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Top three reasons for which the legal insurance company rejects your claim

1. Lack of prospects of success

After analyzing your case, if the legal insurance company believes there are no chances of success, they reject your case.

2. The legal costs are way more than the desired outcome.

Suppose you received a 50€ fine from the local municipality. You think the fine is unjustified and want to sue the municipality. In this case, the legal insurance company may reject the case as the legal costs are much more than the fine you want to avoid.

In such situations, you shouldn't say that you want to sue the municipality to avoid paying the fine. You should say that you want to dispel the municipality's accusation of misconduct.

3. The dispute arose before taking the legal insurance.

This is a classic, and most rejected claims fall in this category.

Suppose you want to sue your private health insurance company for the increased premium from 2018 to 2023. But you took the legal insurance in 2020.

In this case, the legal insurance provider may refuse to pay the legal costs, stating that the dispute arose before taking the legal insurance.

What can you do if your insurance provider rejects your claim?

Legal or any insurance providers may refuse your claim in many situations. But you shouldn't just accept them.

There are several ways to claim your right if you feel the rejection is unjustified.

Get free advice from an insurance ombudsman​

The Insurance Ombudsman is the independent arbitration board for consumers in insurance matters. It is responsible for settling disputes between policyholders and insurers neutrally in accordance with the law.

If the dispute value is under 10,000 €, the insurance company must comply with the ombudsman’s decision.

The ombudsman can only make a recommendation for the dispute value between 10,000 € and 100,000 €. It’s up to you and the insurer to accept it.

Sue, the insurance company

If you are not satisfied with the insurance ombudsman's decision, you can always sue the insurance company.

File a complaint with Verbraucherzentrale

Verbraucherzentrale is a central body that takes care of the customers' complaints. They can guide you about your rights and how to proceed in a particular matter.

Verbraucherzentrale can even initiate legal proceedings against the insurer on behalf of consumers if there is evidence of widespread misconduct or violations of consumer protection laws.

So, you should always file the complaint, irrespective of the outcome.

File a complaint with BaFin

Like Verbraucherzentrale, you can also submit the complaint to BaFin. BaFin is a public institution that supervises banks, insurance companies, and brokers in Germany.

Insurance companies are legally required to have an internal complaints-handling system. The insurance provider must provide a written response to each consumer complaint.

If unsatisfied with the insurer's response, you can file the complaint to BaFin.

BaFin analyzes all customer complaints to identify recurring issues. BaFin uses this data to revise policies and address issues with the insurance companies.

A recent example is the customer complaints against Postbank. There were so many complaints that BaFin stepped in and gave the bank a deadline to fix their customer service infrastructure or face a hefty fine.

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