What to do if your insurance claim is rejected

If your claim has been rejected and you think it’s unfair, there are things you can do to address the problem.

Why might your claim be rejected?

Did you use a broker?

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.

There are a number of reasons why a claim could be rejected.

  • Incorrect information – if you gave wrong information at any stage (for example, about how something got damaged), it could affect your claim
  • Lack of due care – for example, leaving valuables on display in your car or your mobile phone on the bus may mean you’re not covered under the terms of the policy
  • You didn’t take reasonable care to answer all the questions on the application truthfully and accurately – for example you might not have told the company about a pre-existing medical condition or a criminal conviction

If you are not happy with the reasons the insurance company give for rejecting your claim, you have a right to complain.

What to do if you feel your claim shouldn’t have been rejected

Check your policy documents

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

  • 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 – 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.
  • 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.

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.

Contact the insurance company

Once 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.

How to write a formal complaint letter

Use our letter template (DOC 30KB) or follow the tips below to write your letter of complaint.

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

Get an independent assessment

If the problem is technical or specialist – 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 may help to get an independent assessment. Get a loss assessor (sometimes called a loss adjuster) in to look at the damage and send their report to the insurance company as evidence. They will charge a fee for representing you.

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

Go to the Ombudsman Service

If, after going through the insurance company’s complaints process, you are still unhappy with the outcome, you have a right to take your complaint to the Financial Ombudsman Service. You can only do this once you have 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.

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.

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

  • Explain their actions
  • Apologise, and
  • Pay compensation or take appropriate steps to change the outcome

Download and complete a complaint form from the Financial Ombudsman Service website. Send it off with a copy of the final response letter from your insurance company plus any other documents you have that support your case.

Your case will first of all be looked at by an ‘adjudicator’ but if either you or your insurance company is unhappy with the outcome, it can be referred up the chain to an ‘Ombudsman’. The Ombudsman’s decision is final and binding on the insurance company. If you’re unhappy with the outcome, you will still have the right to take your case to court.

Do you need an ‘expert’ to help with your complaint?

No. You shouldn’t need any special help or support if you complain. Also, the Ombudsman Service is a free and informal service and they prefer to 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 Bureau or a relative or friend to help them with their complaint.

However, if you decide to employ someone to present your case for you – for example, a claims management company – you will almost certainly have to pay their costs yourself. This could mean you paying them part of any compensation you are awarded.