Insurer rejected your claim? Here is what you can do

Why insurers reject claims and when you can appeal

Insurers often seek to reject claims based on an exclusion or condition in the policy. Refusals of cover typically cite exclusions and conditions such as reasonable care and unattended or insufficiently protected property (in fire or flood claims), pre-existing conditions in pet or life and critical illness cover, and storm (or other immediate damage) versus “wear and tear” disputes.

They also may rely on alleged misrepresentation or non-disclosure for things like the sum to be insured (usually in commercial contexts), undeclared criminal convictions, vehicle use or modifications, or suspected exaggeration/inaccuracy as to security mechanisms. These exclusions are often not specific enough or are too ambiguous – which can lead to a reasonable complaint being raised against the insurer and a case being advanced to ensure that the policy cover is reinstated.

What are the key elements of a successful case?

Insurers have to show clear evidence that an exclusion or other relevant clause applies properly under the terms of the policy to justify their refusal to indemnify. Where credible evidence and expert analysis support the policyholder, reliance on exclusions and conditions are often found to be inappropriate. In misrepresentation cases, the clarity of the insurer’s questions at the time the policy is taken out becomes a critical factor. This requires specialist legal input on behalf of the affected policyholders.

Effective grounds for complaint by product type

This section of the article explores some of the more common areas where complaints are made, and when they are upheld:

• Motor and motor warranties often turn on reasonable care, alleged exaggeration, undisclosed use or modifications, and MOT or servicing conditions.
• Insurance disputes relating to both domestic and (very often) commercial properties commonly focus on peril versus wear and tear, fire or water damage causation and security measures. These matters can be high-value ones, especially with commercial businesses when their right to claim cover for business interruption as well as physical damage is at stake.
• Life and critical illness claims (these can also be high-value) typically involve pre-existing conditions and medical history, with emphasis on clear questions at the outset by the insurer, and clinical evidence as to the policyholder’s health.
• Pet insurance, a common area for disputes with insurers, also usually involves the clinical history and the accuracy of the insurer’s terms and of the policyholder’s information.
• Legal expenses issues often centre on prospects of success, proportionality and choice of representative.
• Gadget and card protection claims frequently raise reasonable care and unattended property terms which are assessed in a real world context.
• Finally, many disputes can relate to time-critical conditions in the insurance policy which require notification of circumstances or trigger events to the insurer within a specified period.

Typical resolutions and monetary outcomes

Remedies of a successful insurance claim usually aim to put you back where you would have been without the unfair decision:

• Payment of valid claims under the terms and limits, properly construed, is the norm in upheld cases. As noted, such disputes in a commercial context or with critical illness and life policies can often be serious in their consequences and are sometimes of high value. Damages can be awarded for financial/trading losses caused by the insurer’s refusal to honour the policy.
• Simple interest at 8% per year is routinely added from the date you paid out or were unfairly refused to the date of settlement.
• Compensation for distress and inconvenience is common. Typical awards cluster between £100 and £350, rising to £500 for more serious detriment with occasional significantly higher outliers where impact is pronounced.
• Reinstatement of cover, removal of avoidance or fraud markers and letters of correction are ordered where policies were unfairly cancelled or voided.
• Other reimbursements can include storage and recovery charges, alternative accommodation and independent expert fees where reasonably incurred.

What to do quickly after a rejection by the insurer

There are several things which you can do if an insurer has rejected your claim. Ask for a clear written explanation citing the exact policy terms and evidence relied on. Gather photos, invoices, expert reports and any police or professional notes and set out a short factual timeline addressing each point. For alleged misrepresentation, check the questions you were actually asked at sale or renewal and seek call recordings or screenshots. If the issue is late notification or a process breach, explain why there has no material prejudice to the insurer and what you did to limit loss. If causation of the relevant loss is disputed, obtain independent expert evidence that addresses what happened and the cost to put it right.

Here at WRS, we are very experienced in these situations and can advise and guide at all stages to help you see if you have a valid claim against the insurer.

Conclusion

Many rejections under insurance policies are contestable where terms and exclusions are unclear or unusually applied, where questions at the point of sale of the policy were ambiguous or poorly presented, where the insurer cannot show real prejudice from any breach, or where investigations overlooked credible evidence. A clear evidence-led approach and timely escalation of the complaint will greatly improve your prospects of a fair outcome regarding the claim.