Insurance Claim Rejected? What to Do Next — UK Complaints & Ombudsman Guide

Having an insurance claim rejected or significantly underpaid is frustrating, especially when you’ve been paying premiums for years. But a rejection isn’t always the final answer — you have clear rights and a well-defined process to challenge the decision.

Common Reasons Claims Are Rejected

Understanding why insurers reject claims helps you build your challenge:

Policy Exclusions

Your policy lists specific things it doesn’t cover. Common exclusions:

• Wear and tear — gradual deterioration isn’t covered (e.g., a roof that’s been leaking for months)
• Maintenance failures — damage resulting from neglect (e.g., burst pipes in an unlagged loft)
• Specific perils excluded — some policies exclude flood, subsidence, or certain property types
• Business use — standard home insurance doesn’t cover home businesses beyond basic equipment

Non-Disclosure

You didn’t declare something relevant when buying or renewing:

• Previous claims
• Criminal convictions
• Property modifications
• Flood risk or subsidence history
• Change of occupancy (tenants, Airbnb)

Policy Conditions Not Met

• Doors or windows unlocked during a theft
• Property unoccupied for more than 30 days
• Alarms not set when required
• Failure to maintain the property as a prudent homeowner

Under-Insurance

Your sum insured is below the actual replacement cost. Many insurers apply the condition of average — if you’re insured for 50% of the true value, they pay only 50% of any claim.

Late Notification

You didn’t report the incident within the required timeframe (typically “as soon as reasonably possible”).

Step 1 — Get the Rejection in Writing

Ask your insurer to explain the rejection in writing, citing:

• The specific policy clause they’re relying on
• The evidence they’ve used to make their decision
• The exact reason — not just “policy exclusion” but which exclusion and why it applies

This is your legal right. Without specific written reasons, you can’t effectively challenge the decision.

Step 2 — Review Your Policy Carefully

Read the full policy document (not just the summary), paying attention to:

• Definitions section — how the policy defines key terms like “storm,” “accidental damage,” “maintenance”
• Exclusions section — does the cited exclusion actually apply to your situation?
• Conditions section — did you genuinely breach the condition they’re relying on?
• General terms — some conditions only apply if the breach is relevant to the claim

Key legal protection: The Insurance Act 2015 and Consumer Insurance Act 2012 mean insurers can’t reject claims for trivial or irrelevant breaches. A breach of policy terms only matters if it’s connected to the loss.

Step 3 — Gather Your Evidence

Build your case with:

• Photographs and video from the time of the incident
• Receipts and valuations for damaged or stolen items
• Contractor assessments or independent surveyor reports
• Police reports or crime reference numbers
• Weather data from the Met Office (for storm claims)
• Correspondence between you and the insurer
• Expert opinions that contradict the insurer’s assessment

Step 4 — Make a Formal Complaint

Write to your insurer’s complaints department (not the claims team). Include:

1. Your policy number and claim reference
2. Why you disagree with the decision, referencing specific policy wording
3. Your evidence supporting the claim
4. What outcome you want (full payment, partial payment, reassessment)
5. A clear statement that this is a formal complaint

What Happens Next

The insurer must:

• Acknowledge your complaint within 5 working days
• Provide a final response within 8 weeks
• Include information about the Financial Ombudsman Service if they reject your complaint

Step 5 — Escalate to the Financial Ombudsman Service

If the insurer doesn’t resolve your complaint within 8 weeks, or you’re unhappy with their final response, you can complain to the Financial Ombudsman Service (FOS).

How FOS Works

1. Submit your complaint — online at financial-ombudsman.org.uk, by phone, or by post
2. FOS contacts your insurer — they must provide their case file
3. Case assessment — an adjudicator reviews evidence from both sides
4. Initial view — the adjudicator gives their opinion
5. Final decision — if either party disagrees with the initial view, an Ombudsman makes a binding final decision

Key FOS Facts

What FOS Considers

FOS doesn’t just check the policy wording — they consider what’s fair and reasonable:

• Was the policy sold properly? (Did you understand what was excluded?)
• Did the insurer make the exclusion clear at the point of sale?
• Is the insurer’s interpretation of the policy wording reasonable?
• Was the consumer’s breach proportionate to the rejection?

When to Get Professional Help

Loss Assessors

A loss assessor works for you (unlike a loss adjuster, who works for the insurer). They:

• Review your policy and the rejection
• Prepare and present your claim professionally
• Negotiate with the insurer on your behalf
• Typically charge 5-10% of the final settlement

Best for claims over £5,000 where you believe the insurer is significantly underpaying.

Solicitors

For very large claims or clear bad faith by the insurer:

• Insurance dispute solicitors can take cases on a no-win-no-fee basis
• Court action is a last resort after FOS
• The small claims court handles disputes up to £10,000
• Legal costs can be recovered if the insurer is found to have acted unreasonably

Common Challenges and How to Win Them

“It’s Wear and Tear, Not a Covered Event”

Your argument: The damage was caused by a sudden event (storm, escape of water), not gradual deterioration. Provide weather reports, contractor evidence of the sudden failure, and evidence of your regular maintenance.

“You Didn’t Disclose Previous Claims”

Your argument: Under the Consumer Insurance Act 2012, the insurer must show they asked a clear question that you answered incorrectly. If the question was ambiguous or you made a reasonable error, they can’t void the policy — they can only adjust terms proportionally.

“The Property Was Unsecured”

Your argument: The breach of the security condition must be connected to the loss. If your back door was unlocked but the thief entered through a smashed front window, the unlocked door is irrelevant.

“You’re Under-Insured”

Your argument: If the insurer sold you the policy (or their quote engine suggested the sum insured), they share responsibility for the under-insurance. FOS has ruled against insurers who didn’t prompt adequate sum insured calculations.

“Your Claim Amount Is Too High”

Your argument: Provide independent valuations, replacement quotes, and evidence of the items’ condition. For contents, photos taken before the loss are powerful evidence.

Preventing Future Rejections

1. Read your policy annually — understand exactly what’s covered and excluded
2. Update your insurer about changes — renovations, new high-value items, tenants
3. Keep evidence — photograph rooms and possessions, keep receipts
4. Maintain your property — fix small issues before they become claim-worthy problems
5. Be accurate when buying — declare everything honestly, even if it raises your premium
6. Notify promptly — report incidents as soon as possible, even minor ones

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