Car Insurance Claim Denied: What to Do and How to Win Your Appeal

Car insurance denials are among the most common insurance disputes. Whether your claim was rejected because of a fault dispute, a policy exclusion, an unlisted driver, or a missed reporting deadline, you have rights — and clear steps you can take to challenge the decision.

This guide covers the most common grounds for motor insurance claim denial and how to appeal effectively, with guidance for policyholders in the UK, Australia, Singapore, Malaysia, UAE, and other key markets.

Why Car Insurance Claims Are Denied

Motor insurance denials follow predictable patterns. Understanding which applies to your situation is the first step to an effective appeal.

Fault disputes: Your insurer determines you were at fault for the accident, reducing or eliminating your claim. Or in a third-party claim, the other driver's insurer disputes liability.

Unlisted driver: The driver at the time of the accident was not named on the policy. This is a common denial ground for policies that restrict coverage to named drivers.

Use exclusions: The vehicle was being used for a purpose not covered by the policy — typically commercial use (deliveries, taxi, rideshare) when only private use is covered.

Reporting and notification failures: You failed to report the accident to your insurer within the required timeframe (often 24 hours to 7 days depending on the insurer and jurisdiction).

Drink driving or impairment: The driver was under the influence of alcohol or drugs. Most motor policies exclude this.

Driving without a valid licence: The driver had an expired, suspended, or invalid driving licence.

Vehicle condition exclusions: The vehicle was in an unroadworthy condition at the time of the accident.

Policy lapse: Premiums weren't paid and the policy had lapsed by the time of the accident.

Exclusion of certain damage types: Mechanical breakdown, wear and tear, flood damage (if you drove into floodwater knowingly), and some types of storm damage are commonly excluded.

Fraud allegations: The insurer believes the claim is staged or exaggerated.

Your Rights by Country

United Kingdom

The Motor Insurers' Bureau (MIB) provides coverage in cases where the at-fault driver is uninsured. The Financial Ombudsman Service (FOS) handles disputes about your own insurer's decisions.

Under the Consumer Insurance (Disclosure and Representations) Act 2012, an unlisted driver denial may be challengeable if you reasonably believed the driver was covered (e.g., a "any driver with permission" clause or a general policy description that didn't clearly exclude the driver).

The Road Traffic Act 1988 mandates third-party insurance for all vehicles on public roads. If your insurer has paid a third party and then seeks to recover from you (subrogation), there are rules about when this is permissible.

Australia

The Insurance Contracts Act 1984 applies. Section 54 is particularly powerful: it prevents an insurer from refusing a claim based on an act or omission that did not cause or contribute to the loss. For example, if you failed to report the accident within the required timeframe but the accident itself was genuine and the late notification didn't affect the insurer's ability to investigate, section 54 may prevent a denial on that ground alone.

AFCA (afca.org.au) handles all motor insurance disputes.

Compulsory Third Party (CTP) insurance disputes are handled by state-based bodies (e.g., the State Insurance Regulatory Authority in NSW) rather than AFCA.

Singapore

FIDReC (fidrec.com.sg) handles motor insurance disputes. Singapore's motor policies follow standard Motor Tariff provisions. Disputes about liability, repair costs, and named driver exclusions are common. Third-party property damage claims are handled through the Motor Claims Framework (MCF) which standardises procedures for inter-insurer settlements.

Malaysia

Bank Negara Malaysia (BNM) and the OFS (ofs.org.my) handle motor insurance disputes. Malaysia operates a largely standard Motor Tariff for private car insurance, meaning premium and base coverage terms are regulated. Common disputes involve workshop selection (betterment disputes for older vehicles) and sum insured valuation.

UAE

The Central Bank of the UAE (CBUAE) handles insurance complaints. UAE motor insurance is mandatory (Third Party Liability as minimum; comprehensive is optional). CBUAE disputes are filed at centralbank.ae.

Step-by-Step: How to Appeal a Denied Motor Insurance Claim

Step 1: Get Everything in Writing

Request a full written denial from your insurer specifying:

• The policy clause being applied
• The facts the insurer relies on
• Any investigator or assessor reports

For fault disputes, request a copy of any investigation report or witness statements the insurer used to determine liability.

Step 2: Gather Your Evidence

The strength of a motor insurance appeal often depends on the quality of physical evidence:

• Photos: Of the accident scene, vehicle damage from all angles, road conditions, road markings, traffic signs. Timestamp these if possible.
• Dashcam footage: If you have a dashcam, this is your most powerful evidence. Download and preserve footage immediately.
• Witness statements: Names and contact details of any independent witnesses. Written witness statements are stronger than unverified claims.
• Police report: In most countries, you should file a police report for accidents above a damage threshold or involving injury. Obtain a copy.
• Repair estimates and engineers' reports: Independent repair estimates can counter insurer valuations.
• CCTV footage: Traffic cameras, business CCTV, or private cameras near the accident scene. Request footage promptly — it is often deleted after 7 to 30 days.

Step 3: Challenge Fault Determinations

Fault decisions in motor insurance are based on the insurer's assessment of the facts and applicable traffic law. They are not infallible.

Common grounds for challenging fault determinations:

• The insurer relied on the other party's account without adequate independent evidence
• Traffic camera or dashcam evidence contradicts the finding
• The other driver has a history of disputed claims (fraud indicators)
• The insurer applied the wrong legal standard of negligence
• The accident circumstances involve shared or contributory negligence that wasn't properly accounted for

An independent accident reconstruction expert can be powerful evidence in disputed fault cases, though the cost needs to be proportional to the claim value.

Step 4: Challenge Exclusion Applications

For each exclusion your insurer has cited, check:

• Unlisted driver: Did you have a policy with "any driver with owner's permission" coverage? Was the exclusion of named-only drivers clearly communicated? For young or inexperienced driver exclusions, was the driver actually inexperienced?
• Use exclusion: Was the commercial use clearly defined? If you occasionally used a personal vehicle to go to a business meeting, does this constitute "commercial use"?
• Reporting deadline: Did the late report actually cause the insurer any prejudice? In Australia, section 54 specifically addresses this.
• Drink driving: Was there a confirmed breathalyser reading? Was the driver actually impaired? Were there mitigating circumstances?

Step 5: Apply Section 54 (Australian Policyholders)

If you are in Australia and your claim was denied for a breach of policy condition (late reporting, failure to cooperate with an investigation, using an unlisted driver for one trip), check whether section 54 of the Insurance Contracts Act 1984 applies.

Section 54 provides that an insurer cannot refuse a claim solely because of an act or omission of the insured if that act or omission did not cause or contribute to the loss. This is a powerful protection.

Step 6: File a Formal Internal Complaint

Write a formal appeal letter to the insurer's complaints department:

• Reference the claim and denial details
• Challenge each denial ground with specific counter-evidence
• State your remedy clearly (e.g., payment of the claim, reversal of the fault finding, coverage of the repair cost)
• Set a 21-day deadline for a written response

Step 7: Escalate to the External Dispute Body

If the internal complaint fails:

• UK: FOS — financial-ombudsman.org.uk
• Australia: AFCA — afca.org.au
• Singapore: FIDReC — fidrec.com.sg
• Malaysia: OFS — ofs.org.my
• UAE: CBUAE — centralbank.ae
• Ireland: FSPO — fspo.ie
• Hong Kong: ICCB — ia.org.hk

Common Mistakes to Avoid

Not preserving dashcam footage immediately: Dashcam footage may overwrite after 1 to 3 days depending on the device. Download it immediately after an accident.

Admitting fault at the scene: Statements made at the scene may be used by the insurer. Don't admit fault even if you think you may be responsible — let the investigation determine this.

Not notifying your insurer promptly: Even if you decide not to claim, notify your insurer of any accident within the required timeframe. Failure to notify can prejudice your right to claim later.

Accepting a total loss valuation without challenge: Insurer valuations for total loss are often low. Get independent market valuations and negotiate. Both AFCA (Australia) and FOS (UK) regularly handle disputes about inadequate total loss payments.

Not appealing because the amount seems small: Even small motor claims are worth appealing if the denial is unfair. The principle matters, and the complaints process costs you nothing.

Getting Help

ClaimBack (claimback.app) generates professional car insurance appeal letters tailored to your specific situation — whether you're challenging a fault finding, an exclusion application, a total loss valuation, or a late-reporting denial. The tool is free and covers multiple countries' regulatory frameworks.

Summary

1. Get the full written denial with the specific clause and facts cited
2. Gather physical evidence: photos, dashcam, CCTV, witness statements, police reports
3. Challenge fault determinations with independent evidence
4. Apply section 54 of the Insurance Contracts Act (Australia) for breach-of-condition denials
5. Challenge each exclusion specifically — the burden is on the insurer to prove the exclusion applies
6. File a formal internal complaint with a 21-day deadline
7. Escalate to FOS, AFCA, FIDReC, or the appropriate national body if denied