Not upheld: unfair pricing / premium increase complaint against Great Lakes Insurance UK Limited

Decision detail

Summary

Mr and Mrs M complained that their home insurance premium was unfairly increased from approximately £500 to £800 at renewal and that Great Lakes did not adequately explain the reasons for the large increase. Great Lakes explained that the increase was due to industry-wide factors including increased building material and labour costs, higher numbers of water damage claims, and changes to its pricing models. The ombudsman found that Great Lakes had calculated the premium correctly, applied the same pricing to Mr and Mrs M as to other customers with similar circumstances, and provided a reasonable high-level explanation of the generic factors driving the increase. The complaint was not upheld.

The Ombudsman's reasoning

The ombudsman's role in pricing complaints is to determine whether the firm treated the customer the same as any other customer with similar circumstances, not to judge whether a price is cheap or expensive. The ombudsman verified that Great Lakes' calculations were correct and that Mr and Mrs M were charged the same as other customers in similar circumstances. Since Mr and Mrs M's personal circumstances had not changed, the increase must be attributable to generic industry factors, which Great Lakes had explained at a high level. The fact that comparison websites showed similar quotes from other insurers supported Great Lakes' explanation that the increases were industry-wide.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website