Motor vehicle insurance: Complaints against insurers are skyrocketing

Arbitration board at the limit

Complaints against insurers are skyrocketing

The insurance ombudsman mediates in disputes between insurers and customers. They currently have to prepare for longer processing times.

The number of complaints about insurers is pushing the arbitration board to its personnel and financial limits. In the first six months of the year, the insurance ombudsman received over 50 percent more complaints than in the same period last year.

In previous years, the arbitration board had already recorded new record levels of complaints received: After a total of 21,548 complaints reached the insurance ombudsman in 2024, the number rose to 28,904 last year.

The renewed increase in complaints is causing problems for the arbitration board. “The arbitration board is busier than ever since it was founded 25 years ago,” the association said. This also has an impact on the duration of the procedure. While this was an average of 77.6 days last year, the ombudsman is currently asking for your understanding on its homepage that longer processing times may occur. Questions about the processing status should be avoided.

There are various reasons for the increasing number of complaints. The arbitration board itself sees the increase as being due to the growing popularity of the arbitration service. The greater acceptance of such arbitration proceedings can also be seen in the increasing number of cases at other ombudsman offices.

However, insurers themselves are also contributing to the growing number of complaints. The main cause of trouble was the slow processing of claims, particularly in motor vehicle insurance. Even the Federal Financial Supervisory Authority (Bafin) felt compelled to react. In the spring of last year, she warned insurers to process benefit applications within one month. In addition to motor vehicle insurance, the ombudsman also received a particularly large number of complaints about legal protection and life insurance last year.

In order to cope with the high volume of complaints, significant investments have already been made in personnel, organization and Digitalization made, the association further announced. Now, however, the financing must be adjusted to the permanently increased number of complaints. In concrete terms, this means: The arbitration board needs more money from the insurers.

The insurance ombudsman is financed by the annual contributions of its members, the insurance companies. The amount of contributions to be paid is based on the insurer’s income. In addition, they pay a flat rate per case for each admissible complaint. However, for policyholders who complain, the process is free and is an alternative to resolving disputes without having to go to court.

The complaints are often successful. In around half of the cases last year, the arbitration board managed to improve the position of the insured vis-à-vis the insurer. However, only decisions up to an amount of 10,000 euros are binding for the insurer. If the amounts involved are higher, the insurer is free to follow the arbitration board’s suggestion. Then the insured may have to go to court.