What happens if your car insurance claim is denied?
In the UK, around 22% of motor insurance claims were rejected in 2025, leaving more than 1.2 million drivers liable for their own costs.
A denied claim means your insurer refuses to cover repairs, compensation, or third-party costs, often because the policy terms weren’t met. The consequences can be severe. With the average unfunded burden from denied claims topping £1.2 billion annually, thousands of drivers each year face bills ranging from a few hundred pounds to tens of thousands.
The most common reasons for rejection include non-disclosure of information (35% of cases), incorrect use of the vehicle such as business use without cover (22%), or driving a car deemed unroadworthy (18%). Late notification and policy exclusions account for another significant share, while drink or drug driving can void a policy entirely.
This article explains what a denial actually means, how insurers reach their decisions, your rights to challenge a rejection, and the steps you can take to avoid being caught out.
What does it mean when an insurance claim is denied?
When your car insurance claim is denied, it means your insurer refuses to pay for repairs, compensation, or third-party costs, leaving you personally responsible for the expenses.
In practice, denial can take two forms. A full denial means the insurer won’t pay anything, often due to policy breaches like undeclared modifications or driving while uninsured. A partial denial occurs when only part of the claim is refused, such as rejecting personal injury damages while covering repair costs.
For drivers, the financial impact is immediate. With repair bills often exceeding £1,000 and third-party costs running far higher, a denied claim can quickly spiral into a serious financial strain. Industry figures suggest denied claims collectively impose over £1.2 billion in unfunded costs on UK motorists each year.
To illustrate the difference:
- A full denial might leave you liable for both repairing your own car and paying damages to another driver, a liability that could run into tens of thousands of pounds.
- A partial denial could mean your car repairs are covered, but your claim for lost earnings or medical expenses is rejected, leaving you to fund them yourself.
Understanding these distinctions is important, because the way your claim is denied shapes both your financial exposure and your options for challenging the decision.
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Get QuotesHow do insurers decide to reject a claim?
Insurers reject claims when they find breaches of policy terms, non-disclosure, or other factors that make the claim invalid under the contract.
When you make a claim, insurers review your application details, the policy wording, and the circumstances of the incident. If they discover missing information, misrepresentation, or evidence that conditions weren’t met, they may refuse payment. Fraud detection systems and cross-checks with databases like the Claims and Underwriting Exchange (CUE) are also part of the process.
Recent industry data shows the leading causes of claim denial in the UK:
| Reason for Denial | Share of Rejections | Typical Financial Impact |
|---|---|---|
| Non-disclosure / misrepresentation | 35% | £500 – £100,000+ |
| Incorrect vehicle use (e.g. business use not declared) | 22% | £1,000 – £25,000+ |
| Vehicle not roadworthy | 18% | Often full claim value |
| Late notification of incident | 10% | Partial or full loss of claim |
| Policy exclusions (e.g. driving abroad without cover) | 8% | Total loss of claim value |
| Other (drink/drug driving, uninsured driving, fraud) | 7% | Full loss, plus legal consequences |
Insurers argue that these checks protect all policyholders by preventing fraud and ensuring fairness. But for drivers caught out by small mistakes—such as failing to disclose a minor modification—the rejection can feel deeply unfair. That’s why knowing the main reasons for denial is essential.
Do you have any rights if your claim is refused?
Yes. If your car insurance claim is denied, you have the right to request a written explanation, challenge the decision, and escalate the case to the Financial Ombudsman Service.
UK insurers must follow strict rules set by the Financial Conduct Authority (FCA). If they deny a claim, they are required to provide clear reasons. As a policyholder, you can ask for the decision in writing, review the evidence, and submit additional documents if you believe the insurer overlooked something.
If you’re not satisfied, the next step is a formal complaint through the insurer’s internal process. They have up to eight weeks to respond. If the matter is still unresolved, you can take it to the Financial Ombudsman Service, which offers an independent review at no cost to you. Many drivers have successfully overturned denials this way, particularly where insurers misinterpreted policy wording or dismissed evidence too quickly.
For more serious disputes involving high-value claims, legal action through the courts is also an option. While costly, it can be worthwhile in cases of substantial financial loss.
In short, a denial is not always the final word. You have consumer protections in place to ensure insurers act fairly, and in some cases, persistence pays off.
Why might your claim be denied even if you think you’re covered?
Claims are often denied because of details in the policy wording, missed disclosures, or conditions you didn’t realise applied.
One of the most common reasons is non-disclosure. Many drivers forget to declare previous accidents, convictions, or even modifications like tinted windows or alloy wheels. If the insurer later discovers these omissions, it may void the claim.
Policy exclusions also catch people out. For example, a policy may not cover business use, driving abroad, or using the vehicle for hire and reward. If you’re involved in an accident under these conditions, even unintentionally, your insurer can refuse payment.
Timeliness matters too. If an accident isn’t reported within the timeframe required by your policy, often 24 to 48 hours, the insurer may reject the claim outright. This accounts for around 10% of rejections in the UK.
Here’s a common scenario: a driver uses their car occasionally for work without declaring business use. After an accident, the claim is denied because the policy only covers social and domestic driving. The driver believes they’re insured, but the technical breach leads to full rejection.
The lesson is clear: read your policy carefully and disclose everything. What feels like a minor omission can be the difference between a valid claim and thousands of pounds in personal liability.
What steps should you take after a denial?
If your car insurance claim is denied, start by requesting written reasons, reviewing your policy, and gathering evidence before escalating the case through complaints or the Financial Ombudsman.
The first step is clarity. Ask your insurer to explain in writing why the claim was refused. This gives you a paper trail and ensures you understand the grounds for denial. Next, check your policy documents carefully. Sometimes what looks like a flat refusal may be a misinterpretation, or a partial denial that can be challenged.
Gather supporting evidence—repair estimates, medical records, witness statements, or receipts—that strengthen your case. If you can show the insurer overlooked relevant information, they may reconsider.
If that fails, follow the formal complaints procedure. Insurers must respond within eight weeks. Should you still be dissatisfied, escalate the case to the Financial Ombudsman Service, which has the power to overturn decisions if it finds the insurer acted unfairly.
For high-value or complex cases, you may also seek legal advice. While court proceedings are rare, they can be an effective last resort.
Quick steps after a denial:
- Request a written explanation
- Re-check your policy wording
- Collect and submit further evidence
- File a complaint with your insurer
- Escalate to the Financial Ombudsman
By taking these actions methodically, you maximise your chances of reversing an unfair decision.
How can you avoid claim denial in the first place?
You can reduce the risk of a denied claim by being honest in your application, keeping your car roadworthy, and reporting incidents promptly.
Most denials stem from issues that could have been prevented. Non-disclosure is the leading cause, responsible for 35% of rejected claims. That means forgetting to mention a past accident, not declaring modifications, or failing to update your insurer about a change of address could invalidate your cover.
Vehicle condition also matters. If your car isn’t roadworthy—bald tyres, expired MOT, or faulty brakes—an insurer can refuse to pay. In fact, nearly one in five rejections comes down to roadworthiness. Timeliness is another factor: 10% of claims are rejected because drivers waited too long to report them.
Fraud checks are increasingly rigorous. With confirmed motor insurance fraud valued at £65 million in 2023, insurers are more cautious than ever. This means your evidence—photos, dashcam footage, receipts—can make or break a claim.
Ultimately, the best protection is transparency. Declare everything, maintain your vehicle, and act quickly after an incident. Doing so won’t guarantee approval, but it significantly reduces the odds of being caught in the 22% of claims that are refused.
Final thoughts
A denied car insurance claim doesn’t always mean the end of the road, but it can leave you facing serious financial consequences if you don’t act.
In 2025, more than one in five UK motor claims were rejected, representing over a million drivers. The reasons are often straightforward—non-disclosure, incorrect use of the vehicle, poor roadworthiness, or late reporting. Yet the financial impact is huge, with denied claims leaving drivers to absorb more than £1.2 billion in costs each year.
The good news is that you’re not powerless. You have the right to challenge a denial, escalate to the Financial Ombudsman, and in some cases overturn unfair decisions. More importantly, most denials are avoidable. Honest disclosure, proper vehicle maintenance, and timely reporting go a long way towards protecting your claim.
While insurers are becoming stricter due to rising fraud and costs, being proactive and prepared ensures you’re far less likely to join the growing number of drivers left out of pocket.
Frequently Asked Questions (FAQs)
Non-disclosure, incorrect use of the vehicle, poor roadworthiness, late reporting, and policy exclusions account for most claim denials in the UK.
Yes. You can challenge the decision, escalate through your insurer’s complaints process, and take it to the Financial Ombudsman Service if necessary.
You must contact the Financial Ombudsman within six months of your insurer’s final response to your complaint.
Yes. Even if your claim is denied, it must usually be declared when you apply for future cover, and it may affect premiums.
Yes. Many policies require accidents to be reported within 24–48 hours, and failing to do so can result in denial.
You can challenge it if the omission was minor, but significant non-disclosure—such as hiding previous accidents—usually results in a valid denial.
Yes. Undeclared modifications can lead to claims being refused, as insurers consider them material changes to the policy terms.
Yes, but you must disclose the denied claim when applying elsewhere, which may affect the price and availability of cover.