Reasons for Denial of Insurance Claim

Insurance companies are required by law to act in extreme good faith when selling to you a policy and when dealing with a resultant claim. This means that the insurer or relevant broker should inform you of all the details included in the cover’s small print including what is expected of you and the repercussions of violating the policy’s terms. however, it is also important to note that insurance companies are still commercial entities that seek to increase their profits. As such, there are certain scenarios where they can deny your insurance claim. This article will highlight some of these underlying reasons.

Damage that hasn’t been caused by the disaster stipulated in the policy

With reference to property, people purchase insurance policies to protect valuable items from unforeseen events. However, the insurer is only obliged to compensate your loss if the damage results from the events stipulated in your policy’s small print. For instance, if you cover your home and its contents from flood, you may not be reimbursed if the properties show signs of damage that are unrelated to floods.


You are required to disclose all the relevant details when purchasing or renewing a policy. Failure to provide comprehensive or accurate information gives the insurer a leeway to reject your claim. An example of non-disclosure is failing to specify existing damage to the insured property when purchasing property insurance. It may also be disadvantageous to you if you failed to disclose relevant criminal offences such as arson or all the prior insurance claims.

You can disclose the necessary details by talking to the insurer about everything you know with reference to the policy in question. Another opportunity to disclose the information is when the insurer asks precise questions. However, you are not obliged to disclose something that is common knowledge, details that the insurer ought to know, or aspects that you don’t know about. You are also not required to disclose information that will lessen the insurance company’s risk.

Additionally, the insurer has the responsibility to inform you clearly about the effect and nature of your obligation to disclose relevant information. Failure to do so means that the company cannot reject your insurance claim on the basis of non-disclosure. If non-disclosure is cited as the reason for the denial of your insurance claim, enquire from the insurer about the details that you didn’t disclose. Depending on your stand, you can choose to let go of the claim or make your case before the company’s internal dispute resolution office. If you don’t get the necessary help, you can forward your grievances to the Financial Ombudsman Services (FOS).

Applicability of exclusion clauses and conditions stipulated in the policy

A typical insurance contract contains exclusion clauses and conditions. For instance, if you purchase a home owner’s insurance, one of the pre-stated conditions may be that you have to install locks on all of the windows as a basic measure to avoid theft. Failure to adhere to such conditions may result in the insurer denying your claim.

However, if you are of the opinion that failing to follow the set conditions did not contribute to the loss, you can make your case before the relevant internal or external body. For instance, if you failed to install locks on all windows but the thieves broke in through the door, you may have a valid case. Nonetheless, the result may be the insurer giving you a lesser compensation than expected. Your policy’s small print may also have a list of events that the policy will be inapplicable. Such exclusions include the usual wear and tear, flood, and damage resulting from flawed construction.

Policy cancellation

It is possible for the insurance company to cancel the policy during the period of the cover if you present additional details that heightens the insurance company’s risks to an impractical level. Moreover, if you fail to pay the policy premiums as agreed upon, you risk having your insurance cancelled.


If the insurer determines that you intentionally acted to deceive the company or made a reckless decision that resulted in the insurer being deceived, then your policy will be invalidated. In serious scenarios, this is considered to be a criminal offence and legal action will probably be taken against you. to avoid investigations of fraud, ensure that you cooperate with your insurer and that you provide all the requested details and evidence.

What to do When an Insurer Rejects Your Claim

If you believe that your insurance claim, it will be helpful to seek the services of an experienced attorney to assist you with the appeal process. The first step would be to write a formal letter to the insurer detailing the event and providing evidence to prove that you deserve to be compensated. The insurance company will respond by either reversing their initial decision or specifying their reasons for rejecting the claim. If the negotiation of a settlement is unsuccessful, your lawyer will assist you in filing a lawsuit against the firm.


While insurers act obliged to act in good faith when handling a claim, they are entitled to rejecting a claim if it violates the policy’s terms. for this reason, it is crucial to carefully read through the cover’s small print before purchasing it. If the insurer rejects your claim and you still feel that you should have been compensated, seek the services of an experienced attorney. The lawyer will help you with the appeal process either internally or through the court.