How to Challenge an Insurance Claim Rejection in the UK
Insurance companies reject claims for three reasons: because the claim is genuinely excluded, because they made a mistake, or because they're hoping you won't push back. The second and third reasons account for a significant share of all initial rejections.
The Financial Ombudsman Service upholds roughly 1 in 3 insurance complaints in the consumer's favour — meaning a third of people who were told "no" were told wrong. The FOS is free to use, legally binding on the insurer, and requires no solicitor or claims company. The only thing standing between you and a successful challenge is knowing the process.
This guide covers every stage: why insurers reject claims, your rights under the Insurance Act 2015 and FCA ICOBS, how to write a formal complaint that references the right legislation, and how to escalate to the FOS if the insurer won't back down.
Key facts
- —Legal basis: Insurance Act 2015, FCA ICOBS rules, Consumer Rights Act 2015
- —FOS insurance complaint window: 6 months from the insurer's final response letter
- —FOS success rate: ~33% of insurance complaints upheld in consumers' favour
- —Insurer response time: Must respond within 8 weeks (FCA rules)
- —Routes: Internal complaint → Financial Ombudsman Service → County Court (for large claims)
Why insurers reject claims
Understanding the category of rejection is the first step — because the legislation you cite in your challenge depends on which type of rejection you are dealing with.
Non-disclosure and misrepresentation
The most common basis for rejection. The insurer claims you didn't tell them something material when you took out the policy — a previous claim, a medical condition, modifications to a vehicle, or a relevant criminal conviction. This is where the Insurance Act 2015 matters most (see below). Before the Act, insurers could void a policy entirely for any non-disclosure, including innocent omissions. That changed in August 2016.
Policy exclusion applied
The insurer says the specific loss you are claiming for is excluded under the policy wording. Common examples: 'gradual deterioration' exclusions in home insurance, 'pre-existing condition' exclusions in health or travel insurance, or 'wear and tear' clauses in contents policies. Always read the exact wording — exclusions must be clearly worded and must have been drawn to your attention at the point of sale.
Alleged fraud or exaggeration
The insurer believes you have overstated the value of a claim or fabricated the event. A fraud allegation is serious and requires specific evidence. If you believe the allegation is incorrect, challenge it in writing, asking for the specific evidence they are relying on. Insurers have a high threshold to meet to sustain a fraud allegation.
Procedural breach
You notified the claim late, failed to take steps to minimise the loss, or didn't provide evidence they requested. Under ICOBS, procedural requirements must be proportionate — an insurer cannot reject a claim for a minor procedural failure where it did not affect the outcome or cause them prejudice.
Administrative error
Less common but it happens: the insurer processed the policy incorrectly, applied the wrong endorsement, or misread your application. These cases are relatively straightforward to challenge — request a copy of your original application and policy schedule and compare them.
The Insurance Act 2015 — a fundamental shift in non-disclosure law
Before the Insurance Act 2015 came into force for new policies on 12 August 2016, the law on consumer non-disclosure came from the Marine Insurance Act 1906 — a statute that allowed insurers to void a policy entirely for any misrepresentation, even an innocent one. Insurers used this routinely as a reason to decline claims.
The Insurance Act 2015 replaced that with a proportionality principle:
Innocent non-disclosure
If you didn't know the information was relevant, or made an honest mistake, the insurer must pay the claim as if the misrepresentation hadn't occurred. They cannot void the policy.
Careless non-disclosure
If you were careless (you should have known), the remedy is proportionate to what the insurer would have done had they known the truth — e.g. if they would have charged 20% more premium, they can reduce the claim payment by 20%; if they would have excluded a specific risk, they can decline only that part of the claim.
Deliberate or reckless misrepresentation
Only where misrepresentation was deliberate or reckless can the insurer void the policy entirely and refuse all claims. The burden is on the insurer to establish this.
Note: The Insurance Act 2015 applies to policies entered into on or after 12 August 2016. Older policies are still governed by the old rules — though the FOS can still look at fairness even for pre-2016 policies.
Your rights under FCA ICOBS
The FCA's Insurance: Conduct of Business Sourcebook (ICOBS) sets out the minimum standards insurers must meet when handling your claim. These rules are legally binding on every FCA-regulated insurer — and breaching them is grounds for an FOS complaint.
ICOBS 8.1 — Claims must be handled promptly and fairly
Insurers must handle claims promptly and fairly. 'Fairly' means not rejecting claims on grounds that are unreasonable, disproportionate, or not supported by the policy wording. This is a broad obligation that the FOS applies actively.
ICOBS 8.1.1R — No unreasonable rejection
The key rule: insurers must not unreasonably reject a claim, including by avoiding a contract of insurance. 'Avoiding' a contract — treating it as if it never existed — is a drastic remedy and ICOBS explicitly includes it within the prohibition on unreasonable rejection. If the insurer has avoided your policy for a minor or innocent non-disclosure post-August 2016, this rule is directly in point.
8-week response requirement
FCA rules require insurers to send a final response to a formal complaint within 8 weeks. If they do not, you can take the complaint to the FOS immediately, without waiting. The 8-week clock runs from the date you submit your formal complaint — not from the date of the original rejection.
FOS signposting
Insurers are required to tell you about the Financial Ombudsman Service in their final response letter. If they do not, that itself is a breach of ICOBS rules — and you should complain about the omission when you refer to the FOS.
Information not asked for
Insurers cannot reject a claim based on information they did not ask for at the point of application, or information that was not material to the specific loss being claimed. If the fact they are relying on was never requested, or has no bearing on the loss, this rule applies.
Step-by-step: how to challenge a rejected insurance claim
The process has two stages. The first is internal — writing a formal complaint to the insurer. The second is external — the Financial Ombudsman Service. Both must be followed in order; the FOS will not accept a complaint until you have completed the internal stage (or the insurer has failed to respond within 8 weeks).
Get the rejection in writing
If the insurer rejected your claim verbally or without a clear written explanation, write to them immediately asking for the specific policy clause or reason in writing. You cannot effectively challenge a rejection you do not understand. The insurer must be able to point to the exact exclusion, clause, or alleged misrepresentation they are relying on.
Re-read your policy document
Once you have the written reason, find the exact wording in your policy. Check whether the exclusion has been correctly applied, whether the policy wording is ambiguous (ambiguity is typically construed in the policyholder's favour under the contra proferentem rule), and whether the exclusion was clearly drawn to your attention when you bought the policy.
Write a formal complaint
Write to the insurer within 6 months of the rejection. Mark your letter clearly as a 'Formal Complaint'. Reference the specific ICOBS rule or Insurance Act 2015 provision you believe they have breached. State clearly what you want: the claim paid, or a clear written explanation if the exclusion is genuine. Keep your letter factual and focused on the specific reason for the rejection.
Wait for the final response (up to 8 weeks)
The insurer has 8 weeks to send a final response. They may uphold your complaint (and pay the claim), partially uphold it, or maintain their rejection. They may also send a 'deadlock' letter stating they will not change their position before 8 weeks. Either the final response or a deadlock letter triggers your right to go to the FOS.
Escalate to the Financial Ombudsman Service
The FOS is free, requires no legal representation, and is binding on the insurer (though you are free to reject a decision you are unhappy with and pursue the courts instead). The FOS looks at both legal compliance and fairness — it can require an insurer to pay a claim even if the insurer was technically within its rights, if the outcome was unfair. Refer your case to the FOS within 6 months of receiving the insurer's final response.
County Court — for large claims or pure legal disputes
For large claims where the FOS hasn't resolved it, or where you want to litigate a specific point of law, County Court is the final route. Court proceedings can run alongside FOS involvement in some circumstances — but FOS is almost always faster and cheaper. Consider court only where the claim value justifies it or where you have a clear legal argument the FOS process may not fully address.
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What not to do
Don't accept 'that's our decision' as final
An insurer's initial rejection — or even their response to a phone call — is not a 'final response' in the regulatory sense. A final response is a specific written document that explicitly tells you the insurer has considered your complaint and will not change their position. Until you have that, you have not exhausted the internal process, and you have not triggered the FOS 6-month clock.
Don't sign any settlement or acceptance form
If you are unhappy with the outcome, do not sign any document the insurer sends that purports to accept their decision or settle the dispute. Signing may waive your right to escalate. If you are unsure what you are signing, ask in writing what the document means before you return it.
Don't use claims management companies
Claims management companies (CMCs) take 20–30% of any award you receive for insurance complaints. The Financial Ombudsman Service is entirely free for consumers. CMCs provide no additional access, no legal advantage, and no information or service you cannot obtain yourself at no cost. They take a large cut of money you are legally owed.
Don't threaten litigation before trying the FOS
Going straight to court is expensive, slow, and largely unnecessary for most insurance disputes. Insurers are experienced at defending litigation and know that most policyholders will not follow through. The FOS is faster, free, and — critically — looks at fairness as well as strict legal rights. Try the FOS first.
Don't miss the 6-month FOS deadline
Once the insurer sends a final response or deadlock letter, you have exactly 6 months to refer the complaint to the FOS. The FOS has very limited discretion to accept late referrals. Missing this deadline almost always means losing your right to FOS adjudication. Act on a final response letter the moment you receive it — even if you are still gathering evidence.
Types of insurance this applies to
The Insurance Act 2015, ICOBS rules, and the FOS complaints process apply to all personal lines insurance regulated by the FCA. That covers:
Home insurance (buildings and contents)
The most common category of FOS insurance complaint. Common disputes include rejection for alleged non-disclosure of previous claims, application of 'gradual deterioration' or 'wear and tear' exclusions, disputes over claim valuations, and rejection for failure to maintain the property.
Motor insurance
Rejection for alleged non-disclosure (modifications, previous convictions, medical conditions), disputes over fault decisions in accidents, total loss valuations, and 'fronting' allegations (where the insurer claims you are not the main driver of the vehicle).
Travel insurance
For travel insurance, the Consumer Insurance (Disclosure and Representations) Act 2012 applies alongside ICOBS. This Act explicitly requires consumers to take reasonable care not to make a misrepresentation — replacing the old duty of disclosure. Common disputes: pre-existing medical condition rejections, 'disinclination to travel' rejections, and claims for cancelled holidays.
Life and income protection
Within the FCA's remit. Rejection often involves alleged non-disclosure of medical conditions at point of application. The Insurance Act 2015 proportionality rules apply fully — an insurer cannot void a life policy entirely for an innocent non-disclosure.
Pet insurance
Rejection on grounds of pre-existing conditions is common, but the insurer must show that the condition existed before the policy was taken out. Exclusions for 'hereditary conditions' must be clearly stated in the policy wording.
Health and private medical insurance
Pre-existing condition exclusions are the most common basis for rejection. Moratorium policies (which automatically exclude conditions in a defined period before cover started) must be applied correctly. Continuation of treatment disputes are also within the FOS remit.
Scotland, Wales, and Northern Ireland
FCA ICOBS and the Insurance Act 2015 apply UK-wide. The Financial Ombudsman Service is available to consumers in all four nations on identical terms.
Scotland
The Insurance Act 2015 and ICOBS apply in full. For court proceedings, the County Court equivalent in Scotland is the Sheriff Court. Simple Procedure handles claims up to £5,000; ordinary procedure applies above that threshold. Court terminology differs from England and Wales, but the FOS complaints process is identical regardless of where in the UK you are based.
Wales
Welsh consumers have identical rights under the Insurance Act 2015 and ICOBS. The county court system applies for any litigation. The FOS is available on the same terms as in England.
Northern Ireland
The Insurance Act 2015 and FCA rules apply in full. Court proceedings in Northern Ireland are governed by the County Court (Northern Ireland) Order 1980. FOS jurisdiction is the same — Northern Ireland consumers can refer insurance complaints to the Financial Ombudsman Service on identical terms.
Legislation that applies to insurance claim disputes
- —Insurance Act 2015: Replaced the old Marine Insurance Act 1906 non-disclosure rules for policies from August 2016. Introduces proportionate remedies — innocent non-disclosure cannot lead to policy avoidance. Establishes the fair presentation of risk duty for consumers.
- —Consumer Insurance (Disclosure and Representations) Act 2012: Applies to consumer insurance contracts (as opposed to commercial). Replaced the duty of disclosure with a duty to take reasonable care not to make a misrepresentation. Relevant especially for travel, home, and motor insurance complaints.
- —FCA ICOBS (Insurance: Conduct of Business Sourcebook): The FCA rulebook governing how insurers must handle claims, communicate with customers, and respond to complaints. ICOBS 8.1.1R — the prohibition on unreasonable rejection — is the most frequently cited rule in insurance complaints.
- —Consumer Rights Act 2015: Applies to insurance as a service contract. Policy terms must be fair, transparent, and not create a significant imbalance to the consumer's detriment. Exclusion clauses that were not clearly drawn to the consumer's attention at point of sale may be unenforceable.
- —Limitation Act 1980: Sets the 6-year limitation period for bringing a County Court claim from the date the insurance claim was rejected. Note: the 6-month FOS window is separate and runs from the insurer's final response letter.
For guidance on other financial disputes, see our guide on vehicle finance disputes and how the Financial Ombudsman Service applies to them.
The FOS upholding 1 in 3 insurance complaints is not a coincidence — it reflects the fact that insurers regularly apply exclusions too broadly, void policies for misrepresentations the Insurance Act 2015 no longer permits, and rely on policyholders accepting "no" without pushing back. A formal complaint letter citing ICOBS 8.1.1R and the Insurance Act 2015 proportionality rules changes the calculation for an insurer immediately — it signals that you know the rules, you know the escalation route, and you are not going away.
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Write my letter now →Frequently asked questions
Can I challenge an insurance claim rejection?
Yes. You have the right to challenge any insurance claim rejection through the insurer's internal complaints process, and then to escalate to the Financial Ombudsman Service (FOS) if you are not satisfied. The FOS is free to use, legally binding on the insurer, and upholds roughly 1 in 3 insurance complaints in the consumer's favour. You do not need a solicitor or claims management company. The insurer must respond to your formal complaint within 8 weeks under FCA rules.
How long does an insurance complaint take?
Under FCA rules, the insurer must issue a final response within 8 weeks of receiving your complaint. If they do not respond within 8 weeks, or if you receive a final response you are unhappy with, you can refer the complaint to the Financial Ombudsman Service immediately. The FOS typically resolves insurance complaints within 3 to 6 months, though complex cases can take longer. You have 6 months from the insurer's final response to refer to the FOS.
What does the Financial Ombudsman Service do for insurance complaints?
The Financial Ombudsman Service is a free, independent body that resolves disputes between consumers and financial firms including insurers. For insurance complaints, the FOS can look at whether the rejection was legally correct and whether it was fair — even if technically within the policy wording. It can require the insurer to pay the claim, award compensation for distress and inconvenience, and issue rulings that are binding on the insurer (though you are free to reject an FOS decision and pursue court action instead). It is not the same as a court — it is faster, cheaper, and more accessible.
What is the Insurance Act 2015?
The Insurance Act 2015 reformed the law on fair presentation of risk and misrepresentation in insurance contracts. For policies issued on or after 12 August 2016, it replaced the old Marine Insurance Act 1906 rules that allowed insurers to void a policy entirely for any non-disclosure, however innocent. Under the Insurance Act 2015, the remedy for misrepresentation must now be proportionate to what the insurer would have done had they known the true position. If you made an innocent non-disclosure you didn't know was relevant, the insurer must pay the claim as if the misrepresentation hadn't occurred. Only deliberate or reckless misrepresentation allows the insurer to void the policy entirely.
Does it cost anything to complain to the FOS about an insurance claim?
No. The Financial Ombudsman Service is completely free for consumers to use. You do not need a solicitor, a claims management company, or any legal representation. A claims management company (CMC) would typically take 20–30% of any award you receive — for a process you can do entirely yourself at no cost. The FOS provides case submission guidance on its website, and Fight My Corner can generate your formal complaint letter within 5 minutes.
Fight My Corner provides dispute letter generation tools and guidance — not legal advice. For complex cases involving significant sums, or if court proceedings have already started, consider seeking advice from an insurance solicitor or your local Citizens Advice bureau.