Insurance firms must treat customers fairly, says regulator

Insurance firms are expected to show flexibility to customers as people alter their routines due to coronavirus, the City regulator has said.

The Financial Conduct Authority (FCA) said insurers must recognise the circumstances that customers may find themselves in.

This could mean, for example, working from home or taking their car to work rather than public transport.

It said the ability to make a claim should not be affected by circumstances over which people have little control.

Insurers should make sure any change in circumstances to comply with Government advice and requirements does not impact their customer’s current home contents or motor policy, the regulator said.

On its website, the FCA said: “We expect firms to consider very carefully the needs of their customers and show flexibility in their treatment of them.”

Christopher Woolard, interim chief executive of the FCA, said: “We have already seen some firms make significant efforts in difficult operating conditions. We expect all firms to be clear and not misleading whenever they communicate and be fair and professional in how they deal with their customers.

“Customer behaviour is changing. We expect insurance firms to recognise this and treat their customers fairly, recognising the circumstances customers may find themselves in. We would not expect to see a customer’s ability to claim affected by circumstances over which they have little control.

“Any customer concerned about their insurance should consider contacting their provider with any questions they may have.”

Here is a summary of information for consumers on the FCA’s website (more details are at www.fca.org.uk/consumers/insurance-and-coronavirus):

– Travel insurance – holidays booked before March 1 2020
In most cases, if you booked your travel or holiday before March 1 2020, and had travel insurance in place then, travel insurance providers will cover claims for cancellation or curtailment, depending on terms and conditions. Speak to your insurer.

– Booking a holiday
Anyone planning to travel should check Government advice. Speak to insurance providers and discuss the cover that will best suit your needs. There may be instances where cover is not available.

– My holiday has been cancelled
If your holiday is cancelled, and your provider is Abta or Atol protected, you should speak to your holiday provider directly about a refund or re-booking for another date.

If your holiday provider does not offer a refund or alternative, contact your travel insurance provider.

– My flight has been cancelled
The Civil Aviation Authority (CAA) has issued specific guidance about coronavirus with information if your flight has been delayed or cancelled. You should also read the section on compensation.

– Coronavirus exclusion
Some travel insurance policies bought before March 1 2020 did not have coronavirus as an exclusion. If you are trying to buy travel insurance today, you will need to speak to insurance providers and discuss the cover that will best suit your needs. There may be instances where cover is not available.

If your insurer has advised that coronavirus is not covered as part of your policy and you catch the virus while abroad, your travel insurance will not be valid. Speak to your insurer before travelling and ask what is and what is not covered.

– Renewing your travel insurance
If your travel insurance is due for renewal, contact your provider to discuss it in good time. It may be that, after renewal, the policy will no longer cover claims because of coronavirus.

– Self-isolation
Cover available for self-isolation (for example extended hotel accommodation) while travelling will vary depending on the policy. If you have to self-isolate due to coronavirus while you are travelling, contact your travel insurer.

– Motor and home insurance
Many people will be changing where they do certain activities and keep certain items. For example, people may need to use their home more as a work place and keep some work-related items at home. You may be concerned that this conflicts with the cover under your current policy.

The FCA expects insurers to take into account any change in a customer’s circumstances because of coronavirus (for example, working from home or driving to work). Insurers should ensure that any change in circumstances to comply with Government advice and requirements does not impact their customer’s current home contents or motor policy.

– Renewing your insurance policy
If your insurance is due for renewal, contact your insurer to discuss in good time. It may be that, after renewal, the policy will no longer cover claims due to coronavirus.

– Product suspension
The FCA is not able to prevent firms from removing or amending products from the market for new customers as it is a decision for individual insurers. If you are looking for insurance, try speaking directly to an insurer or broker and ensure you buy insurance that fits with your demands and needs.

– Unable to pay monthly premium
If for any reason, you are, or will be, in financial difficulty, contact your insurer in the first instance and explain your situation.