Home insurance: When can you claim and why might you be refused?

(12/02/16) Got a home insurance claim to make? We find out why you might be less likely to be covered than you think. And why you’re 21 times less likely to lose out with car insurance claims

Figures revealed by the Association of British Insurers (ABI) show that you’re far more likely to get a home insurance claim turned down than you are a car insurance claim.

Numbers for claims in 2013 and 2014 reveal that 21 per cent of home insurance policy claimants are refused, against just 1 per cent of motor insurance claimants.

However, average payouts are higher for home insurance – at £2,520 – rather than the £2,160 car insurance claims received on average.

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But what happens if you’re one of the unlucky 21 per cent? And how can you avoid being refused a payout?

The key reason for home insurance claims being refused is down to the policy holders not keeping the property in a good enough condition. And here the onus is very much on you as the policyholder to keep up the maintenance on your property.

Other reasons included not having purchased optional accidental damage cover, or the claim being to small for the cover.

Top tips for getting a payout when you have to make a claim

Check your policy small print very carefully some items such as stereos and windows can be covered in your standard contents insurance. Other electrical equipment (e.g. laptops) is often not included in accidental damage cover. You can extend cover to include these items, which can be useful if you have young children – but be aware that you have to pay extra for this cover and any no claims bonus that you have accrued will be lost in the event of a claim. Other damage such as that caused by pets chewing your sofa will not be covered.

Keep a record and photographic evidenceThis evidence can be used for your insurance claim. You should contact your insurer to find out why the items are excluded from your cover as you have the right to appeal. You should retain a copy of the letter, and send all correspondence by recorded mail. Details of how to make a formal appeal will be found on your policy documents, or on your insurer’s website.

If your insurer’s formal appeal procedure does not yield fruit and your insurer is a member of Lloyds then you can make a complaint via the Policyholder and Market Assistance Department (of Lloyds). Otherwise, a last resort is to contact the ombudsman, which will act as a mediator in your case.

Going to the Financial Ombudsman

You can take a disputed claim to the Financial Ombudsman Service eight weeks after first raising the issue with your insurer – or when you receive a deadlock letter (formal notification from your insurer that they cannot resolve your issue).

The complaints that do go to the ombudsman for home insurance have an uphold rate of 33 per cent for contents insurance and 38 per cent for buildings insurance.

Common reasons you might take your home or contents insurance case to the ombudsman:

• Insurers rejecting claims as they consider the damage to be wear-and-tear;
• Delays in the time it has taken to repair the property
• Cases where the property was considered ‘unoccupied’ when damage has occurred
• Disputes over loss-adjuster valuations
• Disputes over whether the damage was to the ‘fabric of the house’. (The general rule of thumb is whether the item can be removed relatively easily and taken away such as laminate floors.)

Common reasons you might take your case to the ombudsman for car or motorbike insurance:

• Administrative issues: These include customer services, delays, renewals and payment issues
• Advice/sale: This could involve misrepresentation, non-disclosure problems, poor explanation of terms of service, suitability for a particular product
• Claims: delays, forgery/fraud, policy terms, repairs etc.