One in five home insurance claims rejected
Written on 26 January 2016
One in five (21%) of people who claim on their home insurance policy are turned down, according to figures out today from the Association of British Insurers (ABI).
Home insurance policies include buildings insurance which covers the cost of repairing or rebuilding your property if it’s damaged and contents insurance which pays out if your belongings are damaged or stolen.
The figures, which are based on claims in 2013 and 2104, suggest some people are confused about what their policies cover in the first place. The main reasons people have their claims rejected include:-
- the claim value being below the policy excess. The excess is the amount you have to pay towards the cost of a claim.
- not having bought the right cover, such as accidental cover. There are a number of add-ons you can buy with home insurance which can be useful. For example, accidental cover pays out if you accidentally damage your property or belongings. But this extra does add to the cost of the insurance.
- claims being made for damage which isn’t covered by home insurance, such as wear and tear or damage caused by lack of maintenance.
For the four out of five customers who made successful claims the average pay-out was £2,520.
Car and travel insurance claims
In contrast, almost all car insurance claims are successful. Insurers paid out 99% of all claims in 2013 and 2014 with an average pay-out of £2,160.
And nine in ten (87%) of people claiming on their travel insurance got a pay-out. Claims were rejected for a variety of reasons including a failure to declare a pre-existing medical condition and lack of proof that items being claimed for were lost.
This is the first time the ABI has published pay-out rates for home, travel and car insurance claims. It analysed 6.9 million claims from 19 insurers made in 2013 and 2014. This included 4.3 million motor, 1.8 million home and 800,000 travel insurance claims.
Huw Evans, ABI’s director general, says that contrary to popular belief, insurers want to pay honest claims.
“It helps nobody when customers have bought the wrong product or not disclosed important information. So we will use the analysis we are publishing today to drive awareness campaigns to improve even further the acceptance rates for home and travel.
“Buying insurance should never just be about getting the cheapest price in the quickest time possible, it should be about ensuring you have the right product for your hour of need.”
Find out more
Before you buy or renew your insurance policy, take a look at our guide on home insurance.