Almost a third of home insurance claims are being declined, according to data shared by Which? insurance expert Dean Sobers. This figure, based on Financial Conduct Authority (FCA) data, indicates that approximately three in 10 claims are rejected.
Decline rates vary by policy type, ranging from 29% for combined buildings and contents policies, which most people hold, to 38% for other products. Which? research suggests that widespread misconceptions about what home insurance policies cover are a significant factor, leading customers to believe they have protection they do not.
The Financial Ombudsman Service (FOS), which handles disputes, receives thousands of complaints annually in the home insurance sector. The top three types of complaints are declined claims, claim delays, and claim values. The FOS is most likely to uphold complaints concerning delays, doing so 54% of the time for buildings complaints and 46% for contents complaints. Issues with claims repairs and claim values are also frequently upheld.
Insurers, including Aviva and the AA, attribute low acceptance rates to policyholders not fully understanding their policies. Dean Sobers noted that this is a common response from insurers with high rejection rates, suggesting that the complexity of insurance products, with their nuances and exclusions, combined with customers often rushing during purchase, contributes to this issue.