The Financial Conduct Authority (FCA) is concerned that as pressure builds on household budgets, some customers may cut-back on the insurance they need, thus leaving them without protection.
Despite the announced Government support to consumers and businesses to help tackle mounting energy costs – some people may still consider cutting back on insurance cover.
The FCA is taking action to support these households by writing to insurance industry CEOs, making sure that their customers are protected from unnecessary add-ons and unfair penalties.
Sheldon Mills, executive director, consumers and competition at the FCA, said: “Firms should not unfairly penalise them for any payment difficulties but instead work with them to find solutions.”
The FCA outlined ways in which firms can help customers in financial difficulty.
Some of these methods include: reassessing a customers’ needs, providing clear information to consumers about the additional cost of premium finance, working with customers to avoid the need to cancel necessary cover and considering whether cancellation fees should be removed for customers in financial difficulty.
Mills added: “Customers who are struggling with their finances should contact their providers as soon as possible.”
“We have a thriving and efficient insurance sector, and we want people getting the cover they need at a cost they can afford so both business and customers benefit.”
