My Insurance claim has been refused/rejected– what are my options?

Most of us ensure that we have all the insurance we need to stay safe and legal. That usually means paying for car insurance, home contents and building insurance, health insurance and even pet insurance. Unfortunately, insurers do not always pay out when you make a claim, often referring to various terms, conditions and exclusions in your policy documents.

9 reasons why your insurer might refuse or reject your claim

Your insurer will tell you why they have rejected your claim. Typical reasons include:

• The policy was not in force when what you are claiming for happened
• The policy is invalid because you provided incorrect information or disclosed relevant information when you applied for, or renewed, the policy
• The item is not covered by your policy
• There is an exclusion clause in the policy which means that you cannot claim for what has happened, ie, the situation was not covered by the insurance cover
• You failed to update your insurance details when your circumstances changed
• You have missed some of the instalments of your premium
• You have not followed the claims process correctly
• You have not complied with a policy term
• You have exaggerated the claim and are trying to claim for more than you should.

The insurance policy is an agreement or contract between you and the insurance company. Your right is for the insurer to act reasonably and pay what you are entitled to so that there’s no issues with the insurance company not paying claims. We suggest you check the wording of your policy to see if the reason they have provided is reasonable.

The wording of your insurance policy is the starting point of your rights – it states what you are entitled to receive from the insurance company.

My Insurer won’t pay out the full amount

In other cases, the insurer might only offer to pay part of the amount you are claiming.

Reasons for this include:

• not having enough insurance to cover your losses (known as being underinsured)
• the insurer believes your valuation is unrealistic
• the item you want to replace was old and you have already benefited from using it
• and you need to pay an excess

Aston Knight Solicitors Case Study
£215,000 for insurance claim valued at £50,000 by previous solicitor.
Aston Knight Solicitors acted for ‘AB’ (name anonymized for client confidentiality) a company which owned a large country home where they hosted weddings.  The property was damaged by a water leak, resulting in lost revenue for the business whilst it remained closed.

A dispute arose as to why the business had remained closed for so long with the insurance company trying to blame the client.
The client first sought advice from a local firm who suggested they should accept an offer of £50,000 from the insurance company, despite the fact they had lost hundreds of thousands of pounds.  Not being satisfied with this, the client sought a second opinion from Aston Knight Solicitors.

Our view was that £50,000 was nowhere near enough and so court proceedings were progressed until a settlement meeting took place at which an overall settlement at £215,000 was reached.
Remember – opening offers from insurance companies can often be too low and so it is important to ensure your solicitor will “fight your corner” and press on for a reasonable settlement figure.

How to challenge a rejected or partially paid claim

A rejected or partly-paid claim is by no means the end of the matter and you are entitled to complain if you are not satisfied with the reasons for rejecting your claim.

If you believe your claim should be paid out in full, you should carefully check:

• Your policy documents
• The details of your policy to ensure the facts of your claim match the reason for the rejection or under-payment
• You gave all the correct details when you took out your policy

Insurance companies have to act reasonably otherwise they may face a claim for their ”breach of insurance contract”. Also, the law has some additional rules on how an insurance company must act, whatever the insurance policy says. Some examples are given below:

• That you have an insurance agreement with the insurer that covers the event. The insurer will tell you if they dispute that an event was covered. However, if the wording is unclear, confusing or poorly explained then you may still be able to claim as your insurance company must give you clear information about the policy you are buying.
• That you complied with any requirements under the policy. For example, 
you took any steps required by the insurance to look after the insured item.
• That you provided honest and relevant information before taking out the policy – so that the insurance company were not misled in providing cover to you. This could be about storage of the property or other background information or history. However, an insurance company cannot reject your claim if you took reasonable care to answer all their questions honestly and to the best of your knowledge. If they then say you should have voluntarily disclosed information they did not ask for then you may still be able to claim.
• In relation to your actual claim, where you dispute the insurers’ valuation of what you are entitled to, you may have to provide your own evidence to support your valuation; such as 2 or 3 estimates for the cost of replacement or repair. The amount you can claim will be what is “reasonable” in accordance with the rules of the policy.

The policy will set the time within which you must report the event that you are claiming for. It will also set how you notify the claim to the insurer.

If you and the insurer cannot agree on what they should do or pay you under the policy then you usually have 6 years from the event to start court proceedings for the court to decide if the insurer has “breached the insurance contract” and what is reasonable in the circumstances.

How we can help

If the insurance company refuses to change its decision and you remain unhappy, you can seek assistance from a specialist Insurance Dispute Solicitor.

Aston Knight Solicitors have a thorough understanding of the complex field of insurance law and can advise you on the viability of taking the matter forwards. Contact one of our specialist solicitors today on 0161 399 1231.

By Emma Pearce, Solicitor