Claims Advice Line

Insurance Claim Rejected, Delayed or Underpaid? What Can You Do Next?

Most people buy insurance for one simple reason: if something goes seriously wrong, they expect their insurer to be there.

Unfortunately, making a claim does not always result in a straightforward payment.

Claims can be rejected completely. Settlement offers can come in far below what the policyholder expected. Repairs can be disputed. Insurers may ask for more and more information, or a claim can simply appear to stop moving.

For consumers and businesses, this can be extremely frustrating — particularly when the loss itself has already caused financial pressure.

But an insurer's first decision does not necessarily mean the dispute is over.

Why Do Insurance Claims Become Disputed?

There are many reasons why an insurer may reject, reduce or delay a claim.

Common disputes can involve:

• an insurer saying the loss is not covered by the policy;
• reliance on a policy exclusion;
• allegations of non-disclosure or misrepresentation;
• disagreement over the cause of the damage;
• an insurer saying a property or asset was underinsured;
• a settlement valuation that appears too low;
• disagreement over the cost or scope of repairs;
• delays involving loss adjusters, contractors or further investigations;
• or, in more serious cases, allegations that some part of the claim is fraudulent.

The important point is that the reason given by the insurer needs to be understood properly.

Simply being told that a claim is "not covered" does not explain whether the insurer has interpreted the policy correctly or whether the available evidence supports that conclusion.

Start With the Insurer's Decision

If your claim has been rejected or reduced, one of the most important documents is usually the insurer's written decision.

Look at exactly what the insurer says.

Has it identified a particular policy term?

Is it relying on an exclusion?

Does it dispute what caused the loss?

Is the disagreement actually about the amount being claimed rather than whether the claim is covered?

Sometimes a dispute that initially appears complicated becomes much clearer once the insurer's reasoning is separated into individual issues.

What If the Settlement Offer Is Too Low?

An insurance dispute does not have to involve a complete rejection.

A policyholder may accept that the insurer is willing to pay but disagree strongly with the amount offered.

This can happen with:

• building repairs;
• contents claims;
• vehicle valuations;
• business losses;
• reinstatement costs;
• replacement items;
• or deductions applied by the insurer.

A low settlement should be considered against the policy wording, the evidence of loss and the basis on which the insurer has calculated its offer.

Independent quotations, valuations, photographs, invoices and expert evidence can sometimes become particularly important.

What If the Insurance Claim Is Taking Too Long?

Some insurance claims genuinely require investigation.

That does not mean a policyholder should simply accept an open-ended delay.

If a claim appears to have stalled, it can be useful to establish:

• what the insurer says is still outstanding;
• who is responsible for the next step;
• whether information has already been supplied;
• whether an expert or loss adjuster is involved;
• and when the insurer expects to make its decision.

A clear written record of the claim can become important if the handling of the matter itself later becomes part of the dispute.

Keep the Evidence

One of the most common mistakes in a disputed insurance claim is failing to keep a proper record.

Depending on the type of claim, useful evidence could include:

• the insurance policy and schedule;
• the insurer's rejection letter or settlement offer;
• emails and correspondence;
• photographs and videos;
• repair quotations;
• invoices and receipts;
• surveyor or expert reports;
• loss adjuster reports;
• valuations;
• and a clear chronology of what happened.

You do not necessarily need every possible document before asking for help.

But preserving what you already have can make it much easier for someone independent to understand what has happened.

An Insurer's Decision May Be Challenged

Depending on the circumstances, the next step might involve further evidence, a formal complaint, negotiation, an external dispute-resolution route or, in suitable cases, litigation.

The right route depends on the policy, value of the dispute, evidence, type of policyholder and the stage already reached.

This is also why simply copying a template complaint from the internet may not always be the best approach.

A strong challenge should deal with the actual reason the insurer has given for rejecting, delaying or reducing the claim.

Specialist Help With Insurance Claim Disputes

Insurance disputes can involve detailed policy wording, technical evidence, valuations and legal issues that are quite different from many of the financial and consumer claims normally seen by Claims Advice Line.

For people who need specialist support with a disputed insurance claim, Insurance Dispute Service focuses specifically on rejected, underpaid, delayed and disputed insurance claims.

Their team can review the insurer's decision, policy wording and supporting evidence before explaining the strongest realistic options available.

If your insurer has rejected your claim completely, you can also read more about getting specialist help with a rejected insurance claim .

Do Not Assume the First Answer Is the Final Answer

Insurance policies can be complicated and not every dispute will succeed.

But if a substantial claim has been rejected, delayed or reduced, it can be worth understanding exactly why before accepting the insurer's position.

The starting point is normally simple: gather the policy, the insurer's decision and the most important evidence relating to the loss.

From there, you can decide whether the insurer's position should be accepted — or whether it deserves to be challenged.

Claims Advice Line