What should you do if your home insurance claim is rejected?

In the UK, around 1.23 million home insurance claims are made each day. Of these claims, 18% are rejected by the insurer. So, why would an insurance company deny a claim?

We’ll be looking at some of the many reasons why an insurer could reject your claim, what action you can take if you think the rejection is unfair and how to go about registering a complaint.

Can an insurance company refuse to pay a claim? Well yes, they can. And there are quite a few reasons they could give for doing so. We’ll start with the most common reason insurance companies may refuse to pay.

Lack of cover

Basically, this involves making a claim for something that’s not actually covered by your insurance policy. For instance, your home insurance policy may not cover its contents. And even if you do have contents insurance, your policy may not include accidental damage, such as spills. This is why it’s so important to go over the exact wording in your policy to ensure your claim is valid.

Misleading information

We’re sure you’re as honest as the day is long, and would never dream of bending the truth on your insurance claim form. But the non-disclosure of facts is a reason why insurers reject some people’s claims. So always be truthful when making a claim. And that includes not trying to hide previous claims to keep your no-claims bonus.

Not following the correct claims procedure

This may appear to be a somewhat feeble excuse, but insurers have been known to reject claims because those making them have not followed the proper process laid out in the policy. So again, to avoid having your home insurance claim denied, take a close look at your policy and try to follow the process as closely as you can.

Wear and tear

This is damage that naturally and inevitably occurs as a result of normal wear or ageing. Most insurers will decline claims where they believe the damage was caused by wear and tear, and therefore caused gradually. If you think about it, everything will wear out eventually, and an insurance policy can’t protect you from that.

Late claim

The majority of insurers stipulate in their policy that you must inform them that you intend to claim immediately after an incident has occurred. As always, take a close look at your insurance policy to make certain you’re following the correct claim procedure.

Technicalities

Less scrupulous insurers may very well try to dismiss your claim by quoting some obscure technical small print present in your policy. They may, for example, dispute whether a stolen or lost item was being used for personal or business purposes, refusing to pay if business items are not covered. That’s why you should read the small print to make sure you know what your policy does and doesn’t cover.

Lack of due care

If your house has been burgled and its contents stolen because you neglected to lock the front door when you left home, this can be an excuse for an insurance company to refuse a claim based on your lack of due care. Basically, it’s something you’ve done (or not done) which leads to an incident which then prompts a claim.

We understand that it can be very frustrating to have your insurance claim denied, not to mention upsetting. However, if you believe your claim is valid, despite any of the reasons above, there are still options open to you which may lead to a successful resolution.

One of the first things you should do is take a close look at your policy document to see if the reason given for rejecting your claim is actually mentioned. Make a note of any wording that you feel is ambiguous or overly complicated and, if applicable, pinpoint wording that confirms you are covered for your particular claim.

If your claim has been rejected because your insurer is saying they were not informed of a major change in your circumstances that could affect your policy, such as moving home, do search for any letters or emails in which you did let them know.

As a next step, it’s always a good idea to get in touch with your insurer. Not only to ascertain just what it is that’s causing your claim to be rejected, but to see if you can negotiate your way out of the situation. If they’re unwilling to discuss a settlement, and you still feel you have been treated unfairly, it’s then time to follow your insurer’s complaints procedure.

If your insurance company insists you state your grievances in a letter, clearly state the main reasons behind your complaint and include, if possible, any evidence which will support your argument for unfair rejection.

If you register your complaint over the phone, be sure to keep a record of the date, who you spoke with and what was discussed during the conversation. If you’re conversing via email, do not delete any until the issue is resolved.

In whatever way you communicate with your insurer, do make it clear that if you are unhappy with their response you will refer the matter to the Financial Ombudsman Service. More of which next.

Now you understand what to do if you home insurance claim is denied, so what do you do if your complaint isn’t resolved? Or if you disagree with the final outcome of the complaints procedure? Now’s the time to look to the Financial Ombudsman Service for help, who should be contacted within eight weeks following the result of a complaint.

This free service will assess the matter without prejudice and, if they consider your insurance claim to be valid, they have the power to demand an explanation from your insurer, as well as an apology and, if appropriate, that the amount originally claimed be paid in full.

Why would an insurance company deny a claim?

As we’ve explained in more detail above, there are many reasons why an insurer may choose to reject your claim, including a lack of relevant cover, the fact they’ve been given misleading information, claimants not following the correct claims procedure, late claims and a perceived lack of due care on your part.

How often do insurance companies deny claims?

Approximately 1.23 million home insurance claims are made each day in the UK. And the rejection of a claim is not unusual. In fact, between 2018 and 2019, home insurance claims had an acceptance rate of 82%.

How to appeal a denied insurance claim

If you still believe your insurance claim has been dealt with unfairly and, after following your insurer’s complaints procedure you’re unsatisfied with their response, you can appeal to the Financial Ombudsman Service. They will impartially assess your claim and enforce any reparations to be made.

As you can see, there are a lot of reasons why an insurance claim may be rejected by an insurer, some straightforward and others more complex. But do be aware that if there’s a reason for an insurer to deny your claim, they will certainly find it. So be sure to read through your insurance policy very carefully to ensure you have the appropriate cover and you are following the correct procedures.

If you have any questions or want to know more about rejected home insurance claims, please don’t hesitate to contact us.