Car Insurance Claim Rejected What To Do

The first step is generally to request a detailed written explanation of why the claim was declined, including the specific policy terms relied upon. The insurer's internal complaints procedure is typically the starting point for challenging a decision. If the complaint is not resolved satisfactorily within 8 weeks, or a final response letter is issued, the matter may be referred to the Financial Ombudsman Service (FOS) free of charge. The FOS can make binding decisions on insurers for claims up to GBP 415,000. People often find it helpful to gather all relevant documentation including the policy wording, correspondence, photographs, and any witness statements before beginning the complaints process.

Common situations include: a claim being rejected for alleged non-disclosure of modifications or previous claims, the insurer arguing the damage falls under a policy exclusion, a claim being declined because the vehicle was being used outside the terms of the policy, the insurer alleging the claim is fraudulent or exaggerated, and late notification of the incident to the insurer.

The Insurance Act 2015 reformed the duty of disclosure, replacing the previous strict duty with a duty to make a fair presentation of the risk. Under this Act, an insurer may only avoid a policy for non-disclosure if the policyholder's breach was deliberate or reckless. For non-deliberate breaches, the insurer's remedy is proportionate to what it would have done had the full facts been known. The Consumer Insurance (Disclosure and Representations) Act 2012 applies to consumer policies and requires the consumer to take reasonable care not to make misrepresentations. The Financial Services and Markets Act 2000 established the Financial Ombudsman Service.

People whose claims have been rejected often consider reviewing the exact policy wording to check whether the exclusion genuinely applies, checking whether the insurer followed the correct procedure under the Insurance Act 2015, gathering additional evidence to support their claim, making a formal complaint through the insurer's internal process, and escalating to the Financial Ombudsman Service if the internal complaint is not resolved satisfactorily. Some people seek advice from a solicitor or claims management company, though it is worth being aware of any fees involved.

Common mistakes include: accepting the rejection without requesting a detailed explanation, not checking the actual policy wording against the insurer's stated reason for rejection, missing the 6-month deadline to refer a complaint to the Financial Ombudsman after receiving a final response, not keeping records of all telephone conversations and correspondence with the insurer, and making a new claim without resolving the dispute over the rejected one.