Denied Indemnity
Turning denied indemnity claims into fair outcomes
It is not uncommon for individuals with valid insurance policies to make a claim and to be denied indemnity by their insurer.
There are several reasons why an insurer may refuse to indemnify an insured. Commonly, an insurer will claim that the insured had not disclosed relevant information when the policy was entered or renewed (for example pre-existing damage or the existence of prior claims) which if the insurer had known about, would have affected their decision to provide insurance.
However, the circumstances in which such refusals can be made are limited by the Insurance Contracts Act. Another common claim made by insurers is that the harm suffered was excluded under the policy. They may argue that the harm was suffered as a result of an act or omission of the insured, for example at the time the insured’s house was burgled the front door was unlocked.
Whether such a refusal is legitimate will depend on whether the exclusion clause applies to the balance of probabilities. If for example the door was unlocked but the thieves entered by breaking a window, the insurer has not been prejudiced by the insured’s omission and arguably the exclusion does not apply.
Less commonly, an insurer will refuse indemnity alleging the insured acted fraudulently, by entering or renewing the policy with an intention to deceive the insurer or acting with reckless indifference as to whether the insurer was deceived.
A claim of fraud is a serious allegation and will require the insurer to prove the insured’s intention or reckless indifference.
Depending on the circumstances of the individual claim, there may be grounds to dispute the insurer’s refusal to indemnify the insured. As such, when you receive notice from your insurer that they have made a decision to refuse to indemnify your claim, you should seek legal advice as to your options to dispute their decision.
Our team at Dormer Stanhope is experienced in all forms of dispute resolution and can assist throughout the entire process of your insurance dispute, from advising on your prospects of success to litigation where necessary.
If you or someone you know has been denied indemnity by their insurer, and you believe their denial is not fair, contact Dormer Stanhope today for a free initial consultation.