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Why your home insurance could be rejected

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26/03/2014
The recent floods have put insurance and insurance claims firmly on the agenda of many people across the UK.

While making a claim on home insurance is often a relatively straightforward process, for a number of reasons, it’s not uncommon for a claim to be rejected and the policy holder left empty handed.

In fact, research from the consumer champion Which? found that one in ten claims on home cover was either fully or partially rejected.

Understanding why some claims are disallowed could help consumers if they themselves have to make a claim. Below are three of the most common reasons home cover claims are rejected:

Wear and tear on a home

Nearly all home insurance policies stipulate that a property is kept in ‘good condition’ and ‘well maintained’. If it isn’t, and you make a claim for damage from a burst water pipe, for example, the insurer may find that the reason the problem arose was due to the policy holder’s negligence, rather than the pipe being affected by cold weather.

Insurers are not specific in policy clauses about what such terms as ‘good condition’ or ‘well maintained’ mean, mainly because there are too many variables. Although the permutations are vast, looking at a few examples can shed light on how insurers think about what well maintained might mean.

Claims are often rejected where:

• Poor roof upkeep, such as dislodged tiles and cracked chimneys, means the damage that occurred during a storm wouldn’t have happened otherwise.
• Water damage is caused by bathroom tiling which hasn’t been re-grouted sufficiently regularly.
• A boiler breaks down which hasn’t been annually serviced.
• Pipes burst which aren’t lagged and there has been no attempt to insulate a home.
• Trees are left to grow without being trimmed, which can cause damage to a property’s foundations or external structure.

Incorrect levels of cover

A home and its contents need to have the correct level of cover. Maximum claim limits that are below the value of your property and belongings could mean you lose out.

If, for example, your home burns to the ground and it’s going to cost £200,000 to re-build it, but you’ve only agreed maximum cover of £150,000, then you’re going to be £50,000 out of pocket.

Likewise, if your property is stripped of its contents by thieves while you’re away on holiday, but your total maximum claim limit for possessions is less than the total value of what’s been stolen, you’ll financially suffer.

Single item claim limits should also be taken into account. Jewellery, antiques, musical instruments and other unique or highly valuable items, such as bicycles and hi-tech gadgets, may all be worth more than your single item claim limit if you haven’t checked what it is. So if you break, lose or have a wedding ring stolen that’s worth £2,000, but your claim limit for one single item is just £1,500, you could lose out by £500.

Non-disclosure of material facts (i.e. Tell the truth!)

Many claims are rejected because the claimant hasn’t been truthful, either knowingly or unknowingly, when they applied for home insurance in the first place.

People might not want to disclose previous claims they’ve made with other insurers in an attempt to maintain a no claims discount, for example. If a claim is then made, and the insurer runs checks and finds out they’ve not been told about previous claims, they’ll more than likely cancel your insurance altogether, as well as reject the claim.

Similarly, if you have had a County Court Judgement (CCJ) made against you, you also have to declare it; CCJs are usually issued after someone has been unable to pay back debt. Whatever the reason for the CCJ, non-declaration could come back to haunt you as the information is readily available via public records.

There are other, more ‘honest’ mistakes people make which lead to claims being rejected: you might not have checked that the locks on your home meet the insurer’s requirements, for example, or have said you have a house alarm but never switch it on, or live in a flood plain but didn’t realise it when you took your insurance out (you should always check online and with your local council!).

Adam Powell is head of operations at Policy Expert

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