Declined Motor Claims
GO!
help
Learning Objectives
We are going to cover:
- Systems Thinking & Consumer Duty
- Why we might decline a claim
- Considering a recovery from our customer
Click the headings above to jump to that section,or press on the right hand edge of the screen to start the module.
Assumed knowledge
This session builds on knowledge from:
EiC Motor Level 1, chapter 2 (Legislation)EiC Motor Level 1, chapter 7 (Legal Aspects & Negligence)
A good familiarity with motor fleet policy wordings will be helpful in this module.Afterwards, you may find the modules on Non-Disclosure & Misrepresentation and Waiver of use.
Systems Thinking
First, let's look briefly over some key concepts. Systems Thinking gives us the methodology and tools to investigate and make decisions promptly that feed into good customer outcomes. On every claim we should:
Tailor communication
Ask right and relevant questions and understand what matters to progress the claim
Pay the right amount to the right people, and settle at the right time
Systems Thinking does not mean that we simply pay every claim – this is incorrect. Why? Click here. We settle claims based on the promise of the insurance contract.
Consumer Duty
Secondly, Consumer Duty places obligations on us by our regulator. Click each picture below.
What are good outcomes?
Products & Services
An isolated good customer experience is not enough – what matters most is the customer outcome that they receive when dealing with us.
Hover over each of these headings for more information.
Customer Support
Customer Understanding
Price and Value
Declining a claim
With these things in mind, as soon as we believe there is no cover in place, we must inform the customer promptly and clearly. The customer will have questions. We must be ready for these and we should explain ourselves fully, backed up with our evidence. So why might we decide to decline a claim? Click each of the boxes to find out more.
Policy exclusion – click
Warranty breach – click
Uninsured driver – click
Use of vehicle – click
Declining a claim
All of those scenarios could mean that the customer's claim could be declined. When this happens, we need to do the following – click the images below.
Refer to a TAH or senior (if required)
Unless we can make an immediate decision, we should send a Reservation of Rights
A call to the customer made quickly, to advise them of the position
If we have to settle the third party claim, keep the claim open, otherwise, refer to the settlement guidelines
Refer customer to the section of the policy wording that supports our decision – back up in writing
Record the declinature of the claim and close the customer exposure
But...
Please be very careful here. If there is no cover in force because of a misrepresentation or non-disclosure, then we must not go down the route of declining the claim. We need to consider the validity of the contract as a whole. Why? If we decline a policy for misrepresentation or non-disclosure then we implicitly confirm the policy is valid. For further information, please refer to the modules in the EiC Motor Pathway on Non-Disclosure & Misrepresentation and Waiver.
Backing up our decision
If we decline a claim, we must provide a full explanation as soon as possible. Having talked it through over the phone, back it up in writing. Click each image below to explore in more detail.
Opportunity to discuss – click here
Keep them informed – click here
Customer has opportunity to discuss and understand the reasons
Meets our obligations to keep the customer fully informed at all points of the claim
Complaints – click here
The customer is less likely to complain if we've been wholly clear and given opportunity for questions
Consistency – click here
We make consistent decisions about how we apply the policy conditions
Getting paperwork signed
We will always need to consider any Road Traffic Act (RTA) obligations before a file is closed – even if we are declining the customer's claim. The RTA stipulates that an insurer's liability for innocent Third Party losses is not triggered until an unsatisifed judgment (CCJ) has been obtained against the driver. If this is a claim we are obliged to pay, then we can do one of two things – click each image in turn
From our customer we can obtain a signed Consent & Indemnity Form
Armed with either we have a right of recovery against our customer or driver
OR from the Third Party we can obtain a signed Conditional Assignment Form
Recovery – two key considerations
Declining a customer's claim may result in us considering recovering our losses from them. Before we do this, we should carry out a cost benefit analysis to see if it is worthwhile. This review will need to include two groups of considerations – click the images to learn more.
- If the customer/driver is not in a financial position to pay, there is little value in pursuing them (why?)
- Except for exceptional circumstances, we do not accept instalments to repay our outlay (why?)
- A charge against someone's property must be agreed by GHO Technical (why?)
- We must involve underwriters in the decision – there is a risk of damaging our business relationship if we pursue a recovery (why?)
- Similarly, we must also consider the broker relationship for the same reason (why?)
- Decisions not to pursue, or to accept a reduced sum, should be discussed and agreed with a TAH (why?)
Ex-gratia requests
When all (or part) of a claim falls outside the cover provided, the customer (or representative) may ask underwriters for an ex-gratia payment – they are asking for us to reconsider and pay the claim despite it not being covered. Ex-gratia means "done as a favour, not under compulsion, implying the absence of any legal obligation."
The lack of cover may arise for a variety of reasons, such as... click the images to learn more.
The customer selected restricted cover, either intentionally or by accident
The broker may have misunderstood the customer's requirements
The customer misunderstood something in the policy literature pre-inception
The cover requested may simply have not been available
The broker could have made a mistake while setting up the policy
Ex-gratia requests
We are not contractually or legally obliged to pay when the customer has consciously selected restricted cover, there has been an error or omission by the intermediary (broker), or there is clearly no cover in force with Allianz. Given that we will be certain of our facts when we have declined a claim, an ex-gratia request should, in the first instance, be refused. Click the images below to explore further.
IF the decision to decline the claim is made correctly
THEN this should be the end of the matter.
AND we have explained ourselves fully and correctly
Any request for an ex-gratia needs to come from the customer or broker of their own accord. We must not suggest an ex-gratia or encourage them to "make a problem go away."
Ex-gratia requests – underwriters
This is background information, and you do not need to remember this. When our underwriters receive an ex-gratia request, they will consider several things. Click the icons below to explore.
No appropriate cover available? No ex-gratia
Are all the relevant facts known?
Policy wording interpreted correctly?
Sympathy is not sufficient – must be a business reason
Has the policy been issued correctly?
Our position legally supportable? ("Keep It Legal")
Ex-gratia requests – underwriters
Our underwriters also need to carefully consider the following:
Anti-Corruption Policy – we must avoid even the appearance of impropriety
Broker error?We should ask them for a contribution
Threat of withdrawing business isn't grounds alone
Ex-gratia is a fixed sum of money, not a percentage or 'to be determined'
Considering ex-gratia? We must also consider any Conflict of Interest
If ex-gratia is granted then there is no negotiation over the amount
Any ex-gratia agreed will be net of VAT and the policy excess
Approval process
Final approval
Amount
Initial approval
Technical Claims; andRegional Underwriting Manager (or equivalent) or SME Underwriting Manager
Regional Manager (or equivalent) orHead of SME Underwriting
Up to £5,000
Head of Insurance (Claims); andRegional Underwriting Manager (or equiv) or Regional Manager (or equivalent) or SME Underwriting Manager
Up to £25,000
Head of Insurance (Underwriting)
Chief Distribution Officer; or Managing Director for Mid-Market, and Chief Underwriting Officer; or Director of Digital Trading & CUO (for SME requests)
Director of Technical Claims; andHead of Insurance (Underwriting)
£25,000 to £100,000
All ex-gratia requests exceeding £100,000 (and lower value requests where consensus view between Claims and Underwriting cannot be reached) must be signed off by Commercial Managing Director and and Chief Claims Officer
£100,000 and above
Correct as at 1 April 2026
Show You Know questions
In the final section of this module, we will look at some Show You Know questions. These can be a mixture of true/false, single option, multiple choice, and drag-and-drop style questions. If you answer a question incorrectly, the question will repeat until you select the correct answer. You will need to score 100% in order to complete the module. Move on to the next slide when you are ready.
Show You Know
Show You Know
Show You Know
Show You Know
Show You Know
Declined Motor Claims
You have now reached the end of this module. Just so you know, this module may take 24 hours to show as completed in Degreed.
Would you like to give us your feedback?Have you seen something that isn't quite right? Please click here and let us know.
To return to the beginning of the module, click the home button, otherwise close the window.
Can't pay?
If the customer genuinely cannot reimburse us (more likely with a retail customer), then continuing to pursue may cause:
- Foreseeable harm to the customer (by causing stress and upset) –
- A complaint to be received
- Potential for adverse publicity and reputational risk
Policy exclusion
Policy exclusion
Most sections of a motor policy have their own exclusions. The customer damage section excludes things like wear and tear, mechanical, electronic or computer failures. The Personal Effects section excludes money, equipment in connection with the business, etc. The policy also contains general exclusions which apply across the policy, such as damage due to earthquakes, riot, civil commotion, deliberate damage.
Not pursuing?
- If we elect not to pursue, or accept a reduced amount, then we should get this agreed with a TAH.
- If we miss this step, then our reasoning may not be clear, which risks leakage being attached to the claim.
Uninsured driver
Uninsured driver
The user/driver may be specifically excluded from cover by endorsement; this could be:
- A specified driver is completely excluded (no cover at all)
- Drivers under a certain age are not covered (e.g., under 21, 25, or 30)
Don't accept instalments
- It costs money to process instalments and add the necessary recoveries onto the claim.
- This reduces the amount we actually recover, even though the additional costs are invisible
- The claim remains open for significantly longer, potentially compromising the customer's renewal premium
Warranty breach
Warranty breach
The general conditions (warranties) must be complied with in order for the policy to be honoured. These include payment of the premium, and maintaining the vehicle in a roadworthy condition. However, a breach of a policy condition must be material to the loss if we are to consider declining the claim.
Example 1: The customer's brakes are not working. The driver collides with something because they could not stop. This is material to the loss, and the claim could be declined.
Example 2: The customer's brakes are not working. The vehicle is hit whilst parked by a Third Party. However the condition of the brakes is immaterial, so we could not decline the claim.
Charge on property
- A charging order secures a debt against a property, so if the property is sold or remortgaged, money from the sale will be taken to pay it off
- It can only be done after a CCJ has been entered against the customer
- It is potentially very serious; the court can order that a property is sold to pay the debt (order for sale). It can increase any financial difficulty that the customer may be in
- It costs money to have a charge attached to a property (court fee and our solicitors' costs)
- It can impact on their ability to trade as effectively
- The claim remains open for significantly longer, potentially compromising the customer's renewal premium
The customer we are dealing with will, no doubt, be very happy if we voluntarily cover a claim which should not be covered! Who wouldn't? The customer, when asked, will certainly feel like they have been treated fairly! However... Ask yourself two questions. If we were going to cover the claim anyway, then have we charged a fair premium? Are we being fair to other customers who may not receive this different experience?
As you explore the slides, you will see various clickable objects.Hover over them on the image below to learn what function each performs.
---- -- ... --- ...--
---- -- ... --- ...--
Involve underwriters
- We could be about to agree a renewal, or some kind of longer term deal, but pursuing a recovery against the customer might damage the relationship and put the renewal at risk
- There is almost always a bigger picture to consider!
Use of vehicle
Use of vehicle
The policy and certificate will state the allowed uses of the vehicle, for example:
Limitations as to Use: For social domestic and pleasure purposes and for the Policyholder's business or profession. The policy does not cover: Use for hire or reward, racing, reliability trials, speed testing in any competition irrespective of whether this take places on any race track or circuit, or motor trade purposes.
Broker relationship
- Brokers are extremely valuable customers, who sing our praises when we get things right, and defend us when we get things wrong.
- The broker can give us information that we might not already know
- We do not want a broker to threaten to take business elsewhere if we have not involved them properly
Declined Claims (2026 H1 refresh)
Allianz CTDT
Created on October 13, 2025
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Transcript
Declined Motor Claims
GO!
help
Learning Objectives
We are going to cover:
Click the headings above to jump to that section,or press on the right hand edge of the screen to start the module.
Assumed knowledge
This session builds on knowledge from:
EiC Motor Level 1, chapter 2 (Legislation)EiC Motor Level 1, chapter 7 (Legal Aspects & Negligence)
A good familiarity with motor fleet policy wordings will be helpful in this module.Afterwards, you may find the modules on Non-Disclosure & Misrepresentation and Waiver of use.
Systems Thinking
First, let's look briefly over some key concepts. Systems Thinking gives us the methodology and tools to investigate and make decisions promptly that feed into good customer outcomes. On every claim we should:
Tailor communication
Ask right and relevant questions and understand what matters to progress the claim
Pay the right amount to the right people, and settle at the right time
Systems Thinking does not mean that we simply pay every claim – this is incorrect. Why? Click here. We settle claims based on the promise of the insurance contract.
Consumer Duty
Secondly, Consumer Duty places obligations on us by our regulator. Click each picture below.
What are good outcomes?
Products & Services
An isolated good customer experience is not enough – what matters most is the customer outcome that they receive when dealing with us.
Hover over each of these headings for more information.
Customer Support
Customer Understanding
Price and Value
Declining a claim
With these things in mind, as soon as we believe there is no cover in place, we must inform the customer promptly and clearly. The customer will have questions. We must be ready for these and we should explain ourselves fully, backed up with our evidence. So why might we decide to decline a claim? Click each of the boxes to find out more.
Policy exclusion – click
Warranty breach – click
Uninsured driver – click
Use of vehicle – click
Declining a claim
All of those scenarios could mean that the customer's claim could be declined. When this happens, we need to do the following – click the images below.
Refer to a TAH or senior (if required)
Unless we can make an immediate decision, we should send a Reservation of Rights
A call to the customer made quickly, to advise them of the position
If we have to settle the third party claim, keep the claim open, otherwise, refer to the settlement guidelines
Refer customer to the section of the policy wording that supports our decision – back up in writing
Record the declinature of the claim and close the customer exposure
But...
Please be very careful here. If there is no cover in force because of a misrepresentation or non-disclosure, then we must not go down the route of declining the claim. We need to consider the validity of the contract as a whole. Why? If we decline a policy for misrepresentation or non-disclosure then we implicitly confirm the policy is valid. For further information, please refer to the modules in the EiC Motor Pathway on Non-Disclosure & Misrepresentation and Waiver.
Backing up our decision
If we decline a claim, we must provide a full explanation as soon as possible. Having talked it through over the phone, back it up in writing. Click each image below to explore in more detail.
Opportunity to discuss – click here
Keep them informed – click here
Customer has opportunity to discuss and understand the reasons
Meets our obligations to keep the customer fully informed at all points of the claim
Complaints – click here
The customer is less likely to complain if we've been wholly clear and given opportunity for questions
Consistency – click here
We make consistent decisions about how we apply the policy conditions
Getting paperwork signed
We will always need to consider any Road Traffic Act (RTA) obligations before a file is closed – even if we are declining the customer's claim. The RTA stipulates that an insurer's liability for innocent Third Party losses is not triggered until an unsatisifed judgment (CCJ) has been obtained against the driver. If this is a claim we are obliged to pay, then we can do one of two things – click each image in turn
From our customer we can obtain a signed Consent & Indemnity Form
Armed with either we have a right of recovery against our customer or driver
OR from the Third Party we can obtain a signed Conditional Assignment Form
Recovery – two key considerations
Declining a customer's claim may result in us considering recovering our losses from them. Before we do this, we should carry out a cost benefit analysis to see if it is worthwhile. This review will need to include two groups of considerations – click the images to learn more.
Ex-gratia requests
When all (or part) of a claim falls outside the cover provided, the customer (or representative) may ask underwriters for an ex-gratia payment – they are asking for us to reconsider and pay the claim despite it not being covered. Ex-gratia means "done as a favour, not under compulsion, implying the absence of any legal obligation."
The lack of cover may arise for a variety of reasons, such as... click the images to learn more.
The customer selected restricted cover, either intentionally or by accident
The broker may have misunderstood the customer's requirements
The customer misunderstood something in the policy literature pre-inception
The cover requested may simply have not been available
The broker could have made a mistake while setting up the policy
Ex-gratia requests
We are not contractually or legally obliged to pay when the customer has consciously selected restricted cover, there has been an error or omission by the intermediary (broker), or there is clearly no cover in force with Allianz. Given that we will be certain of our facts when we have declined a claim, an ex-gratia request should, in the first instance, be refused. Click the images below to explore further.
IF the decision to decline the claim is made correctly
THEN this should be the end of the matter.
AND we have explained ourselves fully and correctly
Any request for an ex-gratia needs to come from the customer or broker of their own accord. We must not suggest an ex-gratia or encourage them to "make a problem go away."
Ex-gratia requests – underwriters
This is background information, and you do not need to remember this. When our underwriters receive an ex-gratia request, they will consider several things. Click the icons below to explore.
No appropriate cover available? No ex-gratia
Are all the relevant facts known?
Policy wording interpreted correctly?
Sympathy is not sufficient – must be a business reason
Has the policy been issued correctly?
Our position legally supportable? ("Keep It Legal")
Ex-gratia requests – underwriters
Our underwriters also need to carefully consider the following:
Anti-Corruption Policy – we must avoid even the appearance of impropriety
Broker error?We should ask them for a contribution
Threat of withdrawing business isn't grounds alone
Ex-gratia is a fixed sum of money, not a percentage or 'to be determined'
Considering ex-gratia? We must also consider any Conflict of Interest
If ex-gratia is granted then there is no negotiation over the amount
Any ex-gratia agreed will be net of VAT and the policy excess
Approval process
Final approval
Amount
Initial approval
Technical Claims; andRegional Underwriting Manager (or equivalent) or SME Underwriting Manager
Regional Manager (or equivalent) orHead of SME Underwriting
Up to £5,000
Head of Insurance (Claims); andRegional Underwriting Manager (or equiv) or Regional Manager (or equivalent) or SME Underwriting Manager
Up to £25,000
Head of Insurance (Underwriting)
Chief Distribution Officer; or Managing Director for Mid-Market, and Chief Underwriting Officer; or Director of Digital Trading & CUO (for SME requests)
Director of Technical Claims; andHead of Insurance (Underwriting)
£25,000 to £100,000
All ex-gratia requests exceeding £100,000 (and lower value requests where consensus view between Claims and Underwriting cannot be reached) must be signed off by Commercial Managing Director and and Chief Claims Officer
£100,000 and above
Correct as at 1 April 2026
Show You Know questions
In the final section of this module, we will look at some Show You Know questions. These can be a mixture of true/false, single option, multiple choice, and drag-and-drop style questions. If you answer a question incorrectly, the question will repeat until you select the correct answer. You will need to score 100% in order to complete the module. Move on to the next slide when you are ready.
Show You Know
Show You Know
Show You Know
Show You Know
Show You Know
Declined Motor Claims
You have now reached the end of this module. Just so you know, this module may take 24 hours to show as completed in Degreed.
Would you like to give us your feedback?Have you seen something that isn't quite right? Please click here and let us know.
To return to the beginning of the module, click the home button, otherwise close the window.
Can't pay?
If the customer genuinely cannot reimburse us (more likely with a retail customer), then continuing to pursue may cause:
Policy exclusion
Policy exclusion
Most sections of a motor policy have their own exclusions. The customer damage section excludes things like wear and tear, mechanical, electronic or computer failures. The Personal Effects section excludes money, equipment in connection with the business, etc. The policy also contains general exclusions which apply across the policy, such as damage due to earthquakes, riot, civil commotion, deliberate damage.
Not pursuing?
Uninsured driver
Uninsured driver
The user/driver may be specifically excluded from cover by endorsement; this could be:
Don't accept instalments
Warranty breach
Warranty breach
The general conditions (warranties) must be complied with in order for the policy to be honoured. These include payment of the premium, and maintaining the vehicle in a roadworthy condition. However, a breach of a policy condition must be material to the loss if we are to consider declining the claim.
Example 1: The customer's brakes are not working. The driver collides with something because they could not stop. This is material to the loss, and the claim could be declined.
Example 2: The customer's brakes are not working. The vehicle is hit whilst parked by a Third Party. However the condition of the brakes is immaterial, so we could not decline the claim.
Charge on property
The customer we are dealing with will, no doubt, be very happy if we voluntarily cover a claim which should not be covered! Who wouldn't? The customer, when asked, will certainly feel like they have been treated fairly! However... Ask yourself two questions. If we were going to cover the claim anyway, then have we charged a fair premium? Are we being fair to other customers who may not receive this different experience?
As you explore the slides, you will see various clickable objects.Hover over them on the image below to learn what function each performs.
---- -- ... --- ...--
---- -- ... --- ...--
Involve underwriters
Use of vehicle
Use of vehicle
The policy and certificate will state the allowed uses of the vehicle, for example:
Limitations as to Use: For social domestic and pleasure purposes and for the Policyholder's business or profession. The policy does not cover: Use for hire or reward, racing, reliability trials, speed testing in any competition irrespective of whether this take places on any race track or circuit, or motor trade purposes.
Broker relationship