The latest figures published by the insurance industry show that nearly 43,000 motor insurance claims are turned down every year.
Every day, insurers pay out just under £22million for private car insurance claims, which averages out at £2,952 per claim. While most claims submitted are settled by insurers, around 2% are rejected.
Common reasons for claims being turned down include policyholders failing to provide the correct information when arranging cover or where they breach the terms of their insurance.
Matt Oliver, from GoCompare Car Insurance, explained: “Having your car stolen, vandalised, or being involved in an accident is stressful enough, without the added stress of having your claim challenged or rejected. While most motor claims are paid without any issues, tens of thousands of claims are rejected every year.
“Insurance is complex, but when applying for cover, it’s essential to be honest, and take the time to read through the policy details to make sure it covers everything you need and has excess levels you can afford. The information you give when applying for insurance is used to determine the cost of cover, so omitting information or bending the truth to get a cheaper deal could land you in trouble if you need to make a claim.
“If you have a claim rejected and think your insurer has treated you unfairly, you can refer your case to the Financial Ombudsman Service. The Ombudsman will investigate the matter and will decide what is fair and reasonable, based on the facts of the case.”
GoCompare Car Insurance’s top five tips for a successful motor insurance claim:
- Buy the right policy – focus on cover, not just price
Not having the right cover in place is a common reason why insurance claims are rejected, as is the claim value being below the policy excess (the amount you’ll have to contribute towards any claims made on your insurance).
So, whether you’re arranging a new policy or renewing your insurance – don’t just buy on price. To make sure you get the right insurance which covers all your needs, compare policy covers, limits and exclusions. For example, if you need to use your car to commute, make sure your policy covers journeys to and from work.
- Read the small print – take care not to invalidate your policy
Your policy document will contain the terms and conditions relating to the policy. It will outline what is and, just as importantly, what isn’t covered.
Your policy document will also outline any procedures you need to follow over the duration of the policy. Typically, these include the requirement to notify your insurer of any changes to your personal circumstances (e.g. change of address, change of job; whether you have received any motoring convictions) and that of your car (e.g. where it is kept, any modifications).
Examples of how a policy might be invalidated include modifying your vehicle from the manufacturer’s standard specifications – in addition to changing the vehicle’s performance or look – this includes changes such as the addition of a tow bar; using your car for a purpose other than it was insured for (e.g. business use) or, exceeding your agreed annual mileage.
Failure to meet your insurer’s policy terms and conditions could invalidate your insurance and in the event of a claim – leave you picking-up the bill.
- Secure and maintain your car and your legal documents
Insurers expect drivers to take reasonable care to safeguard their cars to prevent accidents, theft, loss or damage. So, for example, insurers will decline a theft claim where the key has been left in the ignition or the driver is found to have been under the influence of alcohol or drugs. Drivers are also expected to keep their vehicle in a roadworthy condition.
By law, drivers are required to keep their car’s MOT, up-to-date, their vehicle should also be taxed. Without a current MOT certificate car insurance is invalid. Drivers caught driving a car without a current MOT face a fine and penalty points on their licence. And, if they are involved in an accident, they won’t be insured – leaving them to cover the cost of any damage to their vehicle. They will also find it harder and more expensive to buy insurance in the future.
- Act quickly and follow the procedures
If you need to make a claim, follow the procedure detailed in your policy document and report losses promptly. Your policy document will show your personal policy number and your insurer’s claims helpline number which you will need to call to register your claim and to discuss what to do next. Your insurer will help you navigate the process and resolve any claim from a third party on your behalf.
Being involved in an accident is extremely stressful and recalling details after the event can be difficult. So, collecting evidence to support your claim, such as dashcam footage or photographs can be helpful.
- Be honest
Don’t bend the truth when applying for a policy or when making a claim. Providing incorrect information or omitting important information on a proposal form could invalidate your insurance, while exaggerating the value of a claim or telling fibs could jeopardise a claim. If your insurer finds that you have been dishonest with any part of a claim, then they are entitled to decline the whole claim. This could leave you to foot the bill for any repairs or replacements yourself, and you may have difficulty in getting insurance in the future.