Insurers should be investigated over refusal to pay out for Covid-cancelled weddings, says watchdog

'We believe the financial regulator must investigate and take tough action if the firm is found to have broken the rules,' says Which?

 

Sophie Gallagher@scfgallagher
Thursday 20 August 2020 12:31
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A wedding insurance firm has been reported to the financial regulator, after Which? claims it “acted in bad faith” to deny payouts to people with cancelled weddings.

UK General Insurance, which is backed by insurer Great Lakes, and sells products through the WeddingPlans website – it is also the underwriter for wedding insurance at Debenhams and Dreamsavers – advised policyholders as late as March that they would get a pay out.

But payouts were later withheld, so the Financial Ombudsman and Financial Conduct Authority are now being asked to investigate by the consumer watchdog.

Jenny Ross, Which? money editor, said: “Our research suggests a pattern of UK General Insurance acting in bad faith to turn down claims, which is why we believe the financial regulator must investigate and take tough action if the firm is found to have broken the rules.”

Since the start of lockdown in March, thousands of weddings across the UK have been cancelled as venues were not permitted to host large numbers of guests and places of worship were closed.

It was only on Saturday 8 August that couples were allowed to have both a ceremony and a wedding reception again although the number of guests is still limited to a maximum of 30 people.

Which? said it has spoken to seven couples "battling to have their claim accepted" by UK General Insurance, including Lidia Szmid and Adam Burton.

The couple told Which? they bought a wedding insurance policy from WeddingPlan in March after receiving written confirmation that they would be covered if the government closed the venue due to coronavirus.

However, the couple’s £10,000 claim was later rejected and a Subject Access Request suggested employees thought the couple could be committing fraud, despite having informed the company of their situation in advance.

Szmid and Burton eventually received a payout but other couples in the same position have not, says Which?

Which? pointed out that the company’s website appeared to contradict decisions made. WeddingPlan reportedly shared online advice in March that it would cover cancellations caused by the “outbreak of a contagious and infectious disease” or venue closures by a “relevant authority”.

But Which? said it failed to disclose ambiguous clauses in its terms and conditions that claims would not be covered if related to “government regulations or acts” or “prohibitive regulations”, without clarifying who the “relevant authority” relates to.

Ms Ross continued: “The persistence of one bride who refused to be given the brush-off by a big insurance company produced a damning dossier of evidence exposing how the firm exploited unclear terms and conditions to avoid paying out on claims.”

UK General Insurance told Which? it is a distributor – not the insurer – and does not have the final say on whether a claim is paid to a couple.

A spokesperson said the decision whether to pay claims rests with the insurer, in this case Great Lakes, not the distributor.

UK General Insurance and Great Lakes said in a joint statement: “We acknowledge and regret the lack of clarity in some of the FAQs relating to coronavirus posted on our websites, but we have subsequently thoroughly reviewed the coverage position in respect of claims for wedding cancellations arising from the Covid-19 pandemic, and have republished FAQs and will continue to monitor these as the situation develops.”

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