FSA urges clearer insurance policies

18th October, 2005

The Financial Services Authority (FSA) is urging insurance companies to ensure that their policies are consumer friendly and easy to understand.

A recent survey looked at over one hundred types of insurance policies, ranging from home, motor and general insurance, and discovered that 'many initial disclosure' policies did not comply with FSA rules.

It showed that there were problems in a number of key areas, with insurance policies sometimes difficult to read and understand, information such as the cancellation period 'frequently omitted', and some wording too complex to digest properly.

Clive Briault, FSA managing director of retail markets, said: 'Many initial disclosure documents reviewed were not fully in line with our requirements and some contained errors that could potentially mislead customers.'

When taking out a home insurance policy, it is important that the consumer understands the product that they are buying.

This will ensure that the appropriate and desired amount of cover is purchased, and that consumers are aware when their home insurance starts and ends, not leaving them exposed to loss.

 

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