Insurance isn't designed to cover you for predictable events such as having a heart attack when you already have heart disease. Nor will it cover you if you fail to look after your belongings adequately — such as leaving your camera in full view in an unlocked car.
You may also have taken out a budget policy that doesn't cover all eventualities. Or you may have failed to declare all material facts to the insurer.
Had the underwriters known the truth the insurer might not have offered cover in the first place and can cancel your policy retrospectively.
Use a broker
These intermediaries can liaise with the insurance company on your behalf, says Susan Taylor, chief executive officer of Financial Services Complaints Limited (FSCL), one of two complaints resolution services that handle insurance claims.
If there is an issue, the broker should go in to bat for you and can get a claim over the line that might otherwise be declined.
Keep it in writing
Karen Stevens, chief executive of complaints resolution service the Insurance & Financial Services Ombudsman, says after you have checked your policy and have the evidence you need you should make a formal complaint in writing to your insurer.
If you're handling the claim yourself keep everything in writing or record your own calls. I experienced a situation where the call in which I asked permission to use a particular osteopath was "lost" and the claim declined because I had allegedly gone to an unapproved provider for my treatment.
Eventually the company relented. It would have been easier if I'd recorded the call myself.
Don't take "no" for an answer
Providing the policy does cover you or the claim is in a grey area, keep up the pressure on the insurance company.
Post on social media. Insurance companies hate being portrayed as the bad guys. I noticed at the height of Youi Insurance's mis-selling issue, that customers who failed to accept the initial fob-off and kept posting on its Facebook page had their claim paid.
Youi was fined $320,000 after pleading guilty to charges relating to misleading sales techniques.
Check the Fair Insurance Code
The code sets out time frames within which insurers must deal with your claim or complaint, says Taylor.
"You can also make a complaint about an insurer's service, if you feel the insurer is unnecessarily delaying the processing of your claim," she says.
Ask for 'ex gratia'
Many insurance companies will pay out a problematic claim on a goodwill basis. Sometimes the claim is borderline and the company is erring on the side of caution, or it will cost less in the long run to pay the claim.
Get a letter of deadlock
If you've tried all angles with the insurance company's internal complaints staff, you need to get what's called a "letter of deadlock", which allows you to take the next step and have your case heard by an independent dispute resolution service.
Your insurance company must by law belong to such as service. They employ legally trained staff and will seek third party opinions to ensure a claim is handled fairly and independently. The dispute resolution services have a limit of $200,000 plus GST on the size of claim they can consider.
Go to the big guns
Insurance companies must accept the decision by the complaints resolution service as full and final settlement, but policyholders can go to the District Court if they do not agree with the assessment or if their claim is over $200,000.
Insurance lawyers have won some big settlements for their customers — but, be warned, this can come with big costs.
There are cases in which people aren't covered where it's patently unfair. When that happens, insurance companies often update their policy wording to make it fairer.
For example, after the Christchurch earthquakes, a number of businesses found they had no cover for business interruption insurance because their businesses were behind the cordon rather than damaged.
As a result these policies now typically cover for loss of access to a business not only because of physical damage.
