Skip to main content
Financial Services & Banking
GB

Insurance Claim Denied

When an insurer rejects or under-pays a claim, the Financial Ombudsman Service can look at the complaint and decide what is fair and reasonable. The service is free to the consumer, its decisions bind the firm where the consumer accepts them, and it can order the firm to pay compensation and put things right.

Last checked 2026-10-143 scenarios

What is this?

When an insurer rejects or under-pays a claim, the Financial Ombudsman Service can look at the complaint and decide what is fair and reasonable. The service is free to the consumer, its decisions bind the firm where the consumer accepts them, and it can order the firm to pay compensation and put things right.

Who can use it

Individuals, and small businesses, charities and trusts that fall within the service's eligibility tests — broadly businesses with fewer than ten employees and a turnover or balance sheet of no more than €2 million. Larger businesses may fall outside the ombudsman's compulsory jurisdiction and need a different route.

What problems it addresses

A valid claim rejected on a technicality; a policy wording read against the customer; a claim under-paid without explanation; delay and silence after months of chasing; a broker or adviser who described the cover as wider than it was; an insurer relying on an exclusion the customer was never properly told about.

When it is appropriate

You have already complained to the insurer, and either it has sent you a final response you disagree with, or eight weeks have passed without one. That eight-week point matters: it is what unlocks the ombudsman even if the insurer never gives you a final answer.

How the procedure begins

Send a formal written complaint to the insurer's complaints team, not a general customer-service address. Get a complaint reference and keep the acknowledgement. If the response is not satisfactory, or eight weeks pass, refer the complaint to the ombudsman online or by post.

What the decision-maker can do

The ombudsman can require the firm to put the customer back in the position they should have been in, order compensation for financial loss and for distress and inconvenience, and order interest. It can also consider how the firm's own complaints process handled the case. It cannot fine the firm, and it does not decide on commercial pricing decisions.

Remedies and outcomes available

The claim paid, or the shortfall paid, plus interest and compensation for distress and inconvenience where appropriate. Awards are subject to a limit set by the regulator — £455,000 for complaints referred on or after 1 April 2026 — so very large commercial losses may exceed what the ombudsman can award.

When to consider a different route

If your business is outside the eligibility tests, or the policy is a large commercial or specialty risk, the route is usually a negotiated settlement or commercial litigation under the policy's own dispute terms, sometimes arbitration. If a broker gave the wrong advice, that is a separate complaint against the broker, not the insurer — and if the broker has failed, professional indemnity and legal advice may be needed. You can also accept nothing and go to court instead; accepting the ombudsman's decision is what makes it binding on the firm.

Costs, fees and timeframes

The ombudsman service is free to the consumer. Insurers must respond to a complaint within eight weeks. Ombudsman case handling times vary with complexity, and can run from several weeks to several months; the service publishes its own performance data.

Step by step

  1. 1

    Complain to the insurer in writing

    Address it to the complaints team, say clearly that you are making a formal complaint, and ask for a written final response.

  2. 2

    Keep the timeline

    Note the date you complained. If a final response has not arrived within eight weeks, you can go to the ombudsman regardless.

  3. 3

    Assemble a factual bundle

    Set out the chronology, what the policy says, what the insurer relies on, and why you say it is wrong. Refer to specific policy clauses and documents.

  4. 4

    Refer to the ombudsman in time

    You have six months from the date of the final response to refer the complaint. Diary that date the moment the letter arrives.

  5. 5

    Use the whole remedy, not just the money

    Ask the ombudsman to consider the claim itself and any distress and inconvenience, and to order interest. Attach the schedule of what you lost.

Evidence and documents

The policy schedule and full policy wording, the claim form and everything you submitted, the insurer's decision letters or emails including the final response, the engineer or loss adjuster's report if there was one, receipts, photographs, and any recording of what you were told when you bought the policy.

  • • Policy schedule and complete policy wording
  • • Evidence of what you were told when buying (calls, emails, brochures)
  • • Your claim form and all supporting documents
  • • Loss adjuster or engineer reports
  • • The insurer's decision letters and final response
  • • Receipts, invoices, photographs and repair quotes
  • • Your complaint correspondence and reference numbers

Authoritative sources

Frequently asked questions

How long do I have to go to the ombudsman?+

Six months from the date on the insurer's final response. If the insurer never sends one, you can refer the complaint once eight weeks have passed since you complained.

Does using the ombudsman cost anything?+

No. The service is free to the consumer, and the firm pays for it. You do not need a lawyer and most complaints are handled on paper.

What is the maximum the ombudsman can award?+

There is a statutory award limit, which the regulator up-dates. It is £455,000 for complaints referred on or after 1 April 2026. If your loss exceeds the limit, take advice on the court route as well.

Can a small business use the ombudsman?+

Often yes. The service covers businesses that meet its size tests, broadly fewer than ten employees with turnover or a balance sheet of no more than €2 million. Larger businesses may fall outside its compulsory jurisdiction.

Do I have to accept the decision?+

No. If you accept it, it binds the firm. If you reject it, you keep the option of going to court — but you should take advice before doing so, because litigation carries cost and risk.

This is general information about the Financial Ombudsman Service in the United Kingdom, not legal advice. Award limits, eligibility thresholds and referral time limits are set by the regulator and change — verify the current position before relying on any figure.

The scenarios

Different circumstances, decisions and outcomes for the same service — from a clean-cut case to one where this route is not the right fit.

Scenario A
Straightforward case
United Kingdom (Financial Ombudsman Service)

A burst pipe, a £6,800 contents claim, and the words "gradual damage"

A typical case — fictional illustration

The situation

Marta came home from a night shift in Manchester to find water running down her kitchen wall. The joint on a fifteen-year-old pipe had split. Her plumber's invoice records a sudden failure of the fitting, and her phone has photographs of the split, the soaked kitchen units and the ruined flooring. She claimed £6,800 on her contents and home policy. Six weeks later the insurer refused, saying the loss resulted from 'gradual damage and wear and tear'. No loss adjuster ever visited. When Marta asked for the specific clause and for the basis of the finding, she was sent a standard letter that repeated the same sentence. That letter was headed 'final response'.

The problem they face

Marta has a house she cannot use properly, an unbudgeted repair bill, and a refusal built on a phrase rather than a finding. She has the plumber's evidence but no idea whether 'gradual damage' is a legitimate exclusion here or a convenient label.

Why this service may help

Complaints about a claim decision go to the Financial Ombudsman Service, which decides what is fair and reasonable on the evidence rather than simply deferring to the insurer's interpretation. Where an insurer relies on an exclusion, the ombudsman looks at how clear the wording is, whether the insurer investigated properly, and whether it treated the customer fairly. An insurer that refused a sudden pipe failure as 'gradual damage' without sending anyone to look at it has an evidential problem.

How the process works

Marta already has a final response, which is what unlocks the ombudsman. She refers the complaint, attaching the policy wording, the plumber's invoice, the photographs, the insurer's refusal and a short chronology. The ombudsman service asks the insurer for its file, considers both sides and issues a decision. If Marta accepts it, it binds the insurer; if not, she keeps the option of court.

Evidence and documents

The policy schedule and full wording including the exclusions, the plumber's invoice and report, dated photographs of the pipe and the damage, receipts or quotes for the damaged items and flooring, the claim form, and the insurer's refusal and final response letters.

Possible outcomes

A common outcome is that the ombudsman accepts the loss was sudden and orders the insurer to pay the claim, often with interest. It is also possible the ombudsman accepts that part of the damage was long-standing and splits the difference, or accepts the insurer's reading of the wording — in which case the refusal stands. What the ombudsman will not do is fine the insurer or decide the commercial price of the policy.

Costs and timescales

The ombudsman service is free to the consumer, and there is no need for a lawyer. Claim handling time varies with complexity and can run from a few weeks to several months; the service publishes its own performance data. Marta must refer the complaint within six months of the date on the final response letter.

Important limitations

The six-month deadline runs from the final response and is strict. The ombudsman decides on documents rather than on how strongly Marta feels about it, so the plumber's reasoned opinion matters far more than a frustrated email. If the ombudsman accepts the insurer's interpretation, that decision is not appealable to another ombudsman — court would be the only further route, with the costs and risks that carry.

Practical next steps

Marta should refer the complaint to the ombudsman now, listing specifically what she says the insurer got wrong: that the failure was sudden, that no inspection was carried out, and that the exclusion wording is not clear enough to cover this event. She should ask the plumber for a short written opinion on the cause, and claim interest as well as the sums lost.

Sources

Scenario B
More complex situation
United Kingdom (Financial Ombudsman Service)

The bakery flood claim — an ambiguous clause, a broker who said "you're covered for everything", and two firms blaming each other

A typical case — fictional illustration

The situation

Ben runs a bakery in Cardiff with nine staff and a turnover of £480,000. When the landlord's roof leaked in a storm, the shop shut for eleven days. His business interruption claim of £42,000 was refused because the policy covers 'flood' but the insurer says a roof leak is 'escape of water from a defective roof', which is excluded. Ben has an email from his broker from two years earlier saying 'you're covered for everything — don't worry about the small print'. The broker now says the insurer is relying on a technicality; the insurer says the broker should have explained the exclusion. Last month the broker went into administration and its phone line is dead. Ben has already spent £1,800 on a surveyor's report.

The problem they face

Ben is facing a five-figure loss with two potential defendants, an ambiguous clause, an oral assurance he can evidence only by email, and a broker that no longer exists. He also cannot tell whether he should be arguing about the wording, the advice, or both.

Why this service may help

The ombudsman can look at the insurer's decision, but it can only consider the firm complained about. That makes the strategy important: the complaint against the insurer is about how the exclusion is read and whether the policy was sold with adequate explanation, while the complaint against the broker is about the advice given. Broker complaints are within the ombudsman's remit too — which is why a broker going into administration complicates things, because a firm that has failed may be outside the scheme's ability to pay.

How the process works

Ben should complain in writing to the insurer and, separately, to the broker's administrators, keeping the two files distinct. He should set out the wording he relies on, the meaning he says a reasonable customer would take from it, the broker's email, and the evidence of his losses. If the insurer issues a final response, or eight weeks pass, the complaint against it goes to the ombudsman. The broker's failure may mean the ombudsman cannot make an award against it, in which case the question becomes whether there is professional indemnity cover or a successor firm.

Evidence and documents

The policy schedule and full wording with the flood and escape-of-water definitions, the broker's email and any notes of the advice given, the surveyor's report, evidence of the closure period (till records, staff rota, bank statements), the loss calculation with invoices and accounts, and the insurer's refusal letters.

Possible outcomes

Possible outcomes include the ombudsman reading the clause in Ben's favour and ordering the insurer to pay, a negotiated settlement at a discount, or a refusal on the wording with the broker route blocked by the administration. It is also possible that the ombudsman's award limit is not the issue at all — £42,000 is well within it — but that the recoverability problem shifts from the merits to who is left to pay.

Costs and timescales

The ombudsman service is free. Complaints against the insurer and the broker run in parallel and can take months, and the broker's administration adds delay. Ben should consider whether a commercial solicitor's involvement is worth the cost, particularly if a successor to the broker or an indemnity insurer can be identified.

Important limitations

The ombudsman decides complaints against the firm complained about, so a single complaint cannot neatly resolve a dispute between an insurer and an insolvent broker. The broker's administration may mean no award can be enforced against it even if the ombudsman agrees Ben was misled. 'You're covered for everything' is a good piece of evidence but not conclusive — the policy wording is the contract, and the question is what a reasonable customer would have understood.

Practical next steps

Ben should keep the two files separate, ask the insurer for the specific clause and its reasoning in writing, and write to the broker's administrators asking who holds its professional indemnity cover. He should preserve the broker's email and any records of the sale, and get the loss figure properly evidenced before any settlement discussion, because a discount on an unevidenced number is much larger.

Sources

Scenario C
Limitations and an alternative route
United Kingdom (eligibility limits and commercial alternatives)

The haulage firm too big for the ombudsman — a £190,000 refusal with no free route left

A typical case — fictional illustration

The situation

Sam is 56 and built Kestrel Logistics from one van into a fleet of 40 vehicles with 85 employees and an £18 million turnover. When a fire in a neighbouring unit spread to his yard, the fleet insurer refused the £190,000 claim, relying on a maintenance clause that requires service records 'in accordance with the manufacturer's schedule'. Two vehicles had services recorded slightly late, by 900 miles each. Sam's operations manager had flagged the ambiguity of the clause to the broker two years earlier and the broker told him it was 'standard, everyone's fine'. Sam's first instinct is the ombudsman, because it worked for a friend with a home insurance dispute.

The problem they face

Sam has a large commercial loss, a technical defence, and a legal instinct that may be wrong. If he spends months trying to use a consumer-facing route that excludes businesses of his size, he burns time and money and may lose the commercial advantage of a quick, reasoned negotiation.

Why this service may help

This is the clear case where the ombudsman route is not available and the value lies in recognising that early. The service covers individuals, and businesses only where they meet strict size tests — broadly fewer than ten employees with a turnover or balance sheet of no more than €2 million. With 85 employees and £18m turnover, Kestrel falls outside its compulsory jurisdiction, so the realistic routes are negotiation, mediation, the policy's own dispute or arbitration clause, and commercial litigation.

How the process works

Sam should first read the policy's dispute resolution clause: commercial policies frequently require arbitration or mediation before court proceedings. Then he should build the case on the clause's wording and commercial reasonableness — what 'in accordance with the manufacturer's schedule' means when the schedule is a mileage interval, and whether a 900-mile variance caused or contributed to the fire at all. His broker's response becomes a separate question of professional advice, which may itself be a complaint against the broker or a claim on its indemnity insurance.

Evidence and documents

The full policy and the maintenance clause, the vehicle service records showing the actual intervals, the fire report and cause determination, the loss calculation with invoices, repair quotes and hire records, the broker's correspondence including the two-year-old query, and his own internal risk records.

Possible outcomes

Outcomes range from a negotiated settlement — common in commercial claims where both sides can see the clause is not decisive — to arbitration or litigation in which the clause is construed. It is also possible a court accepts the insurer's reading and Sam recovers nothing on the claim, leaving a separate and difficult argument against the broker. The insurer's willingness to talk usually improves sharply once the case is properly evidenced.

Costs and timescales

Mediation and arbitration involve professional fees and can be faster than litigation. Commercial litigation carries significant costs and the losing side often pays a share of the winner's costs, so the economics of a £190,000 claim have to be assessed carefully against the clause's strength. A solicitor's initial opinion on the wording is the cheapest meaningful investment he can make.

Important limitations

The ombudsman cannot be used by a business of this size, so pursuing it wastes weeks; the award limit would also cap recovery even where it applies. Arbitration clauses may be mandatory, meaning that issuing court proceedings first can be a costly mistake. And a maintenance dispute turns on the facts of causation as much as the wording — a late service that had nothing to do with the fire is a strong point, but it has to be evidenced.

Practical next steps

Sam should get a written opinion on the clause and on the policy's dispute-resolution terms before doing anything else, then put a properly evidenced settlement proposal to the insurer's claims lead, framed around the clause's meaning and the absence of causation. He should separately diarise the broker issue, including whether its professional indemnity insurers are on notice.

Sources

Where to go next

If this looks like your situation, find the body that handles it in your country, or check whether another route suits you better.

Cookie Preferences

We use essential cookies to keep you logged in and the site secure. We also use optional cookies for analytics, preferences, and affiliate tracking. You can accept all or refuse non-essential cookies. Read our Cookie Policy for details.

Welcome to JusticeLeague.online

Your global guide to claim authorities, filing portals, and legal navigation.

New here? We've put together a quick walkthrough that covers everything from finding the right authority to filing a claim, uploading evidence, and tracking your progress.

📋 Find Authorities

Search 100+ claim organisations worldwide

📁 File a Claim

Step-by-step intake with AI triage

📚 Learn

Free courses on your rights

🔒 Evidence Vault

Private, encrypted evidence timeline