Motor Insurance Complaints Jumped 46 Percent as Insurers Delay and Undervalue Claims

Complaints about car and motorcycle insurance rose 46% in a single year, according to the latest figures from the Financial Ombudsman Service. The service received 4,100 motor insurance complaints between April and June 2026, up from 2,800 in the same three months of 2025, with drivers citing disputed claim values, unexpected policy cancellations and long delays in getting a claim paid out.

The rise comes at a time when insurers are paying out more than ever, £3.2 billion in the second quarter of 2026 alone, a record for the industry. That combination, record payouts alongside a record rise in complaints, points to a widening gap between what insurers are settling on paper and what policyholders actually feel they have received.

What Drivers Are Actually Complaining About

The Financial Ombudsman’s own breakdown names three specific issues driving the increase: the value insurers place on a vehicle when settling a claim, cancellations of policies that catch drivers by surprise, and delays in getting a claim resolved at all. None of these are new complaints in isolation, but the scale of the rise within just 12 months suggests something has shifted in how claims are being handled, not just how many claims are being made.

Car and motorcycle insurance was not the only line seeing a rise. Travel insurance complaints climbed 30% year on year to 1,300 cases, which the Ombudsman links partly to disruption from the conflict in the Middle East, with declined claims the most common issue there too. Across the Ombudsman’s entire caseload, current accounts remained the single most complained about product, driven largely by fraud and scam cases, but the size of the rise in motor insurance complaints is striking against a backdrop where overall complaint volumes actually fell compared with the previous year.

Why the Overall Numbers Can Mislead

It would be easy to read a falling total caseload, 53,600 complaints in the quarter versus 68,000 a year earlier, as a sign things are improving. But that year-on-year drop is almost entirely explained by the closure of the separate motor finance commission complaints wave, which is currently paused pending legal challenges to the FCA’s redress scheme. Strip that category out, and the underlying uphold rate across all products was 30%, little changed, while motor insurance complaints specifically were still climbing.

There has also been a real shift in who is bringing these complaints. Professional representatives, claims companies and solicitors who take a cut of any payout, accounted for just 3% of the Ombudsman’s total caseload this quarter, down from a much larger share the year before. More drivers are going to the free service directly rather than paying someone else to do it, which means the rise in motor insurance complaints reflects real policyholders raising real problems, not a wave of claims-farming activity inflating the numbers.

The Financial Ombudsman Is Getting Faster

One piece of good news for anyone with an open complaint: the Ombudsman closed 51% of cases within three months of an investigation starting in the second quarter of 2026, up from 46% in the same period a year earlier. The service is midway through what it describes as the biggest operational transformation of its 25-year history, working alongside the FCA to modernise how cases are handled.

Speed is not a small detail here: an unresolved motor insurance dispute is rarely a minor inconvenience. A driver waiting on a delayed claim payout could be without a replacement vehicle, unable to get to work, or covering a hire car bill out of pocket while the case drags on. A driver disputing an insurer’s valuation of a written-off car is often trying to replace a vehicle they can no longer afford at the price the insurer has offered.

What a Complaint Actually Looks Like

Take a typical example the Ombudsman flags as common: a driver’s car is written off after a collision, and the insurer offers a settlement figure the driver believes is hundreds of pounds below what it would cost to buy an equivalent replacement vehicle locally. Under FCA rules, insurers are required to use fair market value, generally based on trade guides and local advertised prices, not the cheapest example they can locate nationally or a heavily discounted trade price.

Another recurring pattern involves policies cancelled mid-term over a disclosure issue the driver was not aware of, sometimes a modification made by a previous owner, or a minor conviction the driver did not realise needed reporting. Insurers are entitled to cancel policies where information has clearly been withheld, but the Ombudsman has repeatedly found cases where the omission was innocent or immaterial to the risk, and the cancellation still went ahead regardless, sometimes leaving the driver without valid cover and unaware until they tried to make a claim.

How to Complain and Get a Faster Result

Start with your insurer directly. Every insurer has a formal complaints process, and by law it must issue a final response within eight weeks. If you have not had a resolution, or you disagree with what you have been offered, you can then take the complaint to the Financial Ombudsman Service for free. There is no need to pay a claims management company or solicitor to do this on your behalf; the Ombudsman’s process is designed for consumers to use directly, and using a paid representative simply reduces whatever compensation you are awarded at the end of the process.

If your dispute is about a vehicle valuation, gather independent evidence before you complain, screenshots of similar vehicles for sale locally, service history, and any modifications or condition details the insurer’s own valuation could have missed or discounted. If your complaint is about a cancelled policy, ask your insurer in writing exactly which policy term you are alleged to have broken and request the evidence they used to reach that decision; insurers are required to give you this if asked.

Keep a written record of every call and email, including dates, times and the name of whoever you spoke to. If your complaint involves a delay, note down the specific dates you were told to expect an update and whether the insurer met them. This record becomes the evidence the Ombudsman will use if your case needs to be escalated, and it is often the difference between a complaint that gets resolved in weeks and one that drags on for months.

The eight-week window for an insurer’s final response is a hard legal deadline, not a target. If you have not heard back within that time, you do not have to wait any longer, you can go straight to the Financial Ombudsman Service even without a final response letter in hand. Note the date you first raised the complaint, as this is what the Ombudsman will use to check whether your insurer met its obligations.

For anyone who has already used a claims management company for a previous motor insurance dispute and felt shortchanged by the fee taken, it is worth knowing that any future complaint, including this new wave linked to claim values, cancellations and delays, can be brought entirely without one. The Ombudsman’s process involves filling in a form, describing what happened and what outcome you want, and submitting supporting documents. There is no requirement for legal training or representation, and cases are decided on fairness, not on how the argument is presented. Free, independent guidance on filling in the form is also available from Citizens Advice if you are unsure how to describe your complaint clearly. The service can also advise on which supporting evidence carries the most influence in valuation and delay disputes, which helps avoid a case stalling when key documents were missing from the first submission.

Sources:

• Financial Ombudsman Service: 53,600 cases in the first quarter of 2026/27
• Financial Ombudsman Service: Quarterly complaints data Q1 2026/27
• Insurance Times: Motor insurance payouts hit record £3.2bn in second quarter