If you or your business have for whatever reason being declined or refused an insurance pay out, then there are grounds to certainly challenge this and make sure that your case is heard sympathetically and appropriately. There are many forms of insurance ranging from Business insurance that can cover business interruption such as we have seen with the Covid-19 lockdown. It can also apply to life cover through to house and pet insurance all of which you take out in good faith that in the event of any claim you will receive monies to at least put you back into the situation to which you will believed you were insured.
Has the Coronavirus Affected Business Interruption Insurance claims?
The FCA (Financial Conduct Authority) has taken the insurance industry to court regarding claims being declined if they were made using the lockdown as reason for claim. Business interruption insurance has been the main target, where many insurers and policy underwriters choosing to decline claims on grounds that the business policy did not cover this unforeseen event.
The main angle for challenging these decisions to decline claims of this nature is that insurance cover is rightly in place with it being a requirement in most situations to cover unforeseen events. If a claim isn’t paid out what is the point of insurance in the first place!
How can a Business Interruption Insurance claim be refused?
Insurers can decline a claim for a number of reasons all of which could be valid but all of which could in fact be challenged. A valid reason to decline a claim is there may well be incorrect or misleading information provided making the claim invalid. However, many of the reasons why claims are declined is due to the insurer relying on technicalities or wording that you may not have been aware of when taking out the policy.
As an example in the event of whole life cover not paying out this could be as a result of a medical condition that is not quite serious enough to warrant the policy paying out. A client of ours had cancer but the insurers said it wasn’t serious enough, we argued and ultimately won saying it was.
What you must always be mindful of is many insurance claims that are declined are as a result of the firm finding an excuse not to pay out and relying on their terms and conditions in not doing so. This in effect may be incorrect and any insurance policies which are declined should at least be challenged.
What type of Insurance claim can be declined?
There are a whole array of insurance products that can be declined in relation to pay-outs and below is listed a few of the more common types of policy.
We are seeing growing numbers of businesses with the Coronavirus pandemic locking down the economy having insurance claims declined. Where claims have been submitted to cover loss of business or damage to the business trading through business interruption insurance, these are then being declined.
This approach to decline claims goes against the ethics on the insurance product where we are challenging decisions on behalf of clients.
Life cover tends to be attached to an individual where upon death the amount of protection is paid to either the spouse, next of kin or in the event of business insurance either the business itself or the fellow business owner.
Whole life cover
Rather than an insurance policy paying out in the event death a whole life policy or living cover, covers an individual when they suffer a major potentially life-threatening condition such as heart disease or cancer.
Your household insurance normally is split into two that being the house insurance or bricks and mortar insurance and is a policy that protects the building and the replacement of the building but not the contents. Sometimes policies can include both. This is not necessarily a bad idea as a number of items that are marked as contents many people believe a part of the bricks and mortar such as carpets. Kitchens and bathrooms can in fact overlap and we find clients have not been fully appraised at the outset of taking the policy as to where these fixtures and fittings lie in terms of cover.
House Contents Insurance
House contents insurance includes anything from carpets through to beds and clothing where the main fault lies with any insurance normally being undervalued and the insurer only paying a proportion of the undervalued amount and not the insured amount.
Travel insurance should include not only the loss in relation to costs of a holiday should the holiday itself be problematic but more importantly covering the medical episodes and repatriating individuals and taking care of their loved ones should the need arise, if an illness strikes whilst they are abroad.
Car insurance very much like travel insurance not only should cover the cost of the vehicle and damage that has been also cover an individual’s loss due to injury sustained in an accident.
This is a relatively new form of insurance but one that can protect potentially high costs in relation to medical requirements suffered by families pets.
What can I do to help prevent a claim from being rejected?
There are a number of steps that you can take if any form of insurance is declined
- at the outset make sure that you check the policy thoroughly and that what you are applying for is indeed what is covered.
- If any changes are or have taken place whilst the policy is running then it is important to bring insurers up to speed. For instance in relation to house insurance if you have purchased a particularly expensive item you wish to include in a policy.
- If the claim is required make sure you follow the companies claims procedure and if difficulties arise from this report them to the insurance company.
- If the insurance company does decline a claim or reduce the claim amount to which you are claiming that do not be afraid to challenge this is the insurer throughout the process of sale and the policy and potential claim has a duty to be clear about what requirements are needed.
- If the insurer does decline the claim then you can challenge this ultimately by escalating through the Financial Ombudsman.
What do I do if an insurance claim has been declined?
1 The Insurance application was incorrect. Inaccurate information although unintentional can be picked up by insurers as a reason not to pay. Pre-existing conditions are the normally cop out for paying when it comes to life cover. Regardless the insurance or selling agent should be clear when sold and the policy unambiguous so any reason for declining because of this should be challenged.
2 A claim falls into the wrong category. When an insurer looks at reasons for not paying such as in a home insurance claim for a laptop for work or a car insurance crash claim for something like air conditioning as damaged in the accident which they try to argue is for wear and tear.
3 A claim doesn’t meet the policy criteria. There are stipulations of what an insurer believes to be the requirement to pay out and yours. Like whole life protection where you don’t have a serious enough level of cancer or house insurance where there is you believe storm damage but the insurer argues it wasn’t a storm as the wind speed wasn’t at the right level.
4 The insured element hasn’t been kept in a safe fashion. Have you looked after it as a duty of care to prevent damage? Nice and ambiguous so insurers like to use this and get you to prove them wrong.
5 The claims process hasn’t been followed. Bureaucratic madness, it’s not that you are not insured the argument to not paying is you didn’t follow the procedure when making the claim, as if that’s high on anyone’s list when they have suffered a loss meaning they have to make a claim.
We can help
If you have suffered a loss when making any form of insurance claim, we can certainly help on a no win no fee basis if you chose not to complain yourselves. Martin Knipe has been dealing with client’s financial disputes, concerns and difficulties for over 20 years and can provide this background in helping get back what is rightfully yours.