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Insurance Claims - 1 In 5 Claims Repudiated - Understanding Repudiation.

claims, Insurance Claims, Insurance Claims Handling, Loss Assessor

In the intricate realm of insurance policies and the claims they are designed to cover, there's an eyebrow-raising statistic that every policyholder should be privy to 1 in 5 insurance claims are repudiated, that is, rejected by the insurer.

Repudiation Definition. What is it?

Simply put, an insurance company can reject an insurance claim by deciding not to honour the claim, often citing various reasons. These could range from non-disclosure of pertinent information to breaches of policy conditions to alleged fraudulent activity. The process leading up to this point can be fraught with misunderstanding and contention, culminating in a scenario no policyholder wants to encounter.

A Closer Look at the Statistics - Repudiation.

The revelation that a startling 20% of insurance claims are denied may seem surprising, but these figures are not pulled from thin air. An annual report published by the UK's Financial Ombudsman Service in 2021 found that they upheld approximately 1 in 5 complaints about insurance claims being turned down. To shed some light on the magnitude of the situation, consider this: millions of insurance claims are filed in the UK each year across various sectors. A fifth of these claims being turned down indicates a considerable volume of denied claims.

Real-Life Example.

Consider the case of Jane (name changed for confidentiality), a proud homeowner in London. Jane had dutifully paid her home insurance premiums for several years. However, when an unexpected fire caused extensive damage to her home, she was shocked to discover her insurer had rejected her claim.

The insurance company argued that Jane had failed to disclose an essential piece of information when taking out her policy — a small, inconspicuous detail about the electrical wiring of her home. According to the insurer, this represented a material non-disclosure, a basis for Repudiation, meaning her claim was rejected. 

Jane disputed this decision, arguing that she had been unaware of the significance of the information and that she had answered all the insurer's questions to the best of her ability when purchasing the policy. Eventually, Jane's contacted us here at Oakleafe, and we took over managing her Claim. We challenged the Insurers and re-presented her Claim, resulting in her receiving the settlement she was entitled to.

Lessons to Learn with Jane's Claim being Repudiated.

Jane's experience underscores the importance of full disclosure when purchasing an insurance policy, but it also serves as a potent reminder of the considerable proportion of claims that insurers deny. The statistic — 1 in 5 insurance claims repudiated — should encourage policyholders to arm themselves with as much knowledge as possible about their insurance policies. Understanding the ins and outs of your policy can be a decisive factor in whether a claim is paid or repudiated.

What to do if your Claim is rejected.

If your insurance company decide to repudiate meaning your claim is rejected, it's essential first to understand why. Review the insurance policy's terms and conditions to ensure the claim is valid based on your coverage. If you believe the claim was wrongly denied, gather all relevant documents, including reports, repair estimates, or any other evidence supporting your claim. Contact your insurance provider for a detailed explanation of the denial and consider seeking advice from an insurance professional such as Oakleafe Claims. While the thought of having a claim rejected may seem daunting, knowledge and understanding of insurance terms and conditions can go a long way in ensuring the policy serves its purpose when needed. Given the present climate, insurers and policyholders need to work towards a transparent and fair insurance claim process to decrease the number of repudiated claims.

Remember, insurance is intended to serve as a safety net, a lifeline in our times of need. Let's ensure it remains that way. If you have been affected by repudiation, contact us, and one of our highly trained team will be in touch to talk about your current situation.

Top Reasons An Insurance Claim Is Rejected

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If you have been declined whilst trying to claim on your domestic or commercial insurance, we can help. We can also help with professional services, for example, Brokers, VAR Valuations and Managing Agents.