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.

Alex Hasty
Insurance and finance expert
minute read
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Last Updated 10 MARCH 2022

Why might there be a dispute with my car insurance provider? 

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.

Fortunately, there’s a formal process to help if you need to dispute a claim.

What is the process to dispute a claim on your car insurance? 

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.

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. 

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.  

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.

What can invalidate my car insurance? 

There are a few reasons your car insurance claim might be declined, or your insurance provider agrees to pay less than expected. These include: 

  • 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 – with themselves as a second driver.
  • 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.

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.

Frequently asked questions

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.

What do I need to know about taking 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 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).

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