There has been a 26 per cent increase in car insurance complaints in the past year according to the financial watchdog.
Every year thousands of policyholders end up in dispute with their car insurers.
When this happens and the insurer and policyholder are unable to come to an agreement, the Financial Ombudsman Service (FOS) is the motorists' port of call.
The FOS handles consumer complaints about a wide range of financial services, including insurance.
Increase in customer complaints
And its annual review, published last week, makes for interesting reading as car insurance complaints are up.
Between April 2011 and April 2012 the FOS received 7,264 complaints about motor insurance - an increase of 26 per cent on the previous year.
The FOS called the increase "significant" and said it reflected the "tougher economic times".
The FOS saw a 17 per cent increase in the number of complaints involving guaranteed asset protection, known as GAP insurance.
Confusion over GAP insurance
This covers the gap or difference between the value of the vehicle before it was damaged and its value at the time you bought GAP cover.
It is often sold alongside motor finance to cover any difference between the amount paid out by a car insurance policy and the amount still to be repaid on the finance that was taken out to buy the vehicle.
But problems arise, says the FOS, when sellers aren’t clear to customers about the limitation of GAP insurance.
Explaining limitations of cover
Limitations include the fact that policies generally cover only the finance for the car and not any additional purchases such as insurance products and service plans, for example.
The FOS says it has also seen a number of cases in the past year where consumers have paid more for a car than the recommended retail price.
As this will not be reflected in the settlement of any claim, the consumer may find themselves out of pocket.
Also, consumers should be aware that while GAP insurance policies can last several years, they often provide no refund if they are cancelled early.
Find out more how GAP insurance works.
The FOS has also taken car insurance firms to task for being too quick to assume that vehicle thefts reported by customers are not genuine.
But FOS guidance states: "When we are considering a dispute like this, we expect the vehicle to have been thoroughly examined and the consumer to have had the opportunity to explain any perceived anomalies."
If a customer fails to disclose material facts before taking out a car insurance policy, such as convictions or vehicle modifications, an insurer can decline to pay out on any claim.
So before taking out any policy, it pays to be upfront.
But similarly, insurers have to ask sufficiently clear questions so a customer can disclose the right information.
Despite this, the FOS says it has continued to see cases where insurers have not been clear.
This includes insurers asking customers about convictions, when they actually meant wanted to know about any fixed penalty points.
'Struggle for consumers'
Natalie Ceeney, chief ombudsman, said the past year had been a struggle for consumers.
"This year has been a struggle for many consumers, who've found themselves burdened by debt, besieged by claims companies and bewildered by the complexity of financial services," said Ceeney.
"This has made our work at the ombudsman service more challenging – but more crucial – than ever before.
"I believe there is something we can all learn from what we've seen this year – to help prevent future problems and complaints.
"What has gone wrong in the past doesn't need to happen again – as long as we remember that complaints are about real people, not numbers, and that complaint-handling is about customer service, not box ticking."