Dealing With A Rejected Car Insurance Claim

If your car insurance company does not feel entirely happy in paying a claim, they may downsize or even refuse to pay the claim amount filed with them.

For example, if your claim is regarding a vehicle, or property within a vehicle, being stolen and the insurers have reason to believe that you were at fault (for example by leaving the car unlocked overnight), you may struggle to successfully get a payout from them.

This is where making sure all details given during the application stage pays off. If the insurer believes that your claim is being made as a result of the car being used or kept in a way not declared in the application (such as using your car for business purposes whilst only claiming domestic cover), they may reject the claim - this is why lying on your application in order to obtain cheaper car insurance can be a false economy.

This also applies to the claim itself; do not be tempted to lie about what happened in order to claim a little more out of the company - but this works both ways. Make sure you can prove ownership of anything that may be stolen from the vehicle, as if you cannot prove you owned that iPod or expensive laptop, your insurer is far less likely to pay for it.

If you drive a classic car and do not have an agreed value set with your insurer, you may lose money as the company may simply consider the market value of the vehicle itself, not its worth as a restoration project.

As discussed previously, all policies are held in “utmost good faith”, meaning that it is your responsibility to make sure that all information your car insurance has on you and your vehicle is correct and up-to-date, and that you inform them of any changes that may be important without being prompted. Insurance companies assume all information on file is true, and will only investigate in the event of a claim.

What if I am not happy with my claim result?

You are perfectly within your rights to dispute a claim being rejected or downsized by your insurer. There are a number of reasons you might want to do so, and we will tell you how to go about doing that shortly.

There are a number of reasons people may dispute a claim, including a difference in interpretation of small print and policy guidelines or a disagreement on the value of a claimed for item.

The first step is to inform your insurer that you wish to dispute the claim; although unless you have additional evidence or can make an effective claim with regards to a difference in interpretation you may find this is not particularly helpful - although you can haggle with insurers with regards to item values.

If worst comes to worst however, the Financial Ombudsman can help you dispute a claim.

How the Financial Ombudsman can help

The Financial Ombudsman Service (FOS) deals with disputes between insurance companies and their policyholders, such as rejected or downsized claims. Each year, thousands of car insurance disputes are overseen by the service.

You should not contact the FOS until your insurer has made clear that they have made their final response in order to your dispute, or has not contacted you in eight weeks regarding your case. The FOS specialises in dealing with disputes like these, and strives to reach the fairest decision for both parties.

You can either call the FOS on 0845 080 1800 or write to:

The Financial Ombudsman Service
South Quay Plaza
183 Marsh Wall
Or visit the website at: http://www.financial-ombudsman.org.uk/