Direct Line admits to error in implementing new rules
A major car insurer in the UK, Direct Line, has announced that it will pay out £30 million in compensation to customers who were wrongly overcharged on their policy renewals. The company has admitted to mistakenly implementing new rules introduced by the Financial Conduct Authority (FCA) earlier this year. These rules prevent insurance customers from being quoted higher prices upon renewal compared to what a new customer would be offered. However, Direct Line's error resulted in existing customers being charged more on their renewals than they would have been if they were new customers.
Review of past policies underway
Direct Line has initiated a review of its previous policies to determine the extent of the impact. While it is currently unclear how many customers have been affected, the insurer estimates that £30 million will be issued in compensation. Direct Line is also expected to provide information regarding the average compensation payment in the near future. Impacted customers will be contacted directly by the company.
Insurance premiums increased in 2023
In 2023, Direct Line raised the prices of its motor and home insurance policies due to skyrocketing claims costs. The average motor renewal premium saw a significant year-on-year increase of 19% at the beginning of the year.
How to make a complaint about insurance claims
If you have a complaint regarding insurance claims, insurers are required to have a written complaints process in place. You should be able to find this information on their website. If not, you can request them to send it to you. It is advisable to file your complaint as soon as possible, ensuring you provide as much evidence as you can to strengthen your case. The firm is obligated to respond within eight weeks. If you do not receive a response within this timeframe or are dissatisfied with the one received, you can escalate your complaint to the free Financial Ombudsman Service.
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