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    • Posted by: Insurance Claims
    • Category: facts about insurance claims

    There are various reasons why your insurers might repudiate (not pay out) your claim.  Alternatively, they may pay your claim but reduce the pay-out to much less than you had expected.  Let’s go through some of the more common reasons that insurers might refuse to pay you all of your claim or totally repudiate it.

    insurance claim being denied

    • A major reason is that there is a condition in the policy that requires you to follow a specific instruction.  For example, there may be a condition that requires you to have window locks on all of your ground floor windows.  If an intruder gets in through a ground floor window and a window lock has not been fitted, then there is every likelihood that your claim will be refused in the event of a burglary.
    • On the date that the incident happened, it turns out that the insurance policy had not yet come into force.  For example, some policies insist that a period of 14 / 30 days elapses before the policy comes ‘into play’.  This is particularly the case on medical policies.
    • Your insurance company has invalidated the policy because you withheld information from them when you filled out the proposal form.  For example, if your insurance company have asked whether you have had any criminal convictions and you do not give an honest answer then there is every possibility that your claim will be refused and your premium refunded.  Many new rules have come into force since April 2013, particularly regarding the extent of information you need to supply without being asked by your insurers.  However, it is our contention that those rules are still ‘grey’ and that it is far better to offer information regarding, for example, unspent convictions rather than to expect your insurers to specifically ask a question.
    • You may find that the item you are claiming for is not covered by your policy.  One of a host of examples is where rodents have chewed through cables in your home causing electrical failures etc.  It will be found that rodent damage is specifically excluded in most residential and commercial policies.
    • Circumstances may have changed from when you took out the policy to the date that you have put in a claim.  By way of a somewhat extreme example but nonetheless common, you or a member of your household has had a criminal conviction after the policy was taken out.  This would very much alter the insurance company’s view of the risk that it has to consider before allowing for the policy to continue running.
    • If you have not paid your monthly premium instalments then your insurers would, not unreasonably, consider the policy void.
    • Your insurance company suggest that you have exaggerated the claim and are dishonestly claiming for much more than you have actually lost.  However, and of interest is that some years ago there was a case where an insurance company did refuse to pay out a commercial claim because they said that the claim had been exaggerated.  On appealing the insurance company’s refusal to pay, three Law Lords agreed that an insurance claim can be exaggerated for the purposes of negotiation but they were not in agreement as to quite how much the exaggeration should be before it is considered dishonestly exaggerated!
    • Don’t be in any doubt that insurers or their representatives, the loss adjusters, can and do often make mistakes when refusing to pay a claim and should you feel that they are in indeed being unreasonable you can attempt to negotiate with them yourself or to have a professional insurance claim negotiator, (who will know the ropes better than you will), to negotiate on your behalf.  Remember that the insurance company must give you a precise reason for either voiding your policy or refusing to pay the claim and it is for you to check the wording of the policy so as to satisfy yourself that they are being reasonable or otherwise.  Of course, you are also at liberty to refer your case to the Insurance Ombudsman Bureau but not before you have exhausted your insurer’s official complaints process.

    My insurers won’t fully pay my claim – why?

    There are various reasons that your insurers might agree to pay only a partial amount, but not fully.

    • There may be a policy limit capping the amount that your insurers will pay for any one item.
    • You are underinsured because you have either underestimated the total value of the contents of your home for example and while we find this type of underinsurance very common, it has to be said that it is a very rare instance that we find that underinsurance is accidental.  We cannot stress enough that being underinsured is the falsest of economies.
    • You may have a large excess on your policy.  For example, you may be making a claim for £5,000 which is fully met, but you have a £1,000 excess on your policy which you have agreed to in order to get the premium down considerably.
    • The item that you are claiming for is very old or is subject to wear and tear (for example clothing) and your insurance company will not pay you the cost of replacing that item as you have already enjoyed use of it.  However, if your policy is one stating that you will receive ‘new for old’ then certainly your insurers will commit to replacing it as new.

    We hope this guide has been helpful for you. If you need any help with your insurance claim, please do not hesitate to contact Salmon Assessors. You can either give us a call on: 020 8346 6060 or send us an email at: