Your Rights as an Insurance Policyholder
Insurers authorised by the Financial Conduct Authority must handle your claim fairly and not unreasonably reject it. If you made an honest, non-deliberate mistake when answering questions on your application, the Consumer Insurance (Disclosure and Representations) Act 2012 prevents the insurer from simply voiding your policy — its remedy must be based on what it would have done had you answered correctly, which may mean a proportionately reduced payout rather than an outright refusal; only deliberate or reckless misrepresentation allows a full rejection. Business policies are instead governed by the Insurance Act 2015. If your insurer rejects a claim or you are unhappy with a settlement, you can complain internally and then, free of charge, refer the dispute to the Financial Ombudsman Service — a statutory scheme for resolving disputes quickly and with minimum formality by an independent person, whose decisions are binding on the firm. Jurisdiction: England & Wales (the FOS and FCA cover the whole of the UK).
Last updated: 2026-03-09
Your Rights
Right to clear information
Insurers must provide clear, fair, and not misleading information about the policy, including what is covered, excluded, and any conditions you must meet.
Right to fair claims handling
Insurers must handle claims promptly, fairly, and not unreasonably deny a valid claim. Under the Insurance Act 2015, insurers must pay claims within a reasonable time.
Right to proportionate remedies
If you made a mistake in your application (non-deliberate misrepresentation), the insurer cannot simply void the policy. Remedies must be proportionate — e.g., adjusting the premium or amending the terms.
Cancellation and cooling-off rights
For most consumer insurance policies, you have a 14-day cooling-off period to cancel (30 days for life insurance) and receive a refund of premium for unused cover.
Right to complain to the Financial Ombudsman
If your insurer rejects your claim or you are unhappy with the settlement, you can complain to the Financial Ombudsman Service (FOS) after exhausting the insurer's internal complaints process. FOS can award up to £415,000.
Common Myths
Insurers can reject your claim for any minor mistake on the application
Under the Consumer Insurance Act 2012, insurers can only reject a consumer claim for deliberate or reckless misrepresentation. For careless mistakes, the remedy must be proportionate.
If you don't claim for years, the insurer must give you a discount
There is no legal right to a no-claims discount — it is a commercial practice that varies between insurers.
You must accept the first settlement offer from the insurer
You can negotiate and challenge the offer. If you disagree, complain internally, then to the Financial Ombudsman.
What To Do
Read your policy carefully
Understand what is and isn't covered, including any conditions and exclusions.
Notify claims promptly
Report any claim to your insurer as soon as possible — delays can prejudice your claim.
Challenge unfair rejections
If your claim is rejected, request a written explanation and use the insurer's complaints procedure.
Escalate to the Financial Ombudsman
If the complaint is not resolved after 8 weeks, refer it to the FOS.
Key Legislation
- Insurance Act 2015
- Consumer Insurance (Disclosure and Representations) Act 2012
- Financial Services and Markets Act 2000
- FCA Insurance Conduct of Business Sourcebook
Useful Contacts
Frequently asked questions
- How long do I have to cancel a new insurance policy?
- For most consumer insurance policies, you have a 14-day cooling-off period to cancel and receive a refund for unused cover. However, if you have taken out life insurance, this period is extended to 30 days. This right allows you to review the policy and withdraw if it is not suitable for your needs.
- Can my insurer reject my claim if I made a mistake on the application?
- No, insurers cannot simply void a policy for a non-deliberate mistake. Under the Consumer Insurance (Disclosure and Representations) Act 2012, remedies must be proportionate. For careless mistakes, the insurer may adjust the premium or amend the terms rather than rejecting the claim entirely. Only deliberate or reckless misrepresentation allows for full rejection.
- What can I do if my insurance claim is rejected?
- You can refer your complaint to the Financial Ombudsman Service (FOS) if you are unhappy with your insurer's decision, but you must first exhaust the insurer's internal complaints process. The FOS provides free dispute resolution and can award up to £415,000. If your complaint is not resolved by the insurer after 8 weeks, you can escalate it to the FOS.
- Do I have to accept the first settlement offer from my insurer?
- No, you are not legally required to accept the first settlement offer. You can negotiate and challenge the amount offered. If you disagree with the settlement, you should use the insurer's internal complaints procedure to explain your position. If the issue remains unresolved, you can then escalate the matter to the Financial Ombudsman Service.
- Am I legally entitled to a no-claims discount if I don't make claims?
- There is no legal right to a no-claims discount. It is a commercial practice that varies between different insurance providers. While many insurers offer discounts for claims-free periods, this is not mandated by law. You should check your specific policy terms to understand how your discount is calculated and whether it can be retained if you make a claim.