The FCA is planning to update its guidance, introduced during the Covid-19 pandemic, to provide more support to insurance customers facing financial difficulty.
The work is part of the FCA’s efforts work to help protect customers during the cost of living crisis.
The guidance will help provide information to firms about how they should support struggling customers, not just those facing problems due to the pandemic, the FCA said.
One options for insurers might be to encourage hard-pressed customers to switch to a different product which is more suitable for customers facing financial difficulties.
Insurers may also be encouraged to considering waiving cancellation and other fees associated with adjusting customers’ policies.
Sheldon Mills, executive director, consumers and competition at the FCA, said: “Access to insurance is vital, providing peace of mind and security in case things go wrong.
“By extending our guidance we are helping consumers keep that safety net, and ensure they’re properly supported when they claim, even as the cost of living increases.”
The FCA has already urged insurers and brokers to treat customers fairly by not undervaluing insured items and charging unnecessary add-ons and unfair penalties, such as increased interest for those facing financial difficulty.
