Why Drivers Are Ditching Claims Firms to Fight Insurers Themselves

Car and motorcycle insurance complaints reaching the Financial Ombudsman Service climbed to 4,100 in the second quarter of this year, up from 2,800 in the same three months of 2025, new data shows. At the same time, the share of drivers paying a claims management company to fight that complaint for them has collapsed.

Figures published by the Financial Ombudsman on 22 July show 53,600 complaints landed across all financial products between April and June 2026, with car and motorcycle insurance one of the fastest-growing categories. Consumers are raising concerns about claim values, policy cancellations and claim delays, according to the Ombudsman’s own breakdown of the complaints.

Why complaints keep climbing

The 4,100 motor insurance complaints in the latest quarter follow 4,000 in January to March 2026 and 2,800 in the same period last year, a rise of 46% year on year. Across every product the Ombudsman tracks, motor insurance is now one of the five most complained about, sitting behind current accounts, credit cards and hire purchase but ahead of electronic money accounts.

James Dipple-Johnstone, interim chief ombudsman at the Financial Ombudsman Service, said the data highlights “the wide range of issues people are bringing to us, from everyday banking to fraud and scams, and insurance complaints,” as the service works through the biggest transformation to its operations in its 25-year history, alongside the Financial Conduct Authority and government.

The claims firms taking a cut of your payout

The most striking shift in the data has nothing to do with insurers at all. A year ago, professional representatives and claims management companies handled 45% of all complaints referred to the Ombudsman. In the latest quarter that figure has fallen to just 10%, with professional representatives alone now accounting for only 3% of the total caseload.

That shift tells its own story. Using a claims management company to bring a complaint is never free. These firms typically take a percentage of any redress awarded, sometimes a large one, for work a driver can do without paying anyone a penny. The Ombudsman’s own service is free to use directly, and the shift in the data suggests more drivers are working that out for themselves rather than signing away part of a settlement before they have even made a claim.

The drop has been sharp rather than gradual. Total representative involvement across all complaint types stood at 45% in the first quarter of 2025/26, fell to 21% by the second quarter, then to 12% and 9% across the following two quarters, before settling at 10% now. Professional representatives, the firms that charge a fee, account for barely 1,800 of the roughly 55,000 cases logged this quarter.

What a professional representative actually charges

Claims management companies must be authorised by the Financial Conduct Authority to operate legally, and the FCA caps the percentage they can take from certain types of redress, but no cap applies uniformly across every product they handle. Drivers who sign up with a representative often only see the size of the deduction once the payout arrives, by which point they have already handed over the correspondence and evidence a free direct complaint would have needed anyway. Checking a firm’s FCA registration and asking upfront exactly what percentage it takes, in writing, before signing anything remains the simplest way to avoid an unpleasant surprise.

What is driving the complaints themselves

Claim values are the single biggest source of friction. Drivers who have a car written off or repaired after an accident are increasingly challenging what the insurer says the vehicle, or the repair, is worth, a dispute that has grown alongside rising repair costs and a used car market where prices for popular models have moved quickly in the past year. Policy cancellations and delays getting a claim settled make up most of the remaining complaints, with the Ombudsman’s data showing an uphold rate across all products, excluding motor finance commission cases, of 30% for the quarter.

Travel insurance complaints rose even faster in percentage terms, up 30% year on year to 1,300 cases, largely linked to declined claims following travel disruption from the conflict in the Middle East, showing that insurers across several product lines are facing more pushback from customers than they were twelve months ago. The Ombudsman is also resolving cases faster than it was: 51% of complaints closed within three months of an investigation starting in April to June 2026, up from 46% in the same period last year.

Motor finance commission cases continue to distort the headline figures for the service as a whole. The Ombudsman cannot progress many of these cases until legal challenges around historic commission arrangements are resolved, though it has been able to close some where no discretion was afforded to the broker over the commission paid, or where little or no interest was charged on the loan. Stripping those cases out, the underlying uphold rate across every other product, including motor insurance, shows more clearly how often ordinary complaints succeed.

How to complain without paying anyone a cut

Anyone unhappy with how an insurer has handled a motor claim should complain directly to the insurer first, in writing, and ask for it to be logged as a formal complaint. Insurers have up to eight weeks to send a final response. If that deadline passes with no answer, or the response does not resolve the issue, the complaint can go to the Financial Ombudsman Service free of charge, without a claims management company or solicitor acting as a middleman.

Complaints must reach the Ombudsman within six months of the insurer’s final response letter. The service can be contacted on 0800 023 4567 or through its website, and it will ask for the same detail a claims firm would want: the policy number, dates, correspondence with the insurer and any evidence supporting the claim, such as photographs, repair quotes or independent valuations. With professional representatives now handling only 3% of cases, the data suggests most drivers who go it alone are managing the process without needing to hand over part of any money the Ombudsman eventually awards.

Keeping a simple written timeline of every call, email and letter exchanged with the insurer from the moment a claim is filed makes the strongest foundation for either a direct complaint or, if it comes to it, a free referral to the Ombudsman months down the line. A driver who keeps that record from day one rarely needs to pay someone else to reconstruct it later.

None of this means every claims management company acts in bad faith, and some drivers still prefer to hand a complex case to a specialist rather than manage it themselves. The point the Ombudsman’s own data makes is simpler: for a plain motor insurance dispute with clear evidence, going direct costs nothing extra and keeps the whole of any award in the driver’s own pocket. Drivers deciding whether to sign with a representative should ask themselves whether the case truly needs specialist legal argument, or whether it is simply a matter of gathering paperwork and telling the story in order, something the free service is built to handle either way.

Sources:

• Financial Ombudsman Service: 53,600 cases in the first quarter of 2026/27
• Financial Ombudsman Service: motor insurance complaints guidance
• Motoring Chronicle: how to win a motor insurance complaint as ombudsman cases hit a five-year high
• Motoring Chronicle: some insurers have raised car insurance prices by nearly 12 percent this year