Reports reveal that more than one in five home insurance claims is rejected based on figures from 2013 and 2014.
Over 20 percent of claims in the years mentioned are not successful for those with an average payout of £2,520, according to the Association of British Insurers (ABI). For motor insurance claims, one in 100 is declined while one in ten travel insurance claims are declined. Successful payout claims are averaging £2,160 and £884 respectively, Mail Online reported.
Nineteen insurers analyzed 6.9million claims including 4.3million for cars, 1.8million for homes and contents and 800,000 for travel where the figures are taken. The data is presented in this manner to help improve transparency and build consumer trust.
Most insurers are confused about the coverage which may be one reason why customers fail to get the right insurance. There are different add-ons like legal expenses coverage or for emergency assistance when a boiler breaks down because all these could be bought by insurance.
Reasons why many home insurance claims are rejected are due to the normal wear and tear of the houses or the damage that is caused by the lack of maintenance by the homeowners which is not insurable.
Aside from that, some claims were dismissed because its value is less than the policy excess. In other cases, the customer did not buy the right kind of coverage.
"So we will use the analysis we are publishing today to drive awareness campaigns to improve even further the acceptance rates for home and travel. Buying insurance should never just be about getting the cheapest price in the quickest time possible, it should be about ensuring you have the right product for your hour of need," said Huw Evans, the ABI's director general, according to BBC News.
To avoid confusion, ABI suggested that insurers need to read and understand the terms and conditions both for renewing and buying home insurance.
Oftentimes, disputes between insurers and individuals are brought to the ombudsman. At present, the independent Financial Ombudsman received 1,057 complaints between April and December 2015 and it also received 3,037 buildings insurance complaints.
