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Insurance Act 2015 - Modernised insurance contract law; governs duty of fair presentation and remedies for breach
Consumer Insurance (Disclosure and Representations) Act 2012 (CIDRA) - Protects consumers from harsh non-disclosure rules
FCA Insurance: Conduct of Business Sourcebook (ICOBS) - Rules on how insurers must handle claims
FCA Principles for Businesses - Especially Principle 6 (treating customers fairly) and Principle 7 (clear communications)
Consumer Rights Act 2015, Part 2 - Unfair terms in insurance contracts
The insurer claims you failed to disclose a material fact. Under CIDRA, Section 2, consumers only need to take reasonable care not to make a misrepresentation. The insurer must show:
They asked a clear and specific question
Your answer was a qualifying misrepresentation (careless or deliberate)
The misrepresentation was the reason for rejection (not just any inaccuracy)
The insurer claims the loss falls under an exclusion. Check:
Was the exclusion brought to your attention before you bought the policy? (ICOBS 6.1.5R)
Is the exclusion drafted in plain and intelligible language? (Consumer Rights Act 2015, Section 68)
Is the exclusion fair under the unfair terms test? (CRA 2015, Section 62)
The insurer rejects because you notified them too late. Under the Insurance Act 2015, Section 13A (implied term of good faith), the insurer must show they suffered actual prejudice from the late notification. Simply being late is not always sufficient grounds.
Common in home insurance. Challenge by obtaining an independent surveyor or engineer's report showing the damage was caused by a sudden, insured event rather than gradual deterioration.
Ask for the specific policy terms, clauses, and evidence relied upon. Under ICOBS 8.1.1R, the insurer must handle claims promptly and fairly and not unreasonably reject a claim.
Carefully read the definition of the insured peril, the exclusions, and the conditions. Policy terms are interpreted against the insurer under the contra proferentem rule.
Independent expert reports (surveyor, mechanic, medical professional)
Photographs and dated records
Correspondence showing what the insurer told you at the point of sale
Write to the insurer's complaints department citing:
The specific ICOBS rules or Insurance Act provisions breached
Why their interpretation of the policy is incorrect
What outcome you expect (claim to be paid, plus any consequential losses)
If the complaint is rejected or unresolved after 8 weeks, refer to the FOS. The FOS decides cases based on what is fair and reasonable in all the circumstances, not just the strict legal position, and often overturns rejections that are technically within the policy wording but unfair in practice.Always get independent evidence - An expert report carries significant weight
Check the Insurance Product Information Document (IPID) - This summary may differ from what the insurer now claims
Record all phone calls - You are entitled to do so under UK law; inform the other party at the start
Do not accept the first "no" - Many rejections are overturned at the internal complaint stage
Time limits apply - You have 6 years from the rejection (or 3 years from when you knew or should have known) to bring a FOS complaint
Financial Services
Insurance Claim Rejections
Overview
When an insurance company rejects your claim, it can feel like a dead end. However, insurers must follow strict FCA rules, and a significant proportion of rejected claims are successfully overturned on appeal or through the Financial Ombudsman Service. This guide explains your rights and how to challenge an unfair rejection.
Key Legislation and Regulation
Common Reasons for Rejection (and How to Challenge)
1. Non-Disclosure or Misrepresentation
The insurer claims you failed to disclose a material fact. Under CIDRA, Section 2, consumers only need to take reasonable care not to make a misrepresentation. The insurer must show:
If the misrepresentation was innocent or merely careless, the insurer cannot simply void the policy. Under CIDRA Schedule 1, the remedy depends on what the insurer would have done had they known the truth.
2. Policy Exclusions
The insurer claims the loss falls under an exclusion. Check:
3. Late Notification
The insurer rejects because you notified them too late. Under the Insurance Act 2015, Section 13A (implied term of good faith), the insurer must show they suffered actual prejudice from the late notification. Simply being late is not always sufficient grounds.
4. Wear and Tear / Maintenance
Common in home insurance. Challenge by obtaining an independent surveyor or engineer's report showing the damage was caused by a sudden, insured event rather than gradual deterioration.
Step-by-Step: How to Challenge a Rejection
Step 1: Request the Full Rejection Letter
Ask for the specific policy terms, clauses, and evidence relied upon. Under ICOBS 8.1.1R, the insurer must handle claims promptly and fairly and not unreasonably reject a claim.
Step 2: Review Your Policy Wording
Carefully read the definition of the insured peril, the exclusions, and the conditions. Policy terms are interpreted against the insurer under the contra proferentem rule.
Step 3: Gather Supporting Evidence
Step 4: Submit a Formal Complaint
Write to the insurer's complaints department citing:
Step 5: Escalate to the Financial Ombudsman Service
If the complaint is rejected or unresolved after 8 weeks, refer to the FOS. The FOS decides cases based on what is fair and reasonable in all the circumstances, not just the strict legal position, and often overturns rejections that are technically within the policy wording but unfair in practice.
Tips for Success
EvenStance Can Help
EvenStance can analyse your rejection letter against your policy wording, identify the strongest regulatory arguments, generate a formal challenge letter, and track the deadline for FOS referral if needed.