The Insurance Company Rejected Your Claim: What to Check and How to Proceed

Read the Rejection Letter Against the Policy

An insurance company that rejects a claim must give its reasons in writing. The first step is to compare the stated reason with the wording of the policy: does the clause the company relies on really apply, does the event fall within the definition of the insured event, and is the exclusion clearly worded. When a policy clause can be read in more than one way, the reading that goes against the drafter, that is, the insurance company, is generally preferred.

The common grounds for rejection are an exclusion in the policy, a claim that the insured event was not proven, a pre-existing medical condition, non-disclosure when joining, late notice to the company and missing documents. Each ground calls for a different response, so the starting point is the exact wording of the letter.

Non-Disclosure and Pre-Existing Conditions

A common argument, especially in health, life and disability insurance, is that the insured did not disclose information when joining. Under the Insurance Contract Law, 5741-1981, the duty of disclosure applies to questions the company put in writing before the contract was made, on matters that could affect a reasonable insurer's willingness to insure. So the first check is what exactly you were asked on the application form and what you answered.

Even where an answer was incomplete, the rule is not rejection of the whole claim but a reduced payment, in proportion to the premium paid compared with the premium that would have been charged had the information been disclosed. A full exemption is possible only where the answer was given with intent to defraud, or where a reasonable insurer would not have insured at all had it known the true situation. There are also situations in which the company cannot rely on the non-disclosure, for example where it knew the true situation.

Limitation: Three Years, Sometimes Five

Under section 31 of the Insurance Contract Law, a claim for insurance benefits is generally time-barred three years from the day the insured event occurred, not seven years as in most civil claims. For life insurance, illness and hospitalization insurance and long-term care insurance policies purchased or renewed from late November 2020, the period is five years.

Submitting the claim to the insurance company does not stop the limitation clock. Only filing a claim in court stops it. A long review by the company can use up much of the period, so the deadline is tracked from day one.

How to Proceed After a Rejection

Ask the insurance company for all the documents: the full policy, the application form you signed, and the reports of its assessor or physician. Then respond in writing to the grounds for rejection, sometimes with a counter-opinion from a physician, an assessor or an engineer. A complaint can also be filed with the Capital Market, Insurance and Savings Authority, alongside tracking the limitation deadline.

Under the Insurance Contract Law, insurance benefits must be paid within 30 days of the day the company had the information and documents needed to clarify its liability. If the company maintains its position, a claim is filed in court. Where benefits were withheld without justification, the court may also award special interest.

Rejected Insurance Claims throughout Israel

The firm represents clients from all over Israel: Jerusalem and the Shfela, Be'er Sheva, Ashdod and Ashkelon, Haifa and the North, the Sharon and Gush Dan. Meetings take place at our two Modiin branches, at the WE Towers branch in Tel Aviv or by video call, and documents can be sent in advance on WhatsApp. We represent clients in the courts, the Labor Courts and before planning committees throughout Israel. How we work with clients across Israel.

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