Insurance Complaint Letter — Rejected or Underpaid Claim

By the eLitigant Editorial Team · Reviewed for current forms, fees & procedure · How we check our guides

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Last reviewed: June 2026 · For use in England & Wales · eLitigant is a Community Interest Company (No. 16566612), not a law firm. Always check the current official form on GOV.UK before you file, and sign the statement of truth yourself.

What this letter is and when to use it

An insurance complaint letter is a formal written complaint to your insurer about how it has handled a claim — most commonly because the claim has been rejected (declined) or because the amount offered is, in your view, too low (an underpaid or under-settled claim). It applies to most regulated general insurance: home, motor, travel, pet, gadget, buildings and contents, and similar policies.

You should send this letter once the insurer has given you a decision you disagree with. It is the first formal step, and it matters: under the Financial Conduct Authority’s complaint-handling rules (the DISP sourcebook in the FCA Handbook), the insurer must investigate a complaint and send you a final response, normally within 8 weeks of receiving it (DISP 1.6). You generally must complain to the insurer first before the Financial Ombudsman Service will look at the matter.

What to put in the letter

A clear, factual letter is far more effective than an angry one. Include:

• Your details and references — name, address, the policy number and the claim reference number.
• The heading “Complaint” — say plainly that this is a formal complaint so the insurer logs it under its complaints procedure.
• What happened — a short, dated chronology: when you bought the policy, when the loss or incident occurred, when you claimed, and what the insurer decided.
• Why you think the decision is wrong — for a rejection, address the specific reason given (for example a policy exclusion, alleged non-disclosure, or “wear and tear”) and explain why it does not apply. For an underpayment, explain how you arrive at the correct figure and attach evidence (quotes, invoices, receipts, valuations, photographs).
• The outcome you want — for example, that the claim be accepted and paid in full, or the settlement increased to a stated amount, plus interest and any out-of-pocket costs.
• A reasonable deadline and a reference to your right to go to the Financial Ombudsman Service if the matter is not resolved.

Keep copies of everything and send the letter by a method you can prove (recorded delivery or email with a read receipt).

Escalating to the Financial Ombudsman Service

The Financial Ombudsman Service is a free, independent body that settles disputes between consumers (and many small businesses) and financial firms, including insurers. You can take your complaint to the Ombudsman if either:

• you have received the insurer’s final response and are still unhappy; or
• 8 weeks have passed since you complained and the insurer has not sent a final response.

There are time limits. You normally have 6 months from the date of the insurer’s final response to refer the matter to the Ombudsman — the final response should tell you this. Separately, the Ombudsman can usually only consider a complaint made within 6 years of the event complained about, or — if later — within 3 years of when you knew, or ought reasonably to have known, that you had cause to complain.

If the Ombudsman upholds your complaint it can tell the insurer to put things right and pay compensation. For complaints referred on or after 1 April 2026 (about acts or omissions on or after 1 April 2019), the maximum award is £455,000; an Ombudsman decision that you accept is binding on the insurer. Using the Ombudsman does not stop you taking court action instead, but you cannot usually pursue both at once.

Common mistakes to avoid

• Skipping the insurer’s complaints stage. Go to the insurer first — the Ombudsman will normally expect this before it gets involved.
• Not labelling it a complaint. A vague “I’m not happy” email may be treated as a general query, which does not start the 8-week clock.
• Leaving out evidence. Attach the documents that prove your loss and its value; assertions alone rarely move an insurer.
• Making threats you cannot justify. Stick to facts and your lawful rights; avoid abusive or exaggerated language.
• Missing the deadlines. Diarise the 6-month referral window from the final response.

This guide is general information, not legal advice on your individual circumstances. eLitigant is not a law firm; we draft the document and you check, sign and send it.

Frequently asked questions

Does it cost anything to complain? No. Complaining to your insurer is free, and the Financial Ombudsman Service is also free for consumers. You do not need to pay a claims-management company or solicitor to do this for you.

How long does the insurer have to reply? Under the FCA’s DISP rules it must normally send a final response within 8 weeks of receiving your complaint. If it does not, or you disagree with its response, you can go to the Ombudsman.

What if my policy is a business policy? Many small businesses (broadly, micro-enterprises and small businesses meeting the FCA’s eligibility criteria) can also use the Financial Ombudsman Service. The same complain-first-then-escalate process applies; check the eligibility rules on the Ombudsman’s website.

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