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What to do when your home insurance claim is rejected
Has your home insurance claim been rejected? In this article, we’ll cover the reasons why, what you should do next, and where you can find help.
Published February 21, 2023
When you buy insurance, you are buying a promise that if something goes wrong and you suffer a loss, your insurer will put you back in the position you were in before the loss occurred. And in the UK 1.23 million people claim on their home insurance every day with insurers paying out £8m in claims each day. In the UK the acceptance rate for home insurance claims is 82%, which means that 18% of home insurance claims are rejected.
If a home insurance claim is rejected it can come as a shock and a blow to your finances if you find yourself having to pay for something you thought was insured. In this article we will look at the reasons claims are rejected, what you can do if you feel your claim was incorrectly rejected, and where you can find help.
Reasons home insurance claims are denied
If your insurer has rejected your home insurance claim, it is important to ask them for the reason the claim was denied. Insurers will have to give you this information. Here are some of the most common reasons home insurance claims are denied.
Lack of cover: Should the particular incident or damage fall outside the coverage outlined in your policy; the claim might be rejected. It’s crucial to carefully review your policy to ensure it aligns with the type of loss you’re claiming.
Late making the claim: Delays in reporting the incident to your insurer may lead to scepticism and late notification and could be grounds for rejecting your claim.
Giving false or inaccurate information: If the insurer finds out that you haven’t given them accurate information about the claim intentionally or by mistake, they may reject the claim.
Wear and tear: Over time things get worn out, wear and tear is not insured because it is considered to be a gradual and inevitable process that occurs to all property over time. Insurance is designed to protect against sudden and unexpected losses, not against the gradual deterioration of property.
Not following the claims process: Insurers expect you to follow the correct claims process, and it might seem nit-picky but if you don’t follow this process then your insurer might reject your claim, some things that might see a claim rejected are failing to seek professional assistance or failing to obtain estimates for the repairs from approved vendors.
Technical reasons or sticking points: Insurers might tell you your claim has been rejected due to a technicality, i.e. the definition of storm was not met or an item stolen was being used for business purposes so not covered on a home insurance policy. We recommend reading your insurance schedule and policy wording, so you understand what it does and doesn’t cover.
Lack of reasonable care: This is potentially problematic in the sense that an insurance policy usually has a “duty of care” or “reasonable care” clause, which in essence means you (the policyholder) need to take reasonable steps to prevent a claim. For example, if you leave the house unlocked and you’re burgled, or you leave a laptop on your car seat. If the insurer feels like you were careless or didn’t take reasonable care, they may reject your insurance claim.
A denied home insurance claim in the UK can impact your premiums in the following ways:
- Increased premiums: The insurer may view you as a higher risk customer if you have made a claim, even if it was denied. This is because they may believe that you are more likely to make a claim in the future. As a result, they may charge you a higher premium to reflect this increased risk.
- Reduced cover: The insurer may also reduce the amount of cover that they are happy to give you. This is because they may be concerned that you are more likely to make a claim again in the future. As a result, they may offer you a policy with a lower cover limit or exclude certain types of cover from your policy.
- Difficulty finding insurance: It may be difficult to find home insurance if you have made a claim, especially if your claim was denied. This is because insurers may be reluctant to insure you if they view you as a high-risk customer. As a result, you may have to pay a higher premium or settle for a policy with less cover than you need.
However, the impact of a denied claim on your premiums will vary depending on the specific circumstances of your claim and your insurance provider.
What to do if your home insurance claim is denied
If your home insurance claim is denied, consider taking the following steps:
- Understand the reason for the denial or rejection of the claim: Ask your insurer to confirm the reason for the denial of your claim in writing. Understand the reasons for the denial and take note of any specific policy clauses or conditions cited.
- Review your policy: Read through the terms and conditions of your insurance policy. Ensure that the denial aligns with the language and provisions outlined in your policy.
- Contact your insurance company: You can ask the insurance company for clarification or try and negotiate with them. Seek a detailed explanation of the denial, as if there is an appeal process available, and ask for any supporting documentation or evidence they relied on in making their decision.
- Document everything: Keep thorough records of all communication with your insurance company. Document phone calls, emails, and any written correspondence. This documentation can be valuable if you need to escalate the matter.
- Consult an expert: Consider seeking advice from a professional Loss Assessor like Morgan Clark. Loss Assessors are professionals who specialise in assessing and negotiating insurance claims.
- Complain to your insurer: If you believe the denial is unjust, make a complaint with your insurance company. Present any additional evidence or information that may support your claim. Be persistent and follow the complaints process outlined by your insurer in your policy documents.
- Contact the Financial Ombudsman: If your complaint is unsuccessful or you feel like you have been unfairly treated, you may contact the Financial Ombudsman Service (FOS), a free and independent agency. You can make a complaint to the FOS once you have received. The final response from your insurance company or if eight weeks have passed and you haven’t had a response from your insurer.
How to minimise the chances of a home insurance claim being rejected in the future
While it is not always easy to know in advance if a claim will be rejected here are some tips to help you minimise the chances of a having a home insurance claim being rejected.
Check your policies are up to date and information is accurate: Regularly check that your insurance cover meets your needs, you don’t need to wait until the renewal date. You might need to add optional covers like accidental damage, cover for bikes or other expensive items. It’s a good idea to keep receipts of large purchases and take photos of valuables.
Make sure your home is well maintained: Making sure your home is in a good state of repair can help minimise the chance of a claim occurring, making repairs to protect your home as quickly as possible to make sure it is secure and weatherproof. If you have work done to the property keep details of the work carried out, who did it and copies of the receipts as these can be useful at a later date.
You have the level of insurance cover you need to protect you: There is a chance that you might be underinsured, meaning if you need to make a claim there won’t be enough insurance cover to pay for your losses. This is also known as the condition of average. Under the condition of average, if your property is insured for less than its full value and you make a claim, your insurer will only pay you a proportionate amount of the claim based on the percentage of the property’s value that is insured. For example, if your property is worth £100,000 and you have insured it for only £80,000, you will only receive 80% of any claim you make. One common misconception is that the condition of average only applies to total losses. However, it can also apply to partial losses. For example, if you have a fire that damages your property to the tune of £10,000, and your property is insured for only £80,000, you will only receive £8,000 from your insurer. This is to deter people from not buying enough insurance to cover their losses.
Getting help with a rejected home insurance claim
Navigating an insurance claim process can often be overwhelming and stressful. It might seem like a solitary journey, but you’re not alone.
If you find yourself in need of specialised, independent assistance, Morgan Clark’s team of Loss Assessors are here to offer support. While we can provide guidance and advice, our ability to assist further would depend on the specifics of your situation, including the circumstances surrounding the claim and insurer’s response.
Our experienced Loss Assessors at Morgan Clark have a track record of successfully helping policyholders overturn rejected claims, ensuring they receive the compensation they rightfully deserve. A prime example of this is Mr. Singh’s case: despite his claim initially being declined in September 2018 on the grounds of the property allegedly being unoccupied during the incident, he decided to challenge this decision with compelling evidence. Despite his persistence, the insurers maintained their stance, prompting Mr. Singh to escalate the matter to the Financial Ombudsman Service (FOS) for adjudication.
Throughout the extensive process, spanning from the incident in November 2015 to the resolution in July 2020, our team at Morgan Clark supported Mr. Singh every step of the way. Ultimately, the FOS ruled in our favour. The building claim was eventually settled for £95,000. Additionally, a further adjudication was necessary for loss of rent, resulting in a settlement of £19,872.00. This case serves as a testament to our commitment to fighting for our clients’ rights and ensuring fair outcomes.
If you’re facing a similar situation, don’t hesitate to contact us. We’re here to offer guidance when people need it most, and if we can take on your claim, we will support you throughout this challenging period and assist you in navigating the complaints process. Get in touch to learn more about how we can help you with your rejected insurance claim.
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