Drivers are being exploited by multiple car insurance claims failings as insurers are told to get their acts together. The Financial Conduct Authority has raised concerns over car insurance claims processes. Insurers have been told by the Financial Conduct Authority (FCA) to improve their claims handling, following “concerning” evidence of poor practices in some cases. The regulator said that, while rising motor insurance premiums are largely driven by external cost pressures, shortcomings persist in how some insurers handle claims. Sarah Pritchard, the FCA's deputy chief executive, warned that while external pressures explain premium increases, insurers must ensure customers receive proper treatment during claims processes. READ MORE NatWest makes 'first of its kind' change with over one million set to benefit An in-depth analysis by the financial regulator has revealed that motor insurance claims costs soared by £2.3 billion between 2019 and 2023—a 34 per cent increase across the industry. The bulk of this rise—nearly two-thirds—was driven by a sharp escalation in vehicle repair and accidental damage claims, which together added around £1.5 billion to insurers’ costs. The increasing complexity and value of modern vehicles have made repairs significantly more expensive, with average insured vehicle values rising by 42 per cent and repair labour costs climbing 43 per cent over the same period. The situation was further exacerbated by a dramatic 79 per cent surge in theft-related claims, placing additional strain on insurers already contending with higher expenses for courtesy vehicles and a growing number of cases involving uninsured drivers. The Financial Conduct Authority (FCA) also highlighted inefficiencies within the claims process. Payments to credit hire companies and claims management firms were found to be contributing to both rising costs and delays in claims handling. More concerningly, the regulator identified widespread shortcomings in the oversight of third-party claims handlers. These failings resulted in poor customer service, slow processing times, and a noticeable increase in consumer complaints. The FCA’s findings underscore the urgent need for stronger oversight and reform in the motor insurance sector, as rising costs and operational inefficiencies continue to undermine both insurer performance and consumer confidence.