Reasons for Car Insurance claims being rejected

Reasons for Car Insurance claims being rejected

We require everyone to have car insurance when taking out a car finance agreement with us as it is a legal requirement. You must always provide accurate information on your car insurance application and keep the insurance company updated if anything changes, failure to do so or not updating your details when your circumstances change could affect your premiums and could lead to your insurer cancelling your policy, or invalidating your policy when you make a claim.

Always read your policy carefully to see what you are actually covered for and what could prevent you from making a claim in the future.

Car insurance premiums vary and are based on a number of factors, some of which include:


The true address or where the car is parked at night should be disclosed, if the area is known for car theft and break-ins the risk for such a claim would be higher which will increase the cost of the premium.

Class of use:

When taking out cover you will be asked if you plan to use the vehicle for:

Social only cover: This is when you use your car for journeys other than driving to and from work such as going to the supermarket or driving to friends houses.

Social and Commuting: This covers driving to and from work and social journeys too, even driving to a train station to get a train to work is classed as commuting.

Business cover: This is when you use the car outside of commuting to and from work such as driving to meetings or carrying business equipment.

Car modifications:

Any modifications to your vehicle must be disclosed to your insurer.

They could be increasing the value of your car which affects your premium, making your car more powerful which could be seen as a higher risk for accidents or even a more visually appealing car could be more of a target for thieves.

Even having a small modification such as a bumper sticker should be declared to your insurer.


This is when someone insures the vehicle in the name of someone who is not the main driver. This could be to get lower premiums for a more experienced driver when a higher risk person is actually driving the vehicle and is classed as insurance fraud.

This can be avoided by adding the low risk driver to the policy as a second named driver and could reduce the premium too.


Pets are legally required to be secured when you are driving with them in your vehicle. It can be argued that if you have an accident with an unsecured pet in the car that they could have caused a distraction for you.

Charging for lifts:

Unless you have a valid taxi driver policy on your car insurance, any money for giving friends and colleagues lifts in your vehicle and charging them money for it could invalidate your insurance agreement if you are making a profit.

Even your passengers just chipping in for petrol comes under this rule if they pay you over the cost of the fuel used.


Insurance cover can be invalidated if you make a claim while the vehicle is overloaded whether with more people than you have seatbelts for, or cargo and passengers that exceed your vehicles weight limit.

It is also illegal in the UK to overload and drive a vehicle as it can cause wear and damage to roads which is at the taxpayer’s expense to fix.

It is more dangerous to drive an overloaded vehicle as it makes them more difficult to steer and takes longer to stop.

To ensure your vehicle is not overloaded you can refer to your vehicle’s handbook for the weight limit. Police can identify an overloaded car if the back is closer to the road or the tyres appear flat.


Leaving windows open, car unlocked, keys in ignition while your car is unattended or anything else that would make it easy for someone to steal your vehicle could be seen as negligence and invalidate a claim.

What can you do if your insurance claim is rejected and you believe the decision is incorrect or unfair?

According to the money advice service the insurance company cannot reject your claim if you have answered all questions honestly and best to your knowledge.

Contact the insurers complaints department if you wish to dispute the reason your claim was rejected.

If you still feel the final decision is unfair you can take the matter further to the Financial Ombudsman Service (FOS)