• Henry Naylor


Even though vehicle insurance is a legal requirement to drive on the UK's roads, insurance plays a vital part in compensating us for financial loss in the event of theft or an accident

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Yet many people view vehicle insurance as something they will never need. They believe that accidents always happen to someone else; that the hard earned money spent on insurance premiums could be put to better use.

However, the likelihood of becoming a victim of vehicle theft, or being involved in an accident is much higher than people think.

According to a freedom of information access request by campaign group Access to Justice, over 600,000 vehicle insurance claims were lodged in the year 2017/18.

Unfortunately, despite every motorist thinking their insurance is guaranteed to pay out and cover the loss, thousands of claims are rejected, leaving motorists millions of pounds out of pocket.

And most concerningly, claims that are declined and then referred to the Financial Ombudsmen Service for review are only overturned in 30% of cases.

According to the Association of British Insurers (ABI), the average vehicle insurance claim in the UK (2017) is £2,936, but this rises by many thousands of pounds in the case of vehicle theft or accident write off.

Moreover, motorists on the receiving end of a personal injury claim can expect to pay out an additional £10,816 on average.

The consequences of having an insurance claim declined should not be underestimated: if an accident is your fault, the other party is entirely within their rights to sue and recover their loss. If your vehicle is financed, the finance company will likely cancel the agreement and demand the entire balance is paid in full.

Whatever the case, if you are not in a position to personally settle any claim made against you, the costs can escalate dramatically once legal fees and court fees are added.

Making sure your insurance company pays out in the event of a claim isn't difficult — it's just a case making sure you adhere to the rules laid out in your application and pay attention to the details stated in the policy terms and conditions.

Remember, insurance companies profit by receiving more money from policy premiums than they pay out in claims. So, despite what you may think, it's not in an insurance company's interest to blindly pay out in full on every claim made — and insurers apply their terms and conditions down to the letter.

Insurers also use sophisticated tactics to prove the details in your application are filled out accurately, and that the circumstances surrounding a claim meet the policy rules in full.

To help you meet your obligations correctly, here are 8 common reasons why a vehicle insurance claim could be rejected:

#01 You completed the policy application inaccurately

The devil is in the detail when it comes to completing an insurance policy application. Never assume that hedging the answers to try and secure a better quote won't come back to bite.

Claiming your vehicle is kept overnight in a locked garage or on a driveway when really it's parked in the road is a sure fire way to see a claim rejected if the vehicle is stolen from your home.

In addition, make sure you declare the intended vehicle use correctly. 

One customer who insured his car through Horizon had a claim rejected after driving home from work. The problem was he selected 'social, domestic and pleasure' use in his application and didn't declare his car would be used for commuting back and forth from work.

Why do insurers see this as an important distinction? Because more accidents (1 in 10) happen in the rush hour than at any other time of the day according to an analysis by Direct Line. 

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#02 Your premiums aren't up to date

While some insurers provide a grace period for payment arrears, failing to pay the premium on your renewal, or falling behind on monthly payment plan runs the risk of seeing an insurance claim declined.

Always keep your premiums up to date, and always ensure you update your preferred payment method in the event you change bank, or when a credit or debit card expires.

#03 Your vehicle is not roadworthy

Many people assume that as long as their vehicle has a valid MOT certificate, they comply with their policy requirements.

However, an MOT certificate only proves the roadworthiness of a vehicle at the time of issue. Even though MOT's legally last for 12-months, insurance policy T&C's make it clear a car should be roadworthy at all times.

According to the Financial Ombudsman, worn tyres and neglected braking systems are most often to blame for rejected claims.

Whenever your vehicle passes an MOT test, don't ignore advisories, fix them straight away. Monitor the condition of your car regularly and pay particular attention to

  • broken light lenses,

  • defective bulbs,

  • ABS warning lights,

  • brake pad levels,

  • tyre wear below 1.6mm of tread,

  • windscreen chips,

  • faulty wiper blades, and

  • fluid leaks.

#04 You parked illegally

If your vehicle is stolen or is damaged when parked illegally, this could invalidate your insurance. 

Parking illegally includes pulling over onto a motorway hard shoulder to use a mobile phone, parking on double yellow lines, stopping on a clear way, parking on zig-zags or stopping on a box junction.

#05 Driving without due care and attention

Aside from socially unacceptable driving while using a mobile phone, this much-maligned caveat is used by the Police to cover everything from eating at the wheel to applying makeup in a mirror.

Insurers also pay particular attention to reckless driving, especially the use of excessive speed and driving under the influence of drink and/or drugs.

Reckless driving is also associated with a wide range of misdemeanours many of us are not aware of: remember when you took your driving test, and the instructor insisted you look right and left as you move through traffic lights?

That's because if you drive through a green light and another vehicle jumps a red light from another direction, you can be held liable for any accident if a collision occurs because you didn't take evasive action.

#06 Write off cover is not included in your policy

Always check to see that write off cover is clearly stated in your insurance policy. If it isn't, your insurer is not liable to pay out if your vehicle is written off.

#07 Modifications not declared

Whenever a vehicle is severely damaged in an accident, an insurance assessor will make an inspection to check the damage and calculate the cost of repair — or declare the car a write off.

Assessors also pay close attention to see if a vehicle has been modified in any way. It's always best to declare modifications when you take out a policy, and these can include non-factory upgrades to

  • alloy wheels and tyres,

  • sports exhausts,

  • performance air filters,

  • engine mapping, and

  • body kits.

#08 You used the vehicle for business

With business class insurance costing more than private insurance, many people fail to declare they will be using their vehicle for work, especially if the work use is occasional.

If your policy covers you to commute back and forth from work, this doesn't mean you are covered to use your private vehicle to travel to clients or attend meetings away from your primary place of work.

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How to make sure you don't fall foul of the rules

Armed with a little patience and diligence, you can make sure you are in the best position to make an insurance claim and receive the maximum payout by following these simple rules:

Be accurate

Fill out your insurance application accurately and be honest, even if you might pay a little more on your premium. For example, don't state your vehicle will be kept in a garage unless you intend to park it in the garage every night. 

Read the T&C's

Always read the fine print and familiarise yourself with any restrictions applied to your policy.

Declare everything

Always declare previous driving bans if applicable, as well as any insurance claims made, even if the accident wasn't your fault.

Many insurers don't check this during the application process but you need to be aware that they have the means to check your entire driving history in the event you make a claim.

Make sure your vehicle is roadworthy

Don't rely on the fact your vehicle has an MOT. Make regular checks and fix any defects as soon as you identify them. 

Remember, you are required by law to check your vehicle is roadworthy before you set off on every journey.

Driving a vehicle on the road with defects isn't just a case of potentially invalidating your insurance: the Police regularly issue on-the-spot fines if one or more lights aren't working, and you can expect 3-points on your licence for every tyre that doesn't meet the 1.6mm tread depth requirement.

Drive sensibly

If you want to avoid a 6-points endorsement for using a mobile phone behind the wheel the rule is simple: switch your phone off before you drive. Also, don't forget: pulling over to make or receive a call is also illegal unless it's safe to do so — and your vehicle is turned off with the keys taken out of the ignition.

Keep to the speed limit, don't park illegally, always drive slowly around buses (just in case anyone walks out in front), and obey the traffic light laws — amber means you stop, not get ready. You'll be amazed how many people are caught speeding up at an amber traffic light, only for the light to change to red when they drive through.

Where to get help

If your vehicle is stolen or involved in an accident, your insurer will advise you how to make a claim.

Assuming your insurer agrees to pay out on a claim, never accept the first offer. Most insurers make a low initial offer in the hope a claim won't be challenged.

If an insurer rejects your insurance claim, the first step is to make a complaint and challenge the decision. Most insurers have a formal process you'll need to follow.

If your insurers won't change their mind, and the offer is unrealistic, or the claim is denied, contact the Financial Ombudsman Service. One-third of complaints referred to the Ombudsman are upheld, and the insurers are required to honour the claim.

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