Why Mortgage Brokers Must Take Ownership of Home Insurance: Lessons from Which?’s Super-Complaint to the FCA

Introduction: A Wake-Up Call for the Industry

The mortgage market has always been about trust. Customers rely on brokers to guide them through one of the most significant financial decisions of their lives. Yet, recent findings from Which? and its subsequent super-complaint to the Financial Conduct Authority (FCA) have exposed systemic failings in the home insurance sector, failings that directly impact homeowners and by extension, mortgage brokers.

This isn’t just an insurance problem. It’s a consumer protection issue, a regulatory challenge and a reputational risk for brokers who overlook the importance of comprehensive home protection. The question is no longer should mortgage brokers write home insurance?, it’s how quickly can they integrate it into their service model?

The Findings: A Market That’s Failing Consumers

Which?’s investigation into home insurance claims revealed troubling statistics:

• Buildings insurance claims acceptance rate: 63%
• Combined buildings and contents: 72%
• Motor insurance acceptance rate: 99% (for comparison)

These figures highlight a stark disparity. While motor insurance claims are almost universally honoured, home insurance claims are far more likely to be rejected. Why? Which? points to opaque policy wording, hidden exclusions, and poor claims handling as key culprits.

Consumers often discover these exclusions only after disaster strikes, when they’re financially vulnerable and emotionally stressed. Which? documented cases where homeowners were left worse off after the claims process than before the incident. This is not just a failure of product design; it’s a failure of duty.

The FCA Super-Complaint: What It Means

The Which? super-complaint urges the FCA to investigate whether insurers are breaching Consumer Duty principles, which require firms to deliver good outcomes for retail customers. The FCA has signalled that it will review claims practices and may launch a market study into home insurance.

For brokers, this regulatory spotlight is significant. It means:

• Greater scrutiny on product suitability
• Potential enforcement actions against poor practices
• Heightened expectations for transparency and fairness

Mortgage brokers who proactively manage home insurance will not only protect clients—they’ll demonstrate compliance and leadership in a changing regulatory landscape.

Why Mortgage Advisers Should Care

Home insurance is often treated as an afterthought, a tick-box exercise to satisfy lender requirements, but in reality, it’s a cornerstone of financial security. When claims fail, customers face:

• Unexpected repair costs that can derail mortgage affordability
• Stress and distrust, eroding confidence in advisers who recommended the policy
• Legal and financial exposure, especially if the property becomes uninhabitable

As trusted brokers, you are uniquely positioned to bridge the gap between policy complexity and consumer understanding and by actively writing home insurance, you can:

• Ensure suitability: Tailor cover to the property and customer needs, reducing the risk of exclusions.
• Educate clients: Explain key terms upfront, fulfilling Consumer Duty obligations.
• Protect relationships: Deliver a holistic service that safeguards both the mortgage and the home.

The Business Case for Advisers

Far from being an administrative burden, writing home insurance is a strategic opportunity:

• Deepen customer trust: Position yourself as a comprehensive financial protector.
• Drive revenue: Home insurance adds a recurring income stream.
• Differentiate your service: In a market where Which? has exposed systemic failings, brokers who take ownership stand out.

Consider this: customers who experience a rejected claim are not just dissatisfied, they’re likely to share their experience widely. In an era of online reviews and social media, reputational risk is real. Conversely, brokers who deliver robust protection become advocates for consumer well-being, strengthening loyalty and referrals.

Consumer Duty and Adviser Responsibility

The FCA’s Consumer Duty sets a clear expectation: firms must act to deliver good outcomes for retail customers. This includes:

• Products and services that meet needs
• Clear communication
• Support throughout the lifecycle

Mortgage brokers who ignore home insurance risk falling short on these principles. By integrating insurance advice into the mortgage process, advisers can:

• Identify gaps in cover
• Clarify exclusions before purchase
• Provide ongoing support for claims

This isn’t just good practice, it’s regulatory alignment.

Practical Steps for Brokers

So, how can mortgage brokers take ownership of home insurance effectively?

1. Partner with reputable insurers
   Choose providers with strong claims records and transparent policy wording.
2. Invest in training
   Ensure your team understands the nuances of home insurance, from flood risk to accidental damage cover.
3. Embed insurance into the mortgage journey
   Don’t treat it as an add-on, make it part of the conversation from day one.
4. Leverage technology
   Use digital tools to compare policies, highlight exclusions and streamline applications.
5. Monitor outcomes
   Track claims experiences and client feedback to ensure continuous improvement.

Looking Ahead: A Changing Landscape

The Which? super-complaint is likely the beginning, not the end, of regulatory intervention in home insurance. Brokers who act now will be ahead of the curve, positioning themselves as consumer champions in a market under scrutiny.

The message is clear: home insurance is not optional, it’s integral to delivering the protection customers expect and deserve. Mortgage brokers who embrace this responsibility will not only safeguard their clients but also future-proof their businesses.

Conclusion: A Call to Action

The Which? findings and FCA super-complaint have exposed a critical vulnerability in the home insurance market. For mortgage brokers, this is a moment of truth. Will you remain a mortgage-only broker, or will you step up as a holistic protector of homes and financial well-being?

The choice is yours but the opportunity is clear. Writing home insurance isn’t just good business; it’s good ethics, good compliance, and good sense.

Ready to lead the change? Start by reviewing your current approach to home insurance and explore partnerships that enable you to deliver the protection your customers deserve.

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