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If you have had an insurance claim that has been rejected (also known as repudiation) by your Insurance company, it may often feel like all hope is lost. Here we try to address some of the problems which can cause an insurance claim to be rejected and what you can do to avoid this.
Most rejected insurance claims and policies we see are under insured. The value of reinstating your property is not what the market value is. Remember that about 30% of the rebuild is in the ground. Add to that legal, professional and local authority fees and you can see that the sum you have covered in the policy gradually eroding.
Make sure your home is not undervalued as this is the most an insurer will pay out. In some cases an insurer may even return your premium and cancel the policy as you have grossly misrepresented their risk. Remember it's your responsibility not the insurance company to obtain accurate values for reinstatement.
Another reason insurers reject property insurance claims is if the loss or damage was the result of 'gradual deterioration' or a lack of 'maintenance', you will not be covered. Things such as failed damp proof course and some rot are examples of this.
Poor design and faulty workmanship. In this instance you will not be covered. If you believe the cause to be as a result of negligence by a contractor then you may be wise to seek legal advice regarding a claim against the supplier or installer. Your building insurer is likely to reject (repudiate) any claim in this regard.
Beware of taking long holidays. If you leave a property unoccupied for 30 consecutive days or more without advising your insurer, they could have grounds to repudiate a claim. This is especially true for fire claim damage and water damage.
Material change in the risk - insurers must be informed of any 'material increase' in the value of the risk they are covering. For instance, with home prices and building costs escalating so quickly, the replacement value of homes has increased. Any alterations to your property will likely increase the value and there could be risk of damage during construction. If this happens, seek the advice of an insurance claims management company.
Non-compliance with security requirements - make sure you are familiar with policy conditions and endorsements. Should you fail to comply with your policy conditions on minimum security, your claim could be rejected.
You must have what's known as an 'insurable interest' in the property, in other words a financial interest in insuring the asset. If you only part own it or not at all then you will find insurers will reduce proportionally or even refuse to pay at all.
Check that you have provided all details in the policy form as correct and accurately as possible to your best knowledge. Insurance companies will try to reject claims on the basis inaccurate provided information.
Loss Assessors Oakleafe Claims offer a mid term survey to identify material changes and problem areas in a policy that needs the policyholders attention. Key to this are the warranties and conditions that are the spine of any cover.
The term repudiation in Insurance claims management refers to the rejection by Insurers to pay a claim. They will relate this rejection to a specific reason such as non-adherence to a warranty or condition in your contract of insurance.
It is always advisable to seek the help of a claims management company in this instance. Sometimes it can be easily turned around with the production of information in the right manner which has been misinterpreted by the Loss adjuster.
One of the most disappointing and frustrating things to deal with is having your claim rejected and you need to know what to do when Insurance Company Refuses To Pay. According to the Association of British Insurers, 21% of home insurance claims filed with insurance companies are rejected. The reasons vary from the inadequate coverage to non-disclosure and may include the insurer deeming the damage to be your fault as a result of lack of care.
There are several things you can do if an Insurance Company Refuses To Pay. First, you can work directly with your insurance company and hire a Loss Assessor such as Oakleafe Claims to present a solid case in your favour. If this does not work, you can make a complaint with the Financial Ombudsman Service. No matter which way you decide to proceed to be persistent in these cases goes a long way.
While there are numerous reasons claims might get rejected a few are common, such as lack of adequate coverage, providing inaccurate information on a claim and the damage being deemed the claimant's fault. What might constitute wrong information is, for example, personal data not having been updated, such as occupation or marital status, or if you set up a business at your home and fail to notify the insurer of this and if this is the case an Insurance Company is likely to refuse to pay.
Lack of coverage is the most common reason insurance companies refuse to pay but it's not always straightforward to many people. For instance, you may have a home policy that does not include contents and even if you do have contents cover, some items such as valuables may need additional cover or portable items cover. This is where knowing the exact wording of your policy becomes necessary and you should read it carefully in order to ensure the Insurance Company cannot refuse to pay.
The type of damage suffered might be an issue when the insurer says your loss is a result of your own fault, for example when the insurance company claims that your loss is actually further damage by failing to instil immediate repairs or lack of care such as not maintaining your home properly. In cases of flooding the insurer could say that your water damage was caused over time because of a blocked gutter. Always keep your home in good condition and have receipts for maintenance work available.
Policyholders sometimes undervalue their property and belongings on purpose in order to pay lower insurance premiums. This is always a mistake and may cost you much more than a lifetime of monthly savings in the end. You never want to claim that a house worth £200,000 is worth £100,000 because in the event of a fire or flood your claim is automatically reduced by 50%.
When it comes to contents insurance it is easy to assign value to main property contents such as furniture but more difficult to assign proper value to all the smaller things such as towels, books, and portable devices. These are often undervalued and can add up very quickly if they need to be replaced. However, the settlement you receive from the insurance company is according to figures listed in your policy so if you undervalue your property your claim will be much less than your loss is worth. Ultimately, the insured is responsible for providing the correct figures in order to ensure the Insurance Company cannot refuse to pay.
Honest mistakes do happen when providing information, but you will have to prove that it was unintentional. The law specifies four categories of non-disclosure: deliberate, reckless, innocent and inadvertent. Deliberate non-disclosure is when you intentionally provide false information. Reckless non-disclosure is when you provide information not caring whether it is true or not.
Innocent non-disclosure is when you try to be accurate but maybe the question was unclear or misunderstood. Finally, inadvertent non-disclosure is unintentionally providing inaccurate information. In the case of the last two, if you can show that the misleading information was unintentional your claim will still be valid, and it should be paid. However, in cases of deliberate or reckless non-disclosure, the Insurance Company can refuse to pay.
When the insurance company refuses to pay, first make sure the claim forms were correctly filled out and that all information provided was accurate. No matter what the reason for rejecting your claim was by the insurer, hiring a Loss Assessor such as Oakleafe Claims is a good idea because they will be able to guide you through the process. They will itemize your damage and expertly assess the type of loss providing detailed documentation to argue your case with the insurance company directly or through other organisations later.
You can also take your case to the Financial Ombudsman Service, which deal with over 1,500 complaints about insurer refusals a year. Always know your policy and follow up with your insurance company. If an Insurance Company refuses to pay, ask for a justification for their reasons in writing. This is documentation you can use later and one you can provide to the Financial Ombudsman Service.
When the Insurance Company refuses to pay the experience can be very frustrating and upsetting but it does need to be the end of the matter. There is help available and if you feel that your claim is valid, and the insurer is being unreasonable chances are that you will be able to prove it.
The key is always documentation and hiring a Loss Assessor such as Oakleafe Claims goes a long way towards that end. Their documentation of your loss may be all that's needed to change the insurer's opinion of your claim. Even if it isn't, be persistent, ask for justification from the insurance company, have the Loss Assessor prepare a proof of loss and take your complaint to the Financial Ombudsman Service.
If you have been declined whilst trying to claim on your domestic or commercial insurance, we can help. We can also help with professional services, for example, Brokers, VAR Valuations and Managing Agents.
