A rejected insurance claim usually arrives as a phone call or a two-line message: the claim is not payable. No clause, no reasoning, no signature. Policyholders treat that as the end of the matter. It is the beginning of it, and the first move is always the same.
Step one: get the repudiation in writing
Write to the insurer and ask for the decision on letterhead, stating the exact clause or condition of the policy relied on and the facts said to bring your claim within it. Do this by email so the request and the date are recorded.
This single request does more work than anything else in the process. An insurer that has to identify the clause in writing frequently discovers there is not one, or that the clause does not say what the claims officer believed. And if the claim does go to a tribunal or an ombudsman, a repudiation that was never explained in writing is a poor starting position for the insurer.
Step two: read the policy, not the brochure
Get the complete policy document — the schedule, the standard conditions, every endorsement and the proposal form you signed. Then check what the insurer is actually alleging. Almost every rejection falls into one of these:
- Non-disclosure of a material fact. An insurance contract is one of uberrimae fidei — utmost good faith — and a material fact not disclosed at proposal stage can void the policy. The questions to ask: was the fact really material to the risk, was it actually asked about in the proposal form, and did the insurer know it anyway?
- An exclusion. Check that the exclusion covers your facts precisely. Exclusions are construed strictly, and ambiguity in a document the insurer drafted is generally resolved against the insurer.
- Breach of a condition — late notification, failure to preserve the damaged property, unauthorised repairs. Whether a breach defeats the whole claim depends on whether the term was a condition precedent to liability, and on whether the breach actually prejudiced the insurer.
- Lapse for non-payment of premium, where the question is whether the grace period had expired and whether a lapse notice was given.
- Quantum — the claim is accepted but the amount is disputed. Different problem, different evidence: this is a valuation and surveyor question, not a liability one.
Step three: the insurer's own grievance channel
Every insurer is required to have a complaints function. Use it, in writing, with a short and factual letter: policy number, date of loss, date of intimation, what was claimed, what was rejected, why the rejection is wrong, and what you want. Attach the documents rather than describing them. Set a reasonable deadline and say what you will do when it passes.
Keep the tone flat. The letter you send here is the letter that a tribunal reads first, and an angry one helps the insurer more than it helps you.
Step four: outside escalation
When the insurer will not move, there are several external routes under the Insurance Ordinance, 2000, and choosing the right one matters more than choosing the loudest one:
- The Federal Insurance Ombudsman. The forum for maladministration by an insurer — unreasonable delay, arbitrary rejection, failure to respond. It is free, it does not require a lawyer, and it is the right first stop for most individual policyholders.
- The Small Disputes Resolution Committee. A quick statutory forum for smaller claims, constituted under the Ordinance to dispose of them without full litigation.
- The Insurance Tribunal. The specialist court for insurance disputes, headed by a judge, for claims beyond the small-dispute limit. This is where a serious contested repudiation ends up.
- The SECP's Insurance Division, which regulates insurers and takes complaints about conduct, as distinct from deciding your claim.
Health and motor claims sold through a bank may also engage the Banking Mohtasib where the bank's own conduct in selling or administering the policy is part of the problem.
Building the file that wins
- The complete policy, including the proposal form — because most non-disclosure defences collapse on what the form actually asked.
- Proof of premium payment up to the date of loss.
- Proof of intimation and its date — email, courier receipt, the insurer's acknowledgement.
- The loss evidence: FIR for theft, medico-legal or hospital records for health and accident, the surveyor's report, photographs, invoices, repair estimates.
- The full correspondence, in date order.
- The written repudiation with its clause.
Where the insurer relies on a surveyor's report, ask for a copy. You are entitled to know the basis of the assessment, and a report you have never seen cannot be answered.
Two things to watch
- Limitation. A claim on a policy is a contractual claim with a limitation period running from repudiation. Policies also often contain their own time bar for bringing proceedings. Do not let a long correspondence run the clock out — escalate formally while the time is alive.
- Full-and-final settlements. An offer at a fraction of the claim, tendered with a discharge voucher, is standard practice. Signing it generally ends the matter. If you accept under protest, say so in writing before you bank the cheque, not afterwards.
This article describes general insurance dispute procedure in Pakistan and is not advice on any particular claim. Which forum is open to you, and whether a repudiation is sustainable, depend on the wording of your policy, the sum involved and the facts of the loss. Consult an advocate before accepting a settlement or allowing a limitation period to expire.