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Complaining to the Financial Ombudsman about your insurance company

If you’re unhappy with anything to do with your car insurance, you should take the complaint to your insurer before anyone else. But if you don’t think their response is satisfactory, you could take your complaint to the Financial Ombudsman Service, which is committed to resolving disputes in a fair and impartial way.

Although the vast majority of motorists never complain about their car insurance, the UK car insurance ombudsman still deals with thousands of complaints every year.

Make sure you carefully compare what’s covered by car insurance policies before you decide on taking one out.

That way, you hopefully avoid disappointment and potential disputes further down the line. After all, policies vary a lot – both in what they cover, and in their terms and conditions.

But if you have a dispute with your insurance company, here's how you go about making a complaint.

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Where to start with car insurance complaints

The first step is to complain to your car insurance company directly. Often, disputes with your insurer might be sorted without needing to escalate any further. This could save you a lot of time and hassle.

Most insurance companies record their calls, so keep a note of the date and time you called, as well as who you spoke to. This could help should you need to take the matter to the Ombudsman.

If that fails, you could then write a letter of complaint to the insurance company. Most insurers should have a formal complaints procedure that they must follow. Make it clear in your letter that you're making a formal complaint, and give evidence to support your complaint.

It might be worth mentioning that you plan on taking the matter to the Financial Ombudsman if the matter isn't settled satisfactorily. 

Who can I contact to complain about an insurance company?

If you have a complaint about an insurance company or claim, you could lodge it with the Financial Ombudsman Service.

You can contact the ombudsman about complaints by email: complaint.info@financial-ombudsman.org.uk. They also offer a helpline service between 8am and 5pm, Monday to Friday: 0800 023 4567.

How to make a complaint to the insurance ombudsman

You should give the insurer a chance to sort the issue out first before you complain to the ombudsman.

The insurer must usually respond to your complaint within eight weeks. If you’re still unhappy, you could take the complaint to the ombudsman, but you must do this within six months of receiving the insurer’s final response.

You can make a complaint using the ombudsman’s helpline or through one of the ombudsman’s online forms.

What are my options if I'm not happy with the ombudsman’s decision?

The ombudsman’s decision is final and, if accepted by the consumer, should also be legally binding on both the insurer and the consumer.

Because the decisions are final, they can't be reviewed by another ombudsman.

As a public body, the ombudsman could be judicially reviewed by the courts. This would generally focus on the way the ombudsman arrived at its decision, rather than the facts and merits of the case itself.

Using a small claims court

If you're unhappy with the decision the ombudsman has made, you could take the matter to small claims court. You can use the GOV.UK tool to find a court.

But be warned, this could be expensive, as there are likely to be additional legal costs. And, whereas the Financial Ombudsman's decision is based on the Financial Conduct Authority (FCA)'s regulations, a court would likely only look at whether any laws were broken.

Think carefully before you go down this route - it could be worth getting independent legal advice before you take any action. 

Common car insurance complaints

In 2020/21, the Financial Ombudsman received nearly 11,000 car insurance complaints. And, while every complaint is unique, there are likely to be common themes. Here are some common complaints made to the Financial Ombudsman.

Car repair complaints

The financial ombudsman says that many of the complaints it receives are from customers who are unhappy about how their insurer has dealt with repairing a vehicle after an accident.

Complaints typically include:

  • Delays to repairs

  • The quality of the work carried out

  • Further damage caused during repair

  • Lack of a courtesy vehicle

  • The decision to repair instead of writing-off the vehicle.

In this sort of complaint, the insurance ombudsman might want to look at evidence like photos, claim notes and engineers’ reports.

However, if something appears unclear, they may ask for additional evidence, including an independent expert view.

According to the ombudsman, customers and even insurers can sometimes be unclear about who's responsible for what’s gone wrong on a vehicle repair.

Working out who is responsible for the repair is key:

  • If repairs have been carried out by one of the insurer’s approved repairers or a repairer that they’ve told the customer to use, then the insurer is usually responsible

  • If the customer used their own garage, the ombudsman might look into whether the insurer made it clear that it wouldn’t be responsible if anything went wrong.

  • If an insurer didn’t make this clear enough, then the ombudsman may decide that they’re responsible anyway. The same goes for if the insurer did something to take control of the repair.

Generally, if your policy says the insurer will arrange the repair, then they should be responsible for the quality of the work.

But if your policy simply offers to reimburse you for the cost of the repair and you arrange that repair, then the insurer isn't responsible if the work is below par.

So, it’s important to read through the small print of the policy document and ensure you're familiar with who's responsible for carrying out repairs – you or the insurer.

When you’re comparing car insurance quotes from different insurers, you should check how long they guarantee repairs for, as it does vary.

Car valuation complaints

Complaints about valuations or how a vehicle was written off are some of the most common disputes the ombudsman deals with.

The ombudsman says most complaints in this area involve disagreements about the market value of the vehicle.

In other words, the price a car would’ve fetched through a reputable dealership just before it was damaged or stolen.

Insurers declare a car a ‘total loss’, or what’s known as a write-off, when it’s not worth repairing.

Many drivers wrongly believe that they can claim the amount their car was originally worth, rather than what it was worth at the time of the accident.

However, you could protect the shortfall between what the car was worth just before the accident and the original value with what’s known as ‘gap insurance’.

You might want to take out this cover if you paid a lot for your vehicle, or to cover the finance payments for your car in the event of an accident.

For valuation complaints, the ombudsman tends to look at trade guides to find out what a vehicle might be worth.

They may also ask you for independent engineer or expert reports. These reports could include:

  • Any details of modifications

  • Copies of valuations from the guides or other sources

  • A repair estimate

  • Evidence of pre-existing damage and what it would cost to repair it

  • Information on the vehicle’s history.

According to the UK insurance ombudsman, many complaints in this category arise because the insurer or the customer has made a mistake.

In other words, the valuation that’s being disputed is based on the wrong details. So it’s vital that the insurer records the vehicle’s details correctly.

If the ombudsman believes the customer is out of pocket due to the insurer’s mistake, then it’s up to the insurer to put things right.

If they think the insurer’s valuation is unfair, they usually tell them to increase it and add 8% interest to the adjusted figures.

Where the car insurance ombudsman believes a vehicle has been scrapped without the owner’s permission, it might tell insurers to compensate the owner for any distress or inconvenience.

And for any items that were inside a car when it was scrapped, if they weren’t removed.

If you think your insurer has provided a low valuation offer, you could challenge it. For more information, check out our guide on car depreciation.

Misrepresentation and ‘non-disclosure'

Sometimes an insurer will refuse to pay out on a claim because it says the owner misrepresented information when they took out the policy or failed to disclose something important.

“We see cases where consumers don’t disclose a modification made to their car – something which might affect the car’s risk profile, as well as the premium the insurer would have asked for had it known about the alteration.

We also see cases where consumers have changed their car mid-way through the policy term, but don’t update their insurer,” says the ombudsman.

The insurer may find something that they think suggests a customer misrepresented information when they took out a policy.

If so, they might say that they would have acted differently if the customer had provided true answers.

The insurer might then decline the claim. They may decide to alter the terms of the policy by retrospectively applying a restriction to it, settling a claim proportionately, or cancelling the policy altogether.

Complaints in this area frequently happen because customers say they didn’t misrepresent anything. People might feel that their insurer has treated them unfairly by either not meeting their claim or by altering the terms of their policy.

It’s then up to the ombudsman to decide if the insurer acted fairly when they decided there’d been a misrepresentation.

If a customer says they’ve been treated unfairly, the ombudsman will consider the insurer’s obligations under The Consumer Insurance Disclosure and Representations Act 2012

The insurance ombudsman will look at whether:

  • The questions the insurer asked when you took out the policy were clear and specific

  • The information you supplied to the insurer was accurate

  • The insurer would have acted differently, had it received accurate information

  • The insurer has been fair in its handling of the misrepresentation.

If you’re unsure about any questions the insurer asks you before you take out the policy, including what constitutes a modification, let them know that you need more information before taking out the policy. You should also make a note of the conversation.

Complaints regarding problems at renewal

An insurer may want to reject an insurance claim because a customer failed to disclose some important information.

If so, the insurer should be able to show that it asked the customer clear questions when they renewed the policy.

However, sometimes the onus is on the customer to let the insurer know about a change in their circumstances.

Like a driving conviction, for example. If you don’t let an insurer know about changes like this, you might fight that any future claim you make on a policy is refused.

Insurers often renew policies without asking customers any specific questions other than their credit card details. But you should be open and upfront about changes to your circumstances.

Check the policy booklet that was issued to you when you bought cover. It should explain what you should tell your insurer and when.

And when it comes to your car insurance renewal, it’s best to be upfront about changes to your circumstances, including any driving convictions. 

Complaints about fault claims and no-claims bonus

A 'fault claim’ is any claim where the insurer has paid out to the policyholder or to a third party, but hasn’t been able to recoup the costs.

It doesn’t have anything to do with who was at fault in an accident that led to a claim. It's just based on whether the losses can be recovered.

But having one of these on your records could mean you will lose your no-claims bonus and face higher insurance premiums.

Many customers contact the car insurance ombudsman because they’re confused about why a fault claim has been put on their records, when an accident wasn't their fault.

“They’re usually unhappy because they’ve lost their no-claims bonus or no-claims discount, or because their premiums have increased,” says the ombudsman.

Because no-claims bonuses and the way they are applied varies between insurers, every case has to be considered individually.

Common types of complaints about fault claims include:

  • When someone has lost their no-claims bonus or had a fault claim recorded, but they say the accident wasn’t their fault

  • When a customer’s premiums increase despite having no-claims bonus protection

  • When a policyholder has reported a minor accident without making a claim, but they still see their premiums increase

  • When a customer thought their no-claims bonus could be used on more than one policy at a time

  • When someone didn’t know their insurer applied a maximum limit of no-claims bonus.

Sometimes motorists think they have a certain amount of no-claims bonus but when they move to another insurance company, it turns out to be less than they thought.

Make sure to check with your insurer to find out how they look at named driver no-claims bonus before you shop around for a new deal.

When there’s been a misunderstanding or confusion about fault claims and no-claims bonuses, the ombudsman will look at the policy terms. They’ll think about how the insurer highlighted this information to the customer when the policy was sold.

The ombudsman may also look at whether the sales process was unclear and how this may have affected the customer.