Insurance rejects claim - How to lodge an objection

You’ve made a claim, but your insurer is refusing to settle it or is reducing the payout. That’s frustrating — but it’s no reason to give up. In many cases, you can successfully challenge the insurer’s decision. This guide shows you the right steps to take.

Why do insurance companies refuse to pay out?

Insurance companies are commercial enterprises and scrutinise every claim closely. Common reasons for rejection include:

Not every claim rejection is justified. Insurance terms and conditions are often complex and open to interpretation. It is therefore worth examining the grounds for rejection carefully.

Step 1: Examine the rejection letter carefully

Request a written explanation if you have not already received one. Check:

• Which clause in the policy is the insurer referring to?
• Is the stated ground for exclusion actually applicable to your case?
• Has the insurance company taken all relevant circumstances into account?

Compare the reasons given with your insurance terms and conditions (AVB). Under Section 305c(2) of the German Civil Code (BGB), unclear or ambiguous clauses are to the detriment of the insurance company — not to your detriment.

Step 2: Lodge an objection

If you disagree with the rejection, lodge a written objection. Please note:

Form: An informal letter is sufficient. Send it by registered post with proof of delivery or by email with read receipt.

Deadline: Respond within two to four weeks of receiving the rejection, if possible. There is no statutory deadline for lodging an objection in claims settlement, but it is advisable to act promptly.

Content: Describe the facts of the case from your perspective, refute the grounds for rejection and enclose relevant documents (photos, invoices, medical reports, expert opinions).

Step 3: Involve the Insurance Ombudsman

If the insurance company rejects your appeal again, you can contact the Insurance Ombudsman. This procedure is free of charge for policyholders.

The Ombudsman examines the case impartially and may issue a decision that is binding on the insurance company. You still retain the right to take legal action.

The Insurance Ombudsman is not responsible for disputes with private health insurance companies — there is a separate Private Health Insurance Ombudsman for this.

Step 4: Legal action in the civil court

If neither an appeal nor the Ombudsman leads to a successful outcome, the only option remaining is to bring a claim before the civil court.

Limitation period: Claims arising from the insurance contract become time-barred after three years (Section 195 of the German Civil Code). The period begins at the end of the year in which the claim arose and you became aware of the rejection.

Costs: Court and legal fees depend on the value of the claim. Anyone with legal expenses insurance should obtain a confirmation of cover in advance.

Burden of proof: As a rule, the policyholder must prove that an insured event has occurred. The insurer must prove that there is an exclusion or a breach of obligation.

Common pitfalls in claims settlement

Late notification of a claim: Many insurance policies stipulate deadlines for reporting a claim. If the claim is reported too late, the insurer may reduce or refuse the payout.

Incomplete documentation: Missing photos, receipts or quotes make settlement more difficult. Document every claim immediately and comprehensively.

Premature repairs: With some insurance policies — particularly building and comprehensive insurance — you must allow the insurer to assess the damage before you carry out repairs.

Signing a settlement agreement: If the insurer offers a settlement payment and requires you to waive further claims in return, examine the offer carefully. Such a waiver is usually final.

Frequently Asked Questions (FAQ)

What can I do if my insurance company won’t pay?

Check the reasons for the refusal, lodge a written objection and, if necessary, involve the Insurance Ombudsman. As a last resort, you can take legal action.

How long do I have to challenge a rejection?

The statutory limitation period is three years. However, you should respond as soon as possible — both to safeguard your rights and to make it easier to preserve evidence.

Does the Insurance Ombudsman cost anything?

No. The procedure is completely free of charge for policyholders. The Ombudsman is funded by the insurance industry.

Can I take legal action against the insurance company if the Ombudsman does not help?

Yes. The Ombudsman procedure does not preclude legal action. You can still take the matter to the civil courts afterwards.

Do I need to hire a solicitor?

Not strictly necessary for the appeal and the Ombudsman procedure. Legal representation is mandatory for a claim before the Regional Court (where the amount in dispute is €5,000 or more). Even before that, legal support can significantly increase your chances of success.

Who has to prove what?

You must prove that an insured event has occurred. The insurance company must prove that there is a ground for exclusion or a breach of obligation.

This article is for general information purposes only and does not replace individual legal advice. Every insurance claim is different — if you have specific questions, we recommend seeking legal assistance at an early stage.