Despite a popular image as money-hoarding scrooges, insurers are in fact paying the overwhelming majority of claims, according to new figures released by Insurance Ombudsman Sam Parrino.

In the 2006 financial year, insurers paid almost 98% of all claims, honouring nearly 3 million policies across motor, home and contents, travel, home building and consumer credit lines.

Insurers issued nearly 30 million policies in the 12 months to June, with 60,992 of 2.98 million claims rejected.

Nearly 22% of policyholders who had their claims refused asked the Insurance Ombudsman Service (IOS) to review their cases.

Figures from IOS show consumers have a fair chance of overturning an insurer’s decision, with 25% having their appeal upheld.

Mr Parrino says while the high rate of overturned decisions is good for consumers, it highlights the need for insurers to tighten up their processes even further.

“There is still room for improvement in the industry’s decision making at first instance,” he said.

Consumer credit policies have the highest rate of rejection at 10.6% of claims. Just 0.5% of motor insurance claims were knocked back by insurers, the lowest rate of rejection of any domestic class.

IOS overturned a staggering 52.5% of the cases involving travel insurance – the highest rate of success for consumers – while the industry had better luck with home building policies, where the Ombudsman ruled in favour of insurers 72.4% of the time.