Money Wellness
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calendar icon30 Jun 2023

Are you inline for a Direct Line payout?

The Financial Conduit Authority (FCA) has ordered Direct Line to go back through the past five years of vehicle insurance claims. This comes after the insurer admitted it had underpaid some car and van insurance customers when their vehicles were scrapped.

Direct Line, one of the UK’s largest insurers with five million customers, said it’s working to identify everyone affected between September 2017 and August 2022.

The move comes after the FCA announced in December last year it had seen evidence that certain motor insurance companies had been paying out lower than market value to customers.


What to do if you think you’ve been affected

You don’t need to do anything - Direct Line has said it’ll be in touch with any customers who have been affected.

But it insisted that only a minority of customer are likely to get compensation as the vast majority won’t have been impacted.

If you are one of the affected customers, you’ll receive compensation plus interest. We don’t yet know when or how much you’re likely to be paid.  


Making a complaint about your insurer

You should first check what you want to complain about is covered by your insurance policy.

If it is, write to your insurer explaining what you’re unhappy about and what you would like them to do about it. Send any letters by recorded delivery and keep a copy for your own records. Make sure you give your insurer time to respond.

If you’re not satisfied with your insurer’s reply, you can make a formal complaint using your insurer’s complaints process. To find out how the complaints process works, check your policy documents or your insurer’s website.

If you’re not satisfied with the outcome of the formal complaint, you could take further action with the help of the Financial Ombudsman Service.


How the Financial Ombudsman Service can help?

All insurers are regulated by financial watchdog the FCA. This means if you have a complaint about an insurer, you’re entitled to take it to the Financial Ombudsman Service. This is a free service that’s available to you if you’ve already followed your insurer’s complaints process.

The Financial Ombudsman Service uses mediation to sort out your complaint. If this doesn’t work, they will begin a formal investigation.

The final decision given at the end of the investigation is legally binding for your insurer, meaning they will have to stick to the decision made by the ombudsman.

If you disagree with the ombudsman’s findings, you’re entitled to take your case to court.

Court is costly and should be only used as a last resort. Also, bear in mind that the court will take into account any decision that’s already been made by the ombudsman.


How long do you have to make a complaint to the ombudsman?

You must take your complaint to the ombudsman within:

  • six months of receiving a final response from your insurer
  • six years of the event you’re complaining about or three years from when you knew, or should have reasonably known, you had a reason to complain

If you’re outside these limits, you can still refer a complaint to the ombudsman. They may choose to investigate your complaint if your insurer doesn’t object. If they do object because the time limit has passed, the ombudsman won’t get involved.

Avatar of Caroline Chell

Caroline Chell

Caroline has worked in financial communications for more than 10 years, writing content on subjects such as pensions, mortgages, loans and credit cards, as well as stockbroking and investment advice.

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