The FCA Consumer Duty, set out in Policy Statement PS22/9 published in July 2022 and effective from 31 July 2023, represents the most significant reform to retail financial services consumer protection standards since the introduction of the Treating Customers Fairly (TCF) regime in the mid-2000s. Unlike TCF, which operated as a Principle (FCA Principle 6) and required firms to treat customers fairly without specifying the outcomes to be achieved, Consumer Duty sets four specific outcome areas that firms must actively deliver - and requires firms to demonstrate through their own evidence and governance that those outcomes are being met. For motor insurance buyers, Consumer Duty creates enforceable expectations about how insurers must behave across the full policy lifecycle - from initial product design and marketing, through annual renewal pricing, to claims handling and complaint resolution. The FCA has specifically highlighted motor insurance as a priority sector for Consumer Duty supervision, given the scale of the market (approximately 33.3 million insured vehicles, DfT Q3 2025) and the concerns raised in the FCA's earlier pricing practices work. For complaints rights, see our UK car insurance complaints guide. For the full market overview, visit the car insurance hub. What Consumer Duty is - the legal frameworkConsumer Duty is implemented through three new instruments in the FCA Handbook:
The four outcome areas - applied to motor insuranceThe four Consumer Duty outcome areas each impose specific obligations on motor insurers and intermediaries. The FCA's finalised guidance (FG22/5) provides detailed explanation of how each outcome applies in practice:
How Consumer Duty interacts with prior FCA rulesConsumer Duty does not replace earlier FCA rules - it adds a higher overarching standard on top of them. Specific prior rules that continue to apply alongside Consumer Duty in the motor insurance context include:
FCA enforcement activity (2023-2026)The FCA has been explicit that Consumer Duty will be enforced, not merely supervised. Following the July 2023 effective date, the FCA's enforcement approach in the motor insurance sector has included: Renewal pricing reviews. The FCA has continued to monitor renewal pricing data following the PS21/5 pricing practices rules. Under Consumer Duty, the price and value outcome requires insurers not just to avoid price-walking but to actively demonstrate that renewal prices represent fair value. The FCA has written to boards of insurance firms requiring evidence of their Consumer Duty value assessments. Claims handling outcomes. The FCA has stated it will use FOS complaint uphold rate data, insurer-reported claims outcome data and its own thematic reviews to assess whether the consumer support outcome is being met. High FOS uphold rates at a specific insurer are a potential trigger for supervisory engagement under Consumer Duty. Vulnerable customers. Consumer Duty places specific obligations on firms to identify and appropriately support vulnerable customers (as defined in the FCA's Guidance on the Fair Treatment of Vulnerable Customers, FG21/1). In motor insurance, this is particularly relevant in the claims context - a driver who has been in a serious accident may be in a vulnerable state and requires sensitive handling. Add-on products. The FCA has specifically scrutinised the value of add-on products sold alongside motor insurance policies - including GAP insurance, key cover, excess protection and NCD protection. Under the price and value outcome, insurers and distributors must be able to demonstrate that these add-ons represent fair value. For complaints rights under Consumer Duty, see our UK car insurance complaints guide. For what Consumer Duty means for renewal pricing, see our average car insurance cost guide. What your Consumer Duty rights mean in practiceConsumer Duty does not give individual consumers a new private right of action against their insurer - the FCA enforces Consumer Duty obligations against firms rather than consumers pursuing firms in court under the Duty directly. However, Consumer Duty materially strengthens the consumer's position in several practical ways:
Frequently Asked QuestionsWhat is the FCA Consumer Duty?The FCA Consumer Duty (Policy Statement PS22/9) is a package of FCA rules, effective from 31 July 2023, that requires firms providing financial products and services to retail customers to actively deliver good consumer outcomes across four specified areas: products and services; price and value; consumer understanding; and consumer support. It applies to all FCA-authorised firms in the distribution chain for motor insurance, including insurers, brokers, comparison sites and add-on sellers. Does Consumer Duty give me new rights to sue my insurer?Consumer Duty does not create a new private right of action for individual consumers - it is enforced by the FCA against firms. However, the FCA has confirmed that Consumer Duty obligations are relevant to the FOS when assessing whether an insurer acted fairly in a dispute. A Consumer Duty breach by the insurer may therefore strengthen a consumer's FOS complaint, even if it does not give rise to a direct court claim under the Duty itself. How does Consumer Duty affect car insurance renewal prices?Consumer Duty's price and value outcome requires motor insurers to demonstrate that the price charged at renewal represents fair value relative to the benefits delivered. Combined with the PS21/5 pricing practices rules (which prohibit charging renewing customers more than equivalent new customers for the same risk), Consumer Duty places structural pressure on renewal pricing. The FCA has required insurers' boards to sign off value assessments confirming that their pricing methodology is consistent with Consumer Duty obligations. What should I do if I think my insurer has breached Consumer Duty?First, use the insurer's formal internal complaints process. If unsatisfied after 8 weeks or on receipt of the final response, refer the complaint to the FOS at financial-ombudsman.org.uk. The FOS applies a fairness standard that incorporates Consumer Duty obligations in its assessments. For systemic concerns (where you believe a firm's practices are affecting many consumers, not just you), the FCA accepts reports via its Consumer Helpline or online reporting tool at fca.org.uk. Does Consumer Duty apply to comparison sites?Yes. Consumer Duty applies to all firms in the distribution chain for retail financial products, including price comparison websites that arrange or facilitate the purchase of motor insurance. Comparison sites must ensure that the products they present are appropriate for the target market, that their presentation of information enables consumer understanding, and that their processes support rather than disadvantage consumers. The FCA has specifically noted that comparison sites' handling of add-on products and optional extras is an area of Consumer Duty focus.
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FCA Consumer Duty for Motor Insurance UK 2026: What It Means for You
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