Why providers might reject your insurance claim – and what to do if this happens

There are several reasons why a claim could be rejected, fairly or otherwise. Some are highlighted below.

You might have given incomplete or inaccurate details during your claim, intentionally or by mistake. For example, how something happened or got damaged.

Most policies include a ‘reasonable care’ or ‘duty of care’ clause that requires you to take steps to prevent a claim from arising. For example, if you left your valuables on display in your car or your mobile phone on the bus, your insurer might see this as a reason to contest your claim.

The insurer can reject your claim if they have reason to believe you didn’t take reasonable care to answer all the questions on the application truthfully and accurately. A common example is failure to disclose a pre-existing medical condition.

Insurers can sometimes find contentious ‘small print’ reasons to challenge your claim. For example, they might contest whether a lost or stolen item was used for personal or business purposes. If it’s the latter, it might not be covered by the policy.

Insurers often expect customers to go exactly by the letter and might use evidence of you not following their claims process closely enough as justification for turning it down.

This can happen, for example, if your policy doesn’t give you enough insurance to cover all your losses. You’ll have to pay an excess if the insurer believes you’ve overstated the value of your claim.

If you’re not happy with the reasons given by the insurance company for rejecting your claim, you have a right to complain. 

Check the details of your policy to see if the facts fit the reason for the rejection.

It’s worth challenging it if you believe it was unfairly rejected. This is because these decisions can sometimes be overturned (often after taking it to the Financial Ombudsman Service – find out more on this below):

• Check you gave all the correct details in the beginning.
• Note down or highlight the exact wording in your policy that says you’re covered – as you’ll need it later.
• If the wording is ambiguous or poorly explained, note that down too. Your insurance company is duty-bound to give you clear information and they must give you a reasonable explanation for refusing to pay your claim.
• New rules state that an insurance company can’t reject your claim if you took reasonable care to answer all their questions honestly and to the best of your knowledge. If your insurer didn’t ask for information, they now say you should have voluntarily disclosed, note that down too.
• Did the insurer ask you for the information that it now says you should have voluntarily disclosed? If it didn’t, make a note of this.

Then find any other documentation that relates to your policy.

For example, if you sent your insurance company a letter advising them of a change in your circumstances (this is your responsibility), try to find a copy of the letter.

When you’ve taken a look at your policy, it’s time to get in touch with the insurance company.

You can phone the company and speak to their complaints handlers or write a formal letter of complaint and send it to the contact given in the company’s complaints procedure.

Your complaint should then go through the insurer’s internal review process. You can ask for details of this if you want to.

If you bought your policy through an insurance broker, they might make your complaint for you – it’s worth asking, to save yourself the hassle.

Here are some useful tips to write your letter of complaint:

• Put the date on the letter.
• Give your name and policy number.
• Mark the letter ‘complaint’ clearly at the top.
• Include any evidence you have to support your complaint.
• Say what you would like the company to do to put things right.
• Explain your complaint clearly, stating why you think your claim shouldn’t have been rejected.
• State that if you are unhappy with the company’s response. you’ll take the matter to the Financial Ombudsman Service.

If the problem is technical or specialist, it might help to get an independent assessment. For example, if your insurer is arguing that damage to your property was as a result of wear and tear and you’re arguing that it was accidental damage.

It’s worth getting a loss assessor (not to be confused with a loss adjuster, who works for the insurance company) to look at the damage and send their report to the insurance company as evidence.

Be aware that they’ll charge a fee for representing you.

Even if it doesn’t change the insurance company’s mind, it might be useful information to have later on.

If you’re still unhappy after going through the insurance company’s complaints process,  you have a right to take your complaint to the Financial Ombudsman Service.

The Financial Ombudsman Service is an independent, free service that investigates complaints from individuals about financial companies.

If you take your complaint to them, they’ll consider both sides of the story, look at the documentation and attempt to find a fair outcome based on the facts and common sense.

You can only make a complaint when you’ve received what’s called a ‘final response’ from your insurance company, or eight weeks have passed and you haven’t received a response from them.

If they decide your claim was wrongly rejected, the Financial Ombudsman Service have the power to make the insurance company:

• explain its actions
• apologise, and
• pay compensation or take appropriate steps to change the outcome.

Send it off with a copy of the final response letter from your insurance company and any other documents you have that support your case.

No, you shouldn’t need any special help or support if you complain.

The Financial Ombudsman Service is a free and informal service and would prefer hear from you in your own words.

Everyone has the right to have someone else to act on their behalf.

Some people might like to have someone from their local Citizens Advice or a relative or friend to help them with their complaint.

But if you decide to employ someone to present your case for you – for example, a claims management company – you might have to pay their costs yourself.

This could mean paying them part of any compensation you’re awarded.