What to do if your car insurance provider won't pay out
If you’ve had a car insurance claim rejected and want to dispute it, here’s what to do. We’ll also tell you what invalidates car insurance so you can avoid problems in the future.
If you’ve had a car insurance claim rejected and want to dispute it, here’s what to do. We’ll also tell you what invalidates car insurance so you can avoid problems in the future.
Why might my car insurance provider dispute a car insurance claim?
Car insurance claim disputes tend to come about when someone’s expecting a pay-out, but their insurance provider says they aren’t covered.
There are sometimes disputes about who’s at fault in an accident, especially if another driver is involved and you disagree about what happened.
If your car’s been stolen, it may be that your insurance provider thinks you didn’t take enough care to prevent the theft.
In these circumstances, an insurance provider might refuse to pay, or offer you a smaller sum than you were expecting.
Disputes might also arise because you feel that your no claims discount has been lost through no fault of your own, or that repairs to your car following an accident haven’t been carried out properly.
Why might my car insurance claim be rejected?
There are a few reasons your car insurance claim might be rejected, or your insurance provider agrees to pay less than expected. These include:
- You’re not covered — if you make a claim for something you’re not covered for in your policy. Always check the terms and conditions carefully before making a claim.
- Not disclosing information — if you haven’t told your insurance provider about something that affects your chances of making a claim – a past driving conviction, for example.
- Giving incorrect information — if you’ve given information that isn’t 100% true, your provider could refuse a claim. One example is insurance ‘fronting’, where a new driver has their car insured in a more experienced driver’s name but they’re the main driver.
- Using your car for business or commuting — if you’re only covered for domestic, social and pleasure use, you won’t be able to claim if you have an accident when commuting.
- Not maintaining your car — if an accident happens because your car isn’t roadworthy, your claim may be turned down. The same is true if the cause of the accident is lack of care at the wheel.
- Drink driving — if you have an accident while driving under the influence of alcohol or drugs, your claim is likely to be rejected.
- Not taking ‘reasonable care’ — most policies say you must take reasonable care to protect your vehicle from loss or damage. If, for example, you leave your keys in your car and it’s stolen, you won’t be covered.
- Theft by deception — if you give your car keys to a potential buyer and they drive off with it, you’ll probably invalidate your car insurance.
How do I dispute a claim on my car insurance?
If your car insurance claim has been rejected and you want to take it further, you can follow these steps:
1. First of all, check your policy documents to see if there are any exclusions. All policies vary, so you can’t assume something’s covered by your insurance just because a previous policy covered it.
2. If your provider hasn’t explained why your claim was rejected, write to them explaining why you’re complaining and what action you’d like them to take. Keep a copy of their response for your records
Your letter should outline your claim circumstances, and when you expect them to reply.
3. If you’re not satisfied with the explanation you receive, you can formally complain using the complaints process detailed on your insurance provider’s website or in your insurance documents.
4. If you’ve tried the official complaints process and are still unhappy with the outcome, you can use the Financial Ombudsman Service. This is an impartial organisation that can investigate companies covered by the Financial Conduct Authority – including all insurance providers.
After hearing your case, the Ombudsman may begin a formal investigation. Your insurance provider has to abide by the Ombudsman’s decision.
How to prevent claim rejections in the future
The following tips could help lower the chances of further claims disputes in the future:
- Get the right cover — make sure you have the right type of cover for your driving needs. For example, if you commute to work, ensure your cover is for domestic, social, pleasure and commuting use.
- Check your details — make sure your details are correct and update them if necessary. Let your insurance provider know about any changes, like modifications, a job change or a new address.
- Be honest — withholding information or lying to your insurance provider isn’t worth the risk. Not only could your claim be rejected, but they may cancel your policy altogether.
- Keep your car well-maintained — regular servicing and maintenance will ensure your car is roadworthy. It will also prevent more expensive repairs further down the line.
- Use common security sense — park your car in a safe, well-lit place, make sure it’s locked and don’t leave items unattended, in clear sight for anyone to see.
- Get your claim in quickly — contact your insurance provider as soon as possible after an incident. You’ll usually have between 24 hours and seven days to get your claim in. If you need to report a crime, let the police know immediately. You’ll need a crime reference number to give to your insurance provider.
Frequently asked questions
Why has my insurance provider agreed to the claim but not the full pay-out?
Your insurance provider might pay out less than you expected because their market valuation of the vehicle or assessment of damage differs from yours.
Don’t forget that the pay-out you receive will be minus your agreed excess.
What are my options if my claim dispute is not successful?
If you don’t get the response you want from your insurance provider, the next step is to take your complaint to the Financial Ombudsman.
If the Financial Ombudsman decides against you and you’re still not happy, you can take your insurance provider to court. However, this is likely to cost a lot of money (possibly more than your insurance claim), so isn’t usually worth the hassle.
How long have I got to take my claim to the Financial Ombudsman?
If you can’t resolve the dispute with your insurance provider and want to take it to the Ombudsman, you’ll need to do it:
- Within six months of receiving a final response from your insurance provider
- Within six years of the event that triggered the claim.
Can a third-party claim be rejected?
A third-party claim – when someone claims against your car insurance – can be rejected if you weren’t responsible for what happened.
In some cases, a third-party claim is likely to be paid even if you’ve done something to invalidate your car insurance. For example, if you had an accident when drink driving and damaged someone else’s car, your insurance provider would pay up. But they’d probably try to reclaim the costs from you.
Can I claim against an uninsured driver?
Claiming against uninsured drivers can be tricky. You can claim through your provider as long as you have fully comprehensive car insurance, although the claim might be difficult to resolve. If you don’t have fully comprehensive insurance, you can try to claim through the Motor Insurers’ Bureau (MIB).
Will my car insurance go up if my claim is rejected?
Most likely yes. Even if your claim is rejected and you don’t get a pay-out, you’ve still made a claim.
Your insurance provider will consider you at higher risk of making another claim in the future, so they may increase the cost of your premium to cover any potential pay-outs.
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Julie Daniels - Motor insurance expert
Julie is passionate about delivering a great customer experience and rewarding people for saving on their insurance through our loyalty and rewards programme. She’s spoken to the media, including outlets like Sky News and Capital FM, about car and home insurance, as well as our rewards scheme.
Rebecca Goodman - personal finance expert
Rebecca Goodman is a freelance financial journalist who specialises in insurance, personal finance and consumer affairs. Rebecca regularly writes for national newspapers including The Independent and The Mail on Sunday on a wide-range of financial topics. She covers everything from money-saving tips and holiday advice to investigations into how energy efficient appliances can cut the cost of household bills and the impact donating money can have on those in need. Along with features in national papers, Rebecca also writes news stories for websites including Yourmoney.com and The Money Edit.