We often get asked, when might an insurer not pay a claim? I understand how frustrating it can be when a claim is denied. While insurance is designed to provide financial protection, there are specific circumstances under which a claim may not be paid out.
So, we’ve put together a fact sheet to help you learn what you need to know:
1. Policy Exclusions
Insurance policies come with exclusions, which are specific situations or events that aren't covered. For example, if you're involved in an accident while driving under the influence of alcohol or drugs, your claim may be denied. It's crucial to thoroughly read your policy to understand what's included and what's not.
2. Non-Disclosure of Information
When applying for insurance, you're required to disclose all relevant information. Failing to do so can lead to a denied claim. For example, if you omit details about a pre-existing medical condition or a previous claim, the insurer may refuse to pay out.
3. Fraudulent Claims
Providing false or misleading information is considered fraud. If an insurer suspects that a claim is fraudulent, they have the right to deny it. Always ensure that the information you provide is accurate and truthful.
4. Lapsed or Cancelled Policies
If your policy has lapsed due to missed payments or has been cancelled, any claims made during this period won't be honoured. It's essential to keep up with premium payments and renew your policy on time.
5. Claims Below the Excess
If the cost of the damage or loss is less than your policy's excess, the insurer won't pay out. For example, if your excess is £250 and the damage amounts to £200, you would bear the full cost.
6. Poor Maintenance
In cases like vehicle insurance, if your car isn't properly maintained and this leads to damage, your claim may be denied. Regular maintenance is not only good practice but also a requirement in many policies.
7. Failure to Report Promptly
Delaying the reporting of an incident can result in a denied claim. Insurers typically require that claims be reported within a certain timeframe. Always notify your insurer as soon as possible after an incident.
What to Do If Your Claim Is Denied
If your claim is denied, don't panic. Here's what you can do:
- Understand the Reason: Insurers must provide a written explanation for the denial. Review this carefully to understand the basis of their decision.
- Review Your Policy: Compare the insurer's reasons with your policy's terms and conditions to see if the denial is justified.
- Contact the Insurer: Reach out to your insurer to discuss the decision. They may be able to provide further clarification or reconsider their stance.
- File a Complaint: If you're unsatisfied with the insurer's response, you can file a complaint with the Financial Ombudsman Service (FOS). They offer free and independent services to resolve disputes between consumers and financial businesses.
Need Assistance?
If you're unsure about your insurance policy or need help with a denied claim, don't hesitate to get in touch. As experienced insurance advisors, we're here to help you navigate the complexities of insurance and ensure you have the coverage you need. Contact us today for a consultation.
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