Context
The FCA has updated its expectations of insurers in relation to flood and storm claims during the Covid-19 pandemic with the ongoing pandemic providing presenting operational challenges to firms when managing claims involving floods and storms.
Key points to note
- The FCA has taken this opportunity to remind firms that it is essential to have plans in place to manage the operational impact of the pandemic which includes having sufficiently robust plans to continue to operate effectively which include the following:
- Assessing the impact of the pandemic on the claims process and adjusting if necessary taking into account the impact of lockdowns and other coronavirus-related restrictions on service providers’ ability to access and carry out work in affected areas, and the availability of alternative accommodation where needed.
- Carrying out reviews of capacity and resources of the supply chain, and of third parties who handle claims for the insurer.
- Customers affected by damage caused by floods and storms may require immediate assistance. This means it is critical that they can contact their insurer quickly and speak to staff who are able to deal with their claim. The FCA has seen instances of staff being cross trained to assist with this.
- Firms should ensure they are able to respond to customers appropriately, including customers they have identified, or who identify themselves, as vulnerable. In doing so, firms should also recognise that some customers may be facing financial difficulty because of the pandemic. This may affect their ability to pay for any immediate costs, such as paying for alternative accommodation or replacement items, while their insurance claim is being processed.
- As with all claims, and regardless of the challenges from the pandemic, the FCA expects firms to handle storm and flood claims promptly and fairly, ensuring that customers do not face barriers or delays when making a claim. Firms should provide customers with clear communications about the information they need to support their claim. Firms should also keep customers informed on progress, including timeframes for any work to be carried out and settlement payments made.
- Insurers hold regulatory responsibility for the claims process and outcomes, including when they delegate the handling of claims to a third party. They must maintain appropriate oversight of these arrangements to ensure that their outsourcing relationships are meeting the insurer’s regulatory obligations.