From April to December 2014, 164 complaints were made to the ombudsman, down 5% compared with the same period in 2013. According to the ombudsman, the most common theme of customer complaints is confusion around the different types of GAP products that are sold, under what circumstances policies would pay out and any notable exclusion’s in the policy. Following the latest Financial Ombudsman Service data showing a drop in GAP insurance complaints; the ombudsman say more could be avoided with improved dealer / customer communication.
As the FCA considers its final remedies for the insurance add-ons market, taking the time to fully explain what policies cover, as well as the benefits of each product, will help boost transparency and customer satisfaction.
Head of outreach at the ombudsman Caroline Wells said: “We are urging dealers to take a little extra time to explain the product at the point of sale, or at the point of claim. Often it’s simply a question of explaining something in plain English, why exclusion is relevant in a policy for example. But, too often the people who contact us talk about a ‘computer says no’ approach, and that leads to understandable concern on the part of the policy holder.”
Insurance add-ons are an important income stream for dealers and latest ombudsman figures show that the vast majority are selling responsibly. However, dealers need to ensure their GAP insurance sales processes are fit for purpose and good communication needs to be at the heart of every transaction, particularly ahead of planned FCA rule changes expected later this year.
The FCA’s consultation on proposed remedies for the sale of GAP insurance and add-ons market closed in March. The regulator is set to announce its final remedies in June, ahead of implementation in September 2015.