Common Reasons for Rejection of Insurance Claims

Common Reasons for Rejection of Insurance Claims

Anyone who has had an insurance claim rejected knows what a double whammy it is. Not only have you suffered injuries or property damage, but you are also in financial trouble, thanks to the rejected claim. There are many reasons why insurers reject claims, but these are the most common.


Many claims are rejected because of a claimant’s non-disclosure, partial disclosure or wrongful disclosure of facts pertinent to the insurance cover. This can be information relating to age, occupation, income, other insurance policies or pre-existing medical conditions. If you give false or inaccurate information in your policy, you could not only have your claim rejected, but also face further legal repercussions, so honesty and accuracy are vital when applying for insurance.


A common reason many claims are rejected is because the claimant is not covered for a particular situation, due to an exclusion clause in their policy. The claimant was not aware of this clause either because they did not read the policy thoroughly or because it was not explained by the agent who sold them the insurance. Most insurance policies have a cooling-off period, so it is vital to take the time to read your policy completely as soon after taking it out as possible (ideally before). Read the fine print and make special note of any exclusions, so that you are aware of exactly what you are covered for.


Failing to fill out an application form completely can be another cause for rejection of a claim. Sometimes a claimant may not have the necessary information on hand, cannot remember certain facts, or leaves certain sections to be filled out at a later date by a third party. Ignorance is no excuse under the law and many claims are rejected because pertinent information was not included at the time of application. This is another reason why all documentation should be read thoroughly, including the application form.


Health insurance and motor vehicle insurance are two areas where many claims are rejected or only partially paid out, due to the insurer disagreeing with the amount being claimed. In health insurance, a private hospital may include procedures and treatments the insurer deems  ‘unnecessary’ and refuses to pay for, leaving the claimant to cover the gap.

In motor vehicle insurance claims, a claimant may attempt to have previous damage or incidental work carried out by the repairer included in the claim, which the insurer again (rightly) refuses to pay for.

Other possible reasons for having a claim rejected include:

  • Where the insurer considers the claimant to be ‘at fault’, such as leaving the keys in the ignition before having their car stolen.
  • Where the claimant lacks the information to support their claim; e.g., losing receipts related to repairs or medical treatments.

The best way to ensure you don’t have a claim rejected is to read your policy thoroughly, fill out your application accurately and honestly, keep detailed records of everything and only claim for those things you know you are covered for. However, if you have had a claim rejected or only partially paid and don’t consider you were at fault, you would be well advised to contact a compensation lawyer to explore your options further. There are a number of excellent no win no fee lawyers who can help you pursue such matters in the courts.

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