FCA insurance claims handling update: If you make a home or car insurance claim, your insurer is now under increased pressure from the Financial Conduct Authority (FCA) to improve how it treats you.
The regulator has confirmed insurance priorities focused on claims handling, customer service quality, fair value and consumer understanding of cover.
This matters because home and car insurance are major household costs, and you often only discover whether a policy truly works when you need to make a claim.
FCA Insurance Claims Handling: What has actually been confirmed?
The FCA has confirmed that its insurance focus areas include claims handling, customer service, consumer understanding, fair value, outsourced claims arrangements, access to insurance and premium finance affordability.
Insurers must show they are delivering good outcomes under Consumer Duty rules, not just meeting minimum technical requirements.
You can read the FCA’s official insurance report here: FCA Regulatory Priorities: Insurance report.
FCA Insurance Claims Handling: Why this matters for your household bills
Home and car insurance costs remain high for many households.
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If you pay monthly, you may also pay more overall because of premium finance charges. This can make insurance more expensive than the headline annual price suggests.
The FCA’s continued focus on fair value and affordability means insurers are expected to review whether products, add-ons and payment arrangements deliver fair outcomes.
FCA Insurance Claims Handling: What problems is the FCA targeting?
The regulator is focusing on poor claims handling, slow communication, confusing policy wording, weak oversight of outsourced claims firms, poor outcomes for vulnerable customers and premium finance costs.
These problems can affect you when you make a claim after an accident, theft, flood, storm damage or other insured event.
If your insurer delays decisions, gives unclear explanations or rejects your claim without proper reasoning, you should challenge the decision through the formal complaints process.
FCA Insurance Claims Handling: How could this affect your insurance experience?
The FCA’s priorities do not create a new compensation scheme or cap your premium.
However, increased supervision may influence how insurers explain cover, monitor claims, handle complaints, review premium finance costs and treat vulnerable customers.
You should expect clearer information about what is covered, what is excluded and how claims are assessed.
FCA Insurance Claims Handling: What should you do before renewing your policy?
Do not renew home or car insurance automatically without checking the details.
Review what your policy covers, exclusions, excesses, limits for valuables, accidental damage, courtesy car terms, legal expenses cover, cancellation fees and monthly payment interest.
If you pay monthly, ask your insurer for the total annual cost including interest, then compare it with the cost of paying annually if possible.
FCA Insurance Claims Handling: What should you do if your claim is delayed or rejected?
Ask your insurer for the decision in writing.
Keep copies of emails, claim reference numbers, photographs, repair quotes, call notes, policy documents and any expert reports.
If you think you have been treated unfairly, make a formal complaint. If the complaint remains unresolved, you may be able to escalate it to the Financial Ombudsman Service.
FCA Insurance Claims Handling: Your practical next steps
Check your home and car insurance renewal documents carefully before accepting automatic renewal.
Review whether monthly payment plans significantly increase your total annual cost.
Keep detailed records if you need to make a claim, including photos, receipts and communication logs.
If your insurer rejects a claim, ask for the decision in writing and request a full explanation of the policy wording used.
Escalate unresolved complaints through your insurer’s formal complaints process before contacting the Financial Ombudsman Service.
Useful official guidance: FCA insurance priorities report, Financial Ombudsman Service, and FCA insurance consumer guidance.
People Also Asked…
What has the FCA confirmed about insurance?
The FCA has confirmed that claims handling, customer service, fair value and insurance affordability remain important regulatory priorities.
Is there a new insurance compensation scheme?
No. The FCA has not announced a new compensation scheme, but it is increasing scrutiny of poor customer outcomes.
Why is premium finance under scrutiny?
Premium finance can make insurance more expensive when you pay monthly, so the FCA expects firms to show these arrangements offer fair value.
What types of insurance are affected?
The regulator’s work covers several insurance sectors, including home insurance, motor insurance, travel insurance and premium finance.
What should you do if your insurer handles a claim poorly?
Complain formally to the insurer first and keep evidence. If the issue remains unresolved, you may be able to escalate it to the Financial Ombudsman Service.
