Can your insurer refuse to pay out, and what can you do about it?

In England and across the UK, an insurer can reject a claim only where the policy, the facts and insurance law allow it. The practical route is usually evidence first, formal complaint second, and the Financial Ombudsman Service or court only if the insurer still will not move.

Can an insurer refuse to pay out on a valid claim?

An insurer cannot refuse to pay out on a valid covered claim just because it does not want to pay: FCA rules require insurers to “handle claims promptly and fairly” and “not unreasonably reject a claim.” If the loss is covered by the policy, the conditions have been met, and the claim is not fraudulent, the insurer is legally obligated to pay losses covered by the policy within the contract and regulatory rules. A claim built on a lie is different: under the Insurance Act 2015, for a fraudulent claim “the insurer is not liable to pay the claim,” so it is no longer a valid claim. The important distinction is between a hard refusal based on policy wording and a weak refusal based on delay, low valuation or internal process. UK insurers reject almost three in ten home insurance claims on FCA-collected data, so a refusal is common enough to challenge carefully, not automatically proof the insurer is right.

What can invalidate landlord insurance?

Lettings guides say failing to update your insurer “could invalidate your policy,” but that overstates the law: an innocent, non-deliberate breach under a UK landlord policy normally lets the insurer reduce the payout proportionately, while only deliberate or reckless breaches can void cover. The Insurance Act 2015 still gives landlords a serious duty before buying or renewing business-use cover: “Before a contract of insurance is entered into, the insured must make to the insurer a fair presentation of the risk.” That means you should disclose material facts about the property, tenancy and risk, such as long unoccupancy, subletting, a change in use, previous claims, building works or known damage. Empty-property clauses are a common trap: landlord buildings cover often stops responding after 30, 45 or 60 days of vacancy, and illegal use such as cannabis farms or brothels is typically excluded. Abodient can keep policy documents, tenancy dates and compliance expiries against the property, which matters because insurance disputes often turn on what the landlord knew, when the tenancy changed, and whether a condition had already expired.

Is there anything you should not tell your insurer?

You should not tell your insurer anything false, exaggerated or guessed as fact, but you also should not volunteer speculative admissions that you cannot support. For consumer insurance, the statutory duty is limited to accuracy: “It is the duty of the consumer to take reasonable care not to make a misrepresentation to the insurer.” Most landlord insurance is bought for a letting business rather than wholly private use, so the business-insurance fair-presentation duty is usually the safer standard: tell the insurer the material risk facts and answer every question completely. What not to tell your insurance company is not a magic list of forbidden words; it is anything that turns uncertainty into an admission, such as saying the tenant deliberately caused damage before you have evidence, or agreeing that the property was unoccupied beyond the policy limit if you have not checked the dates. Give documents, photographs, tenancy records and timelines, and separate facts from opinion.

What can you do if your insurer rejects your claim?

If your insurer rejects your claim, ask for the policy clause relied on, send evidence answering that clause, make a formal complaint, then go to the Financial Ombudsman Service within six months of the final response or sue if the value and risk justify it. The insurer must send a final response, or explain the delay, by eight weeks after receiving your complaint: FCA DISP says the firm must act “by the end of eight weeks after its receipt of the complaint.” After that, the Ombudsman deadline is strict: a complaint is normally out of time if made “more than six months after the date on which the respondent sent the complainant its final response.” In England and Wales, a straightforward breach-of-contract money claim may be allocated to the small claims track if it is worth not more than £10,000, because the CPR says the small claims track is normal for a claim “which has a value of not more than £10,000.” The Ombudsman is usually cheaper and more flexible; court is sharper where the legal issue is narrow and the evidence is complete.

How long do insurers have to deal with a claim?

UK insurance law sets no fixed number of days for an insurer to respond to or pay a claim, but it does require claims to be handled promptly and paid within a reasonable time. The Insurance Act 2015 says: “It is an implied term of every contract of insurance that if the insured makes a claim under the contract, the insurer must pay any sums due in respect of the claim within a reasonable time.” FCA rules add that insurers must “handle claims promptly and fairly,” so how long insurers have to deal with a claim depends on the complexity of the loss, the need for investigation, expert reports, fraud checks, scope disputes and whether the insurer is waiting for information from you. A simple escape-of-water claim should not move at the same pace as a subsidence claim requiring monitoring. The fixed eight-week clock applies to complaints, not to every claim decision or every payout.

What can you do if your insurer keeps dragging out a payout?

If your insurer keeps dragging out a legitimate payout, put the delay into a formal complaint, demand the undisputed amount immediately, ask for the named reason any balance is withheld, and rely on the insurer’s duties to settle promptly once terms are agreed. FCA ICOBS requires insurers to “settle claims promptly once settlement terms are agreed,” and the Insurance Act 2015 makes delay itself actionable because damages for breach of the reasonable-time duty are “in addition to and distinct from” the insurance money owed. That matters where a landlord insurer agreed to pay out months ago, then spent weeks bouncing the claim between departments or offered barely a tenth of the repair cost without a proper scope. Send an itemised schedule, photos, contractor quotes, rent-loss calculation if relevant, and a short deadline for a final position. If the insurer misses the complaint deadline or issues an unsatisfactory final response, take the file to the Financial Ombudsman Service; if the loss is urgent or high-value, consider legal action for the claim sum, interest and delay damages.

Why can an insurance company refuse to renew a policy?

An insurance company can refuse to renew a policy because, outside discrimination limits, no UK rule forces an insurer to keep offering cover for a risk it no longer wants. The Financial Ombudsman Service puts the commercial position plainly: “an insurer might decide not to offer cover at all for a particular risk, which is their decision to make.” Common reasons include claims history, subsidence risk, unoccupancy, poor maintenance, repeated escape-of-water claims, a change in tenant type, non-standard construction, flood exposure or the insurer leaving that market. In England, Wales and Scotland, that freedom is limited by the Equality Act 2010: a service provider “must not discriminate against a person requiring the service by not providing the person with the service.” Insurance has specific age and disability carve-outs where decisions are properly based on risk data, but a refusal to renew should still be explainable as underwriting, not unfair treatment. Northern Ireland has separate equality law, so do not assume the Equality Act route applies there.

Who pays the excess on a buildings insurance claim?

The policyholder normally pays the excess on a buildings insurance claim, whether the policyholder is the landlord, freeholder, management company or leaseholder named under the policy. The Financial Ombudsman Service says: “The majority of policies explain that the customer must pay an excess toward the claim cost.” The ABI describes the excess as “the first amount of any claim that you must pay,” which is why a higher voluntary excess usually reduces the premium but increases the cash you must find when there is a claim. In landlord buildings insurance, the tenant usually does not pay the excess unless the tenancy agreement makes them liable for that type of loss and the charge is otherwise lawful. In leasehold blocks, the service-charge position depends on the lease and block policy arrangements, not on a general insurance rule. The key practical question is who is the insured customer under the policy and who the contract makes responsible for the first slice of the claim.

Can an insurer apply the excess more than once for the same event?

An insurer can apply the excess more than once only if the policy wording and the facts justify treating the loss as more than one claim, incident, insured event or section of cover; there is no FCA rule that automatically caps the excess at once per event. The closest regulator rule is still the general duty to “handle claims promptly and fairly,” so a landlord facing five £250 excesses because a tenant damaged five rooms with one hammer should ask for the exact clause that turns one course of vandalism into five incidents. The Ombudsman’s approach to excesses is practical rather than mechanical: it has said it may be unfair to apply two excesses where one suitcase contains belongings for two people, because “we might not think it’s fair and reasonable for you to apply an excess for the parent and an excess for the child.” That example is travel insurance, not buildings cover, but the fairness logic is useful. Push back before accepting the payout: demand the incident definition, the loss adjuster’s event analysis and a revised calculation.

Does the insurer pay you or the contractor?

The insurer may pay you or the contractor depending on the policy wording and the settlement method, and many policies let the insurer choose repair, replacement, cash payment or reinstatement. The Financial Ombudsman Service says most policies include wording such as: “we will decide whether to repair, replace, pay cash or reinstate the damaged part of the building.” Where the insurer appoints an approved contractor, it is normal for that contractor to bill the insurer directly; where the insurer makes a cash settlement, the money normally goes to the policyholder, who pays their own contractor. A landlord can ask to use their own builder, but an online claim that UK insurance law always gives you that right overstates the position: the Ombudsman has said, “We agreed that his insurer had the right to make that choice, but only if the settlement amount was fair.” In England and Wales, a special fire-damage rule can require insurance money to be spent on reinstating the building rather than simply paid out, where an interested person requests it or fraud is suspected.

What if the insurer's estimate is lower than your contractor's quote?

If the insurer’s estimate is lower than your contractor’s quote, treat it as a scope-and-evidence dispute: get both figures itemised, compare them line by line, and insist the cash settlement reflects the realistic repair cost. No UK statute sets a formula for an insurance estimate lower than contractor pricing, but FCA rules still require the insurer to “handle claims promptly and fairly.” The useful Ombudsman principle is that a low insurer estimate is not automatically fair just because it came from the insurer’s system; in one buildings-claim case, the Ombudsman noted that “The two quotes suggested that the realistic market price for Simon was around £10,000.” Ask the insurer whether its estimate includes VAT, access, drying, strip-out, making-good, professional fees, hidden damage, matching materials and regional labour rates. If the insurer relies on an approved contractor, ask whether that contractor will actually do the full work for that price. If not, the lower number is not a settlement; it is an unsupported offer.

Should you show your contractor the insurance estimate?

You can show your contractor the insurance estimate, but the better practice is to ask first for an independent itemised quote and then use the insurer’s estimate only to identify missing scope, price assumptions and disagreements. There is no UK insurance rule that forbids showing a contractor your insurance estimate, and there is no rule requiring you to do it. The risk of showing the number too early is commercial, not legal: a contractor may price to the insurer’s allowance instead of pricing the actual work. The risk of hiding it throughout is that the two sides talk past each other, with one quote allowing for drying, plastering, flooring and VAT while the other covers only visible damage. A sensible sequence is: contractor inspects, contractor gives an itemised quote, insurer gives an itemised estimate, then you compare them line by line. If the contractor needs the insurer’s scope to confirm whether the job is complete, share the scope, not just the total.

Which insurance company rejects the most claims in the UK?

For UK buildings-only home insurance, Which?’s analysis of FCA data named esure, Lloyds Banking and Rentokil as the lowest claims-acceptance performers, each accepting only 45–50% of claims. Which? reported that “three firms - esure, Lloyds Banking and Rentokil - each have claims acceptance rates of 45-50 per cent for buildings only cover.” That is the clearest public market answer to which insurance company denies the most claims in the UK, but it is not a legal finding that those insurers wrongly rejected claims. FCA rules do not set a permitted rejection-rate limit; they require each insurer to “not unreasonably reject a claim.” Rejection rates also depend on product mix, customer behaviour, excess levels, policy exclusions and how claims are counted. For a landlord deciding whether to buy cover, a low acceptance rate is a warning sign to read exclusions and claim conditions closely; for a disputed claim, your own policy wording and evidence matter more than a market ranking.

Which insurance company gets the most complaints in the UK?

Admiral was reported as the most complained-about UK general insurer in the second half of 2024, with Aviva, Direct Line, Axa and RSA also in the top group. Insurance Post, reporting Financial Ombudsman Service data, stated: “Admiral, Aviva, Direct Line, Axa and RSA were the most complained about general insurers in the latter half of 2024.” Complaint volume is not the same as worst behaviour, because large insurers naturally generate more complaints than niche providers, and complaint numbers should be read alongside uphold rates and market share. FCA complaint publication rules also mean the biggest firms are more visible: where a firm reports 500 or more complaints, it “must publish a summary of the complaints data contained in that report.” For a landlord choosing insurance, the useful test is not only who gets the most complaints in the UK, but whether complaints concern claims handling, delays, settlement values, exclusions or renewal pricing.

How long does a subsidence claim affect your insurance?

No UK statute fixes how long a subsidence claim affects your insurance, but in the market it commonly affects home or landlord cover for about 5 to 7 years and may need declaring whenever an insurer asks about it. Uswitch states: “A subsidence claim stays on your record for around 5 to 7 years.” The legal rule is not a fixed disclosure period; for consumer insurance, the duty is to take reasonable care not to misrepresent, and for landlord business insurance the safer rule is fair presentation of the risk. Subsidence is unusually sticky because it can signal ground movement, drainage problems, tree-root risk and future structural movement, not just a one-off claim. Even after 7 years, an insurer may ask whether the property has ever suffered subsidence, heave or landslip; if it asks that, answer accurately. The practical answer to how long subsidence affects insurance is therefore: expect pricing and underwriting effects for 5–7 years, but disclose for longer if the proposal question asks longer.

Can an insurer refuse loss of rent because the tenant was already in arrears?

An insurer can refuse a loss-of-rent add-on only if the buildings policy wording makes pre-existing arrears relevant, because no direct UK authority says arrears before the damage automatically defeat landlord buildings loss-of-rent cover. The closest binding rule is the FCA claims rule requiring insurers to “not unreasonably reject a claim.” The arrears exclusions found in the market are from rent-guarantee insurance, which is a different product from loss of rent after insured property damage. Let Alliance rent guarantee wording requires that “such Arrears commenced during the Period of Cover,” and Just Landlords excludes “any event which commenced before the start of the insurance.” Those clauses make sense for rent-guarantee cover because the insured event is non-payment. A buildings loss-of-rent add-on is different: the usual insured problem is that covered damage makes the property unlettable or unusable. If your insurer accepts the tenant damage claim but refuses the rent element because the tenant was already in arrears, ask it to identify the exact exclusion and explain the causal link.

Last reviewed September 2026.

Sources

• FCA Handbook ICOBS 8.1.1R — “handle claims promptly and fairly” Source
• FCA Handbook ICOBS 8.1.1R — “not unreasonably reject a claim” Source
• Insurance Act 2015 s.12(1) — “the insurer is not liable to pay the claim” Source
• Belvoir lettings guide — “could invalidate your policy” Source
• Insurance Act 2015 s.3(1) — “Before a contract of insurance is entered into, the insured must make to the insurer a fair presentation of the risk.” Source
• Insurance Act 2015 Sch.1 para 6(1) — “In addition, if the insurer would have entered into the contract (whether the terms relating to matters other than the premium would have been the same or different), but would have charged a higher premium, the insurer may reduce proportionately the amount to be paid on a claim.” Source
• Consumer Insurance (Disclosure and Representations) Act 2012 s.2(2) — “It is the duty of the consumer to take reasonable care not to make a misrepresentation to the insurer.” Source
• FCA Handbook DISP 1.6.2R — “by the end of eight weeks after its receipt of the complaint” Source
• FCA Handbook DISP 2.8.2R — “more than six months after the date on which the respondent sent the complainant its final response” Source
• Civil Procedure Rules Part 26 — “which has a value of not more than £10,000.” Source
• Insurance Act 2015 s.13A(1) — “It is an implied term of every contract of insurance that if the insured makes a claim under the contract, the insurer must pay any sums due in respect of the claim within a reasonable time.” Source
• Insurance Act 2015 s.13A(5) — “in addition to and distinct from” Source
• Financial Ombudsman Service, insurance pricing and renewals — “an insurer might decide not to offer cover at all for a particular risk, which is their decision to make.” Source
• Equality Act 2010 s.29(1) — “must not discriminate against a person requiring the service by not providing the person with the service.” Source
• Financial Ombudsman Service, settling home buildings insurance claims — “The majority of policies explain that the customer must pay an excess toward the claim cost.” Source
• Association of British Insurers, home insurance — “the first amount of any claim that you must pay” Source
• Financial Ombudsman Service, policy excesses and limits — “we might not think it’s fair and reasonable for you to apply an excess for the parent and an excess for the child.” Source
• Financial Ombudsman Service, settling home buildings insurance claims — “we will decide whether to repair, replace, pay cash or reinstate the damaged part of the building” Source
• Financial Ombudsman Service case study — “We agreed that his insurer had the right to make that choice, but only if the settlement amount was fair.” Source
• Fires Prevention (Metropolis) Act 1774 s.83 — “towards rebuilding, reinstating or repairing such house or houses or other buildings so burnt down, demolished or damaged by fire” Source
• Financial Ombudsman Service case study — “The two quotes suggested that the realistic market price for Simon was around £10,000.” Source
• Which?, home insurer claims acceptance analysis — “three firms - esure, Lloyds Banking and Rentokil - each have claims acceptance rates of 45-50 per cent for buildings only cover.” Source
• Insurance Post, Financial Ombudsman complaints data — “Admiral, Aviva, Direct Line, Axa and RSA were the most complained about general insurers in the latter half of 2024.” Source
• FCA Handbook DISP 1.10A.1R — “must publish a summary of the complaints data contained in that report” Source
• Uswitch, subsidence home insurance — “A subsidence claim stays on your record for around 5 to 7 years.” Source
• Let Alliance Rent Guarantee policy wording — “such Arrears commenced during the Period of Cover” Source
• Just Landlords Rent Guarantee policy wording — “any event which commenced before the start of the insurance” Source