselves locked in a confusing chain of communication with no one party taking responsibility, and significant delays in settlement.

Firms need to ensure they’re meeting their regulatory obligations by clearly communicating with policyholders, engaging throughout the process and settling claims without unnecessary delays.”

Notes to editors 

About the data

The data in this release refers to 1 April to 30 June 2024. 

All comparisons to Quarter 1 2023/24 refer to the published data, which was published on 14 September 2023. 

Buildings insurance claim delay complaints uphold rate data is from 1 April 2023 to 21 March 2024.

The 'uphold rate' is the percentage of cases found in favour of complainants.