How to challenge a rejected car insurance claim
A declined car insurance claim is not the end of the road. Insurers turn down claims for all sorts of reasons, and plenty of those reasons do not hold up once you make them explain themselves in writing. Maybe they say you broke a policy condition, or that your modification was undeclared, or that the damage was wear and tear. Under FCA rules they have to handle your claim promptly and fairly and they cannot reject it for a reason that has nothing to do with your actual loss. If they get it wrong, the Financial Ombudsman Service can tell them to put it right, and that service costs you nothing.
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Build my claim →Your rights
Your insurer is regulated by the Financial Conduct Authority. The FCA's Insurance Conduct of Business Sourcebook (ICOBS 8.1) says a claim must be handled promptly and fairly and must not be rejected unreasonably. Under the FCA Consumer Duty, in force since July 2023, the insurer must act to deliver good outcomes for customers and avoid causing you foreseeable harm. If you took out the policy as a consumer, the Consumer Insurance (Disclosure and Representations) Act 2012 also limits when an insurer can refuse a claim over something you said when buying: an honest, reasonable mistake cannot be used to dodge the whole claim. Once you complain, the insurer must send a final response within 8 weeks. If you are unhappy with it, or 8 weeks pass with no answer, you can take the case to the Financial Ombudsman Service for free. You normally have 6 months from the date of the final response letter to do so.
Step by step
- 1Get the rejection in writing and pin down the exact reason. Ask the insurer to point to the specific policy term or condition they are relying on, and request a copy of any engineer's or investigator's report they used. You cannot challenge a reason you have not been shown.
- 2Send a formal written complaint to the insurer. State clearly that you believe the claim was rejected unfairly, reference ICOBS 8.1 and the Consumer Duty, attach your evidence (photos, receipts, the policy schedule, any repair quotes), and say what you want: the claim paid, or the decision reversed.
- 3Wait for their final response, but no longer than 8 weeks. If they reject your complaint, the letter should tell you that you can go to the Financial Ombudsman. If they go quiet, the 8 week deadline means you can escalate anyway.
- 4Refer the case to the Financial Ombudsman Service at financial-ombudsman.org.uk. It is free, you do it yourself, and if they rule in your favour the insurer must do what the ombudsman directs, which can include paying the claim plus interest. Do this within 6 months of the final response.
What they'll say, and your comeback
“You failed to disclose a modification or a previous claim, so the policy is void.”
Comeback, Under the Consumer Insurance (Disclosure and Representations) Act 2012 an insurer cannot simply void a consumer policy over an honest mistake. They have to show the misrepresentation was deliberate or reckless, or at least careless, and that they would have acted differently. Ask them to set out their basis in writing.
“The damage is wear and tear, or pre-existing, so it is not covered.”
Comeback, Ask for the engineer's report that says so and challenge it with your own evidence or an independent quote. If they cannot produce a clear technical basis, that is exactly the kind of unfair rejection the Ombudsman overturns.
“You broke a policy condition, for example the car was unattended or insecure.”
Comeback, ICOBS 8.1 says they cannot reject a consumer claim for breach of a condition or warranty unless the circumstances of the claim are connected to that breach. If a broken condition did not actually cause or contribute to your loss, point that out and cite ICOBS 8.1.
FAQ
Does complaining to the Ombudsman cost me anything?
No. The Financial Ombudsman Service is free for consumers. The business being complained about may pay a case fee, not you, and you keep all of any payout the Ombudsman awards.
How long does the whole process take?
The insurer has up to 8 weeks to give you a final response. The Ombudsman can take a few months on top, longer for complex cases, but straightforward ones are often resolved faster. You do not lose your right to go to court by using the Ombudsman first.
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A self-serve tool, not a law firm. General information, not legal advice.