How to Dispute a Rejected Insurance Claim

Having an insurance claim refused by your insurer is a big problem. It means that not only do you have to manage the underlying claim problem to put the situation right, you will also have to fight your insurer. This has become harder in recent years for several reasons:

• Most people buy insurance online rather than through a broker, meaning that if your claim is refused there is no one on your side to help you.
• Honest people don’t make claims regularly, meaning that they are inexperienced when making a claim. Their insurer can easily take advantage of this.
• The industry has become increasingly focused on illuminating fraud and claims leakage, which means insurers standard processes have become more zealous.
• Most sizable claims are outsourced to loss adjusters who usually focus on evaluating how a claim can be refused or reduced in order to save the insurer money.
• Insurance law and regulation are complicated, making it unlikely that you know how to challenge a claim refusal and more likely your insurer will apply the law incorrectly to suit their needs.

The consumer body Which? recently polled their customer and uncovered that almost 30% of home insurance claims are refused by insurers and 20% of travel claims are refused. They have since launched a “Super Complaint” against the industry regulator, the FCA, arguing that they were not doing their job properly by keeping rogue players under control.

How to Fight Back if This Happens to You

1. Get Your Insurer's Excuse in Writing

This will reduce their ability to change their story later and give you something precise to argue against.

2. Read Your Policy Documents

Most people never read these, but they are the basis of the contract between you and your insurer and your insurer’s arguments will most likely emanate from them. Whilst the type of claim you have had may be quite common, the specific circumstances of it will be unique.

Insurers often apply their small print wrongly to these circumstances by overextending how they apply the actual words they have used in their documents. However, any doubt about their contract policies must be interpreted in your favour – and not theirs – by law.

3. Gather Evidence

If you think it would help to substantiate that your claim happened, what caused it, and/or how much it affected you, then try to use photos, receipts or input from an expert to substantiate your position. Doing this upfront can save a lot of time later on and can give you a first mover’s advantage before your insurer produces their own evidence to substantiate their own position against you.

There are various stages where your claim can fall down, so consider which stage you may need something independent in support of your position. The stages are:

• That you answered your pre purchase questions accurately;
• That your claim happened;
• That it was caused by a risk that is insured;
• That it was not caused by something that is excluded;
• That you complied with a relevant obligation in the policy documents;
• What activity or works need to be carried out to put you back in your pre-claim condition;
• How much your claim cost.

4. Draft a Letter to Challenge Their Excuse

This one can be tricky, but in simple terms, just try to explain why you think their decision is wrong and provide any evidence in support of your arguments. Keep your letter professional, factual, and strictly focused on the excuse.

Start by stating your policy number and the date of the incident so the handler can locate your file immediately. Then, list the insurer's reason for refusal and directly counter it with your gathered evidence to dismantle their argument.

Common Insurer Excuses and What They Mean

When you receive a claim rejection from your insurer, it will usually look convincing and final. Your insurer wants you to think that this is the end of the matter and that there is nothing more you can say or do to overcome their excuse. This is incorrect – below are some of the things you can expect to hear from your insurer and what each of these veiled responses actually means.

The Options Open to You Right Now

Policyholders generally think they only have three choices when an insurer refuses to pay. They can do nothing, draft a response themselves, or hire a legal professional. Doing nothing means walking away from money you are legitimately owed. Going the DIY route is free, but leaves you guessing at complex legal phrasing. Hiring a solicitor is highly credible but often cost-prohibitive for everyday disputes.

Where to Take Your Case

In any given insurance claim dispute, the trick is to break your case down into two distinct parts. The first part is to get your arguments clearly thought through and articulated in writing, with any evidence in support of your arguments.

Once this is done, the second part is to decide who to make those arguments to. This will need to be someone who has the authority to override the refusal if they agree with your arguments.

There are two separate paths to making a complaint.

• The first is to make a complaint to your insurer, and if they refuse to uphold it in 8 weeks or they don’t give you a decision in that time, you can take it to the Financial Ombudsman Service (“FOS”). If the FOS agrees to uphold your case, they can make a binding decision against your insurer up to £455k in value and force them to pay your claim up to this amount.

• The second is to take your case to court. Any dispute under £10k will be dealt with by the Small Claims Court. Anything above this amount will be dealt with by either the County Court or the High Court (depending on the size of the dispute). The beauty of the Small Claims Court is that the rule on the loser paying the winner’s legal costs does not apply. This means that if you fight your insurer and they appoint a law firm to act for them, then you will not have to pay their legal fees if you lose. However, this rule does not apply in the County Court or the High Court.

Here are the pros and cons of going to the FOS or Court:

Even though the FOS can be unpredictable in their decision-making and their service rating is poor, most people still opt to use this service because it is easy to use with less formality than the Court system, its desk-based rather than you having to attend any meetings or hearings, and its free to use, without the risk of incurring your insurer’s legal fees.

If you use the FOS, remember that you have to make a complaint to your insurer first and then give them 8 weeks to give you their final response. Once you receive this, don’t delay as you have to go to the FOS within 6 months of receiving it.

How Smarterclaims.co.uk Can Help

If you get all or part of an insurance claim refused under a consumer insurance policy, we can help. We’ve catalogued most of the excuses that insurers use to refuse paying claims under the common policy types and matched them against the laws and rules that help you. If you drag and drop your insurer’s excuse letter and your policy documents into our portal, our AI will explain which arguments you can use and how to present them to best effect.

It will also draft a letter for you to send to your insurer, embedded with links to the laws and rules that help you. You can then use this to challenge your insurer by making the right arguments persuasively. We’ll also give you a step-by-step guide telling what to do in the right order, so that you can present your case to the right people as quickly and efficiently as possible. Our service is available for a small fixed fee, but we will refund you if you’re not entirely happy with what we provide.

Disclaimer: Smarterclaims is not a law firm or a claims management company and we don’t give advice. We are a digital tool for UK consumer insurance disputes. Using Artificial intelligence, we publish legal information and write letters that you can send yourself to help you overcome an insurance claim refusal. Our database of know-how contains 40 years of expertise drawn from inside both the insurance and legal industry to ensure its high accuracy.

Final Thoughts

Receiving a rejection letter can make it seem as though your insurer has already had the final say. In reality, a refusal is a position taken by the insurer – and if that position is based on an incorrect interpretation of the policy, incomplete evidence, or an argument that does not properly apply to your circumstances, you may have grounds to challenge it.

The strongest disputes tend to start with the same fundamentals: understand exactly why the claim was rejected, read the relevant policy wording carefully, gather evidence that supports your version of events, and respond directly to the insurer’s reasoning.

If that does not resolve the dispute, there are routes for taking the matter further, including making a formal complaint, approaching the Financial Ombudsman Service where eligible, or considering court proceedings.

The important thing is not to assume that a convincing-looking rejection letter automatically means your claim is over. Understand the argument being made against you, build your response carefully, and make sure you act within the relevant deadlines to give yourself an adequate chance to fight back.