Home insurance: When can you claim and why might you be refused?

Figures revealed by the Association of British Insurers (ABI) show that you’re far more likely to get a home insurance claim turned down than you are a car insurance claim.

Numbers for claims in 2013 and 2014 reveal that 21% of home insurance policy claimants are refused, against just 1% of motor insurance claimants.

What happens if you’re one of the unlucky 21%? And how can you avoid being refused a payout?

Why would your insurance claim be refused?

There are many reasons that a home insurance claim may be refused. From the policy holder not keeping their home in good enough condition to not fully understanding what they can and cannot claim for.

Here the onus is very much on you as the policyholder to keep up the maintenance on your home, a record of the condition of your property, and to have a full handle on the fine print of your policy.

Some reasons for having an insurance claim refused include:

Not having purchased optional accidental damage cover
The policy was not in effect when the claim occurred
The policy is invalid because the policyholder did not disclose material information when applying for insurance
The policyholder deliberately or carelessly withheld information or misled the insurer
The item being claimed for is not covered by the policy
The policy contains an exclusion clause that prevents the claim
The policyholder missed premium installments
The policyholder did not notify the insurer of a change in circumstances
The claim is too small for the cover
The policyholder did not follow the claims process correctly

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Top tips for getting a payout when you have to make a claim

Check your policy small print very carefully

Make sure that you are informed about the terms of your policy agreement. Some items such as stereos and windows may well be covered in your standard contents insurance. Other electrical equipment like laptops are often not included in accidental damage cover. You can extend cover to include these items – but be aware that you have to pay extra for this cover and any no claims bonus that you have accrued will be lost in the event of a claim.

Keep a record and photographic evidence

Having strong evidence is essential for your insurance claim – as well as receipts to prove the value of items or costs incurred, providing a clear record of the condition of your home and its contents is vital.

Ask questions and appeal

If your claim is denied, you should contact your insurer to find out why the items are excluded from your cover as you have the right to appeal. You should retain a copy of the letter, and send all correspondence by recorded mail. Details of how to make a formal appeal will be found on your policy documents, or on your insurer’s website.

Going to the Financial Ombudsman

If your insurer’s formal appeal procedure does not yield fruit and your insurer is a member of Lloyds then you can make a complaint via the Policyholder and Market Assistance Department (of Lloyds). Otherwise, a last resort is to contact the Financial Ombudsman, which will act as a mediator in your case.

You can take a disputed claim to the FOS eight weeks after first raising the issue with your insurer – or when you receive a deadlock letter (formal notification from your insurer that they cannot resolve your issue).

The complaints that do go to the FOS for home insurance have an uphold rate of 33% for contents insurance and 38% for buildings insurance.

Common reasons you might take your home or contents insurance case to the FOS:

Insurers rejecting claims as they consider the damage to be wear-and-tear
Delays in the time it has taken to repair the property
Cases where the property was considered ‘unoccupied’ when damage has occurred
Disputes over loss-adjuster valuations
Disputes over whether the damage was to the ‘fabric of the house’. (The general rule of thumb is whether the item can be removed relatively easily and taken away such as laminate floors.)

If you have any thoughts on this topic, or any other consumer issues you would like us to cover, feel free to get in touch with us at support@resolver.co.uk.