Scheme coming to compare insurance products

March 11, 2016 6:12 am

There was news recently that around one in five home insurance claims are unsuccessful. The most common reason for this is the complexity of policies – and this is a key factor for people turning to us when they need help with their insurance claim.

It is often just too difficult for policyholders to understand the finer details of their insurance cover, which is why professional help from a loss assessor can make all the difference. This is in stark contrast to car and travel insurance, which are far simpler products and therefore have much higher success rates – and therefore less need for expert help.

But it’s also difficult for consumers to find the right product at the right price in the first place. So it was good to read last week that the Financial Conduct Authority is launching a pilot scheme to help consumers compare insurance firms. We wrote about the possibility of this last year: it was proposed because a study showed that many of us are over-paying for our insurance.

The pilot scheme, which starts in the summer, will compare insurance firms based on a scorecard system showing how often people are likely to make a claim on a product, how likely the claims are to be accepted and the average payout. Data will be published at the beginning and the end of the pilot, which is going to last for 12 months.

It’s not clear yet exactly which products are going to be included in this initial phase. But if it’s successful it will be rolled out more widely, which will mean that we’ll all be able to shop around for home, car and travel insurance based on solid claims data.