The House of Lords Has Spoken: Main Reasons Home & Travel Insurance Claims Get Refused and How to Fight Back
A recent House of Lords Report has raised serious concerns about home and travel insurance in the UK. Published on 23 October 2026, it highlights a problem many consumers unfortunately face: they only discover what their insurance does not cover after something goes wrong and they need to make a claim.
The Financial Services Regulation Committee's Report, Home and Travel Insurance Regulation: More for the FCA to Do, highlights confusing policy wordings, price-driven purchasing decisions, poor consumer understanding, and shortcomings in claims handling as the main reasons why claims get rejected.
In this article, we explain the Report's main findings and look at the common excuses insurers use to reject home and travel claims, as well as what you can do to fight back if you have a claim refused.
What the House of Lords Report Found
The October 2026 Report follows more than a year of regulatory scrutiny into how home and travel insurance policies in the UK are sold and how claims are handled.
In it, the House of Lords Financial Services Regulation Committee investigated how home and travel insurance is regulated, focusing on what consumers understand when purchasing policies and how fairly they are treated when making claims.
The figures are concerning. According to the report, home insurance claims had acceptance rates of just 62-71% in 2025, while travel insurance had 83-86%, compared with 99% for motor insurance.
With that said, let’s now move onto the Report’s main findings.
Consumers Often Discover the Gaps in Their Coverage Too Late
The Report identifies poor consumer understanding as a major contributor to declined claims. Home and travel insurance policies in particular tend to cover numerous risks, each with separate definitions, limits, conditions, and exclusions.
For example, a homeowner might assume storm damage also includes any damage during severe weather, only to discover that the insurer disputes whether the weather met the policy's definition of a storm. Similarly, a traveller may assume their policy covers emergency medical treatment abroad without realising that a particular pre-existing condition is excluded.
The Committee's concern is that these misunderstandings persist despite insurers' existing obligations to help customers understand their products.
Cheaper Insurance Does Not Always Offer Better Value
Price comparison websites have made finding affordable policies much easier, which has significantly increased competition between insurers. However, the Committee noted that this intense price competition may at times encourage some products to offer reduced coverage to remain competitive.
The trouble with this approach is that while consumers can readily compare premiums and excesses online, they cannot truly gauge how different insurers perform when handling claims. The Committee concludes that the lack of comparable information about claims outcomes makes assessing overall product value difficult.
The Financial Conduct Authority Is Not Doing Enough
The Committee says the FCA already has the rules it needs to tackle these problems, but must do more to enforce them. It calls for stronger action on poor claims handling, clearer information about claims outcomes, and evidence that consumer protections are working.
The Committee ends its Report by calling on the FCA to publish what it plans to do, set deadlines, and report on its progress after 12 months.
But Wait, There’s Even More to It Than This
Our view is that the problems go deeper than merely failing to educate people about what they are buying and asking the Regulator to act tougher on rogue firms. The reality is that, over the last decade, there has been a cultural shift in the industry in favour of the insurer.
As a result, the landscape has visibly degraded.
The Current Sales Process
- The majority of consumer insurance is sold directly to the consumer on-line, so there is no one on your side, like an insurance broker, to help you if a claim is refused.
- Price comparison search returns present the choices in a way that suggests most cover is the same, so that the only apparent variable is based on price.
- Price competition has led to cover being hollowed out (less of it with lower limits).
- Product length and complexity discourages readership and understanding. It’s not just a case of saying “read your policy” and you can’t really summarize 50-60 pages of small print.
The Current Claims Process
The problem with insurance these days is everyone buys online. So honest people don't make claims regularly, and when they come to claim under the policy they're kind of uneducated as to what to expect and how to deal with it. So they'll see somebody coming up their driveway smiling and the person will think that's great, he's there from my insurance company to give me a fat cheque. Where in fact those people absolutely should be viewed as they're only there to see how they can minimise the payment.
Steve Smart(hear Steve’s full conversation for LBC Radio)- Honest people don’t make claims regularly, so they are at a disadvantage against an insurer who refuses similar claims every day.
- Claims are outsourced to loss adjusters who focus on reducing claim costs without suffering their own brand damage. Our experience is that most insurers are blind to how their brands are being eroded in the naive belief that all cost savings are legitimate in the name of claims leakage or fraud avoidance.
- Lack of accountability through call centres (faceless institutions driven by processes rather than reasoning where you never get the same person twice).
- The Financial Ombudsman (FOS) is not a consumer champion because only one third of insurance complaints are upheld by them. Insurers suggest this is because they are making better decisions, but this is disingenuous when held against the claim rejection rates now revealed.
- Insurance law generally develops in the insurer’s favour. Insurers therefore tend to have the legal advantage over customers who try to fight back using the court system where the loser pays for the winner’s legal costs. They can also close out tricky cases after months of pressure by paying out under the protection of a non-disclosure agreement so that any misdealings stay buried.
Common Reasons Why Home and Travel Claims Get Refused
These are the type of claim refusals we see regularly in home and travel insurance. With that said, most of these can be challenged if you get the right information or evidence to show the cause was something that is insured rather than something that is excluded.
| Insurance Type | Reason Given | What to Check | Evidence You Need |
|---|---|---|---|
| Home | Storm conditions were not met. | Any definition of a storm in the policy, weather conditions, and whether the storm caused the damage. | Localised weather records, photographs, inspection reports, and repair estimates. See the official FOS guidance for more details. |
| Home | Wear and tear or poor maintenance. | Whether the damage resulted from gradual deterioration, an insured event, or both. | Consider getting a surveyor or contractor report to show the damage happened suddenly. Maintenance records and photographs can also help. See the official FOS guidance for more details. |
| Home | Under-insurance (this allows your insurer to reduce your claim payout by the proportion the building was underinsured by). | The declared sum insured, valuation, and clause permitting any proportional reduction. | Policy schedule, rebuilding estimates, contents inventories, and valuations. You can reference the BICS valuation tool as well. |
| Travel | Medical condition or inaccurate disclosure about a pre-existing medical condition. | Whether the refusal concerns an exclusion or an inaccurate answer during purchase. | Medical records, screening answers, purchase documents, and correspondence. See the official FOS guidance for more details. |
| Travel | Unattended belongings. | The definition of unattended property and the actual circumstances of the loss. | Police reports, witness accounts, CCTV, photographs, and proof of ownership. |
| Travel | Late notification or missing evidence. | Reporting requirements, reasons for the delay, and its effect on the investigation. | Claim forms, emails, call records, airline reports, and alternative evidence. |
Answering pre purchase questions accuracy
Under the Consumer Insurance (Disclosure and Representations) Act 2012, consumers must take reasonable care not to misrepresent information when answering insurers' questions.
If you don’t do this, your insurer will usually try to cancel your cover from the day it started by telling you that, had they known the accurate position, they would never have insured you. The shock for most people is that they can do this even if the information failure has nothing to do with your claim. For example, if you said you had a fire alarm and you did not, they could avoid a claim for a burglary even though this had nothing to do with a fire.
Most times, your insurer will only argue your failure to tell them something was a “careless” mistake, rather than a deliberate one (because they will have to prove the latter, which will usually be difficult). If they do argue it was careless, then the Act allows them to do what they would have done had they known the accurate position.
This might include not insuring you at all, charging you a higher premium, or imposing additional policy requirements and/or exclusions on you. If your insurer says this, then put them to proof by asking them for a copy of their underwriting guidelines showing what they would have done differently.
How to Challenge a Refused Home or Travel Insurance Claim
If you believe your claim should not have been refused, then the best approach is to address the exact reason why your insurer has refused it. Follow these six steps below to get the best results.
Get the Reason for the Refusal in Writing
Ask the insurer to confirm the precise reasons for refusing or reducing the claim. Their explanation should identify the relevant policy provisions and the factual basis for applying them.
For example, if a storm claim was refused because of poor maintenance, ask which clause applies and what evidence establishes that maintenance caused the damage. A written explanation also provides a clear reference point if the insurer later tries to change or expand their reasoning.
Review Your Policy Documents
Read the refusal alongside the documents that applied when the incident occurred. These should include your:
- Policy Wording: Typically a 30 to 60 page booklet containing all your insurer’s small print.
- Policy Schedule: Contains all your personal details and confirms which parts of the policy apply and when.
- Statement of Facts: It’s not always called this way, but it’s the document containing the pre-purchase questions you were asked and the answers you gave.
For travel claims, pay particular attention to medical screening, baggage conditions, and reporting requirements. For home claims, examine the insured events, exclusions, declared sums insured, and any relevant policy conditions.
You’re ultimately looking to determine which contractual provisions may be relevant to your claim and what they actually say. Your insurer should then be able to identify the precise reason for their decision, rather than relying on a general description of coverage.
Build a Clear Evidence-Based Argument
First, establish which headline risk covers your claim. To do this, you will need to show that the claimed damage or loss was caused by an event covered by the policy. Next, check the meaning of any words that may apply and which appear in the “Definitions” section of your Policy Wording.
- For a storm claim, that might involve demonstrating that qualifying weather conditions occurred and caused the damage.
- For a theft claim, it could involve establishing what was stolen, when the theft occurred, and which policy section provides cover.
Second, examine any exclusion that your insurer may be relying on. The legal effect of these are that they claw back cover that would otherwise be provided by an insured peril.
Once a covered event has been established by you, the burden of proof to show that an exclusion applies falls upon your insurer. For example, if the insurer accepts that storm conditions occurred but relies on a gradual deterioration exclusion, ask for a copy of their evidence in support of their position.
Request Relevant Reports and Records
Ask for the documents needed to understand how your insurer’s decision was reached. Depending on the claim, these may include expert reports, valuation calculations, relevant correspondence, call recordings, or records of statements you provided.
Additionally, note that while a Subject Access Request under GDPR rules can help obtain any personal data held about you, it does not guarantee access to every internal business document. So, if your insurer refuses to hand any evidence over, you can ask for it using the Pre-Action Protocols.
These are the rules that both parties must adhere to before potentially suing each other, which include the obligation to exchange sufficient information to understand each other’s position and make decisions about how to proceed.
Submit a Formal Complaint
If your insurer will not reconsider, submit a formal complaint to their complaints or customer relations team. To do this, first identify the claim, explain the grounds for disagreement, and state your required outcome, while keeping the complaint factual and organised.
A useful structure is to explain what happened, identify the insurer's refusal reason, present the relevant evidence, and explain why the policy or applicable rules should have them reconsider their decision.
Our Insurance claim rejection cheatsheet provides a more detailed explanation of the evidence and complaint process.
Escalate to the Financial Ombudsman Service
If your complaint remains unresolved, you may be able to refer it to the Financial Ombudsman Service (FOS). The service is free for consumers and independently reviews eligible complaints about insurers. For most insurance complaints, you can normally approach the FOS after receiving an unsatisfactory final response or once eight weeks have passed since you last complained.
After receiving a final response, you normally have six months to refer the complaint to the FOS. They will then assess your case and must make a decision which is fair and reasonable in all of the circumstances.
The FOS uses a two-tier process. First, your case will be decided by an investigator. Then, if either side is unhappy with the decision, it can be appealed to an Ombudsman, who is usually more experienced in these matters. Again, it’s worth mentioning that this service is completely free to use.
How SmarterClaims Can Help
If your insurer has refused a home or travel insurance claim, then SmarterClaims can help you analyse the decision before you respond.
Our online tool can review the refusal letter and relevant correspondence, look at the applicable policy documents, identify arguments relevant to the dispute, explain relevant laws and rules, and produce a letter to challenge your insurer’s refusal that you can then review, sign, and send yourself.
About SmarterClaims
SmarterClaims is built on a playbook created by Steve Smart, who is the ex Legal Director/General Counsel of AIG in the UK. Steve has spent 40 years in the general insurance industry as a broker, underwriter and solicitor, so he understands the insurance market both commercially and legally.
Final Thoughts
The House of Lords report highlights a fundamental problem with home and travel insurance: consumers often discover the limitations of their cover only when they need to make a claim. But while the Committee calls for clearer cover and fairer claims handling in the future, those affected need answers today.
So, if your claim has already been refused, start by obtaining the insurer's written explanation and the exact policy clauses they rely upon. Next, establish whether your loss falls within the cover purchased, then see if the evidence can support any exclusion or condition the insurer has previously raised.
If their reasoning appears inconsistent with the policy, facts or applicable rules, challenge the specific points head on through the formal complaints process or consider referring an unresolved dispute to the Financial Ombudsman Service in case the insurer is standing their ground.
Frequently Asked Questions
Usually, yes.
A rejected claim does not instantly prevent you from buying another policy. Note, however, that the fact that you “made” a claim (even though it was rejected), or that you had your policy cancelled by your insurer, is registered on a central database that insurers use (the Claims Underwriting Exchange).
This means that, when you purchase another policy, you must answer any pre-purchase questions that you are asked relating to your earlier insurance history accurately. If you don’t do this, your new insurer will still sell you the policy, but will check the database if you later have a claim.
If this check reveals you have given false information when buying the new policy, then your new insurer will avoid it or cancel it from the start.
Potentially. The Financial Ombudsman Service may award compensation where an insurer’s mistakes caused additional distress or inconvenience beyond the original insured event.
This is separate from paying the claim itself, however. To improve your chances, explain how avoidable delays, repeated errors, or poor communication affected you, supported by relevant records.
Compensation is not guaranteed simply because a claim was refused either, and even then the amounts awarded tend to be low (typically a couple of hundred pounds). If you suffered material losses because your insurer delayed the handling of your claim, then you may have a separate claim for damages under Section 13A of The Insurance Act 2015.
If you disagree with an Investigator’s assessment, you can ask for an Ombudsman to review the complaint. An ombudsman’s final decision then ends the FOS process.
If you accept it, it becomes binding and pursuing further compensation in court is generally restricted. If you reject it, then court action may remain available, subject to applicable deadlines and legal requirements. For more information, see the rule in Clark v In Focus.
