Insurance Claim Denied: How to Appeal, Ombudsman and BaFin

A letter from your insurer says it will not pay, or only pay part of the claim. That is frustrating, and it is rarely the final word. Denials often rest on a clause that does not fit your case, on a warning the insurer never gave you or on documents that simply had not arrived yet. This guide shows you how to check the denial, what a reasoned appeal looks like, when the ombudsman or BaFin can help and which deadlines you need to know in Germany. It comes with an AI prompt that helps you write the letter in German.

Why insurers deny claims

Before you reply, you need to understand what the insurer is relying on. Most denials and cuts come down to one of these reasons:

• Not an insured event: In the insurer's view the loss or illness is outside the scope of cover, for example heavy rain damage without the natural hazards add-on.
• Exclusion: The policy conditions exclude exactly this case, such as intent, certain sports or wear and tear.
• Waiting period: The event happened before full cover started. This mainly affects legal protection, dental and health insurance.
• Breach of an obligation (§ 28 VVG): The insurer says you reported too late, gave wrong information or did not limit the damage.
• Gross negligence (§ 81 VVG): The insurer cuts the payout because you allegedly caused the loss through gross negligence, for example by leaving a candle burning in an empty room.
• Non-disclosure (§ 19 VVG): Health or risk questions in the application were allegedly answered incorrectly. This often leads to withdrawal from the whole contract, typically in disability and health insurance.
• Underinsurance (§ 75 VVG): The sum insured is too low, so the insurer only pays a proportion.

Check the denial

Put the letter next to your policy conditions, in the version that applied when you took out the policy. Check whether the clause the insurer quotes is actually in there and whether it fits your case. Insurers sometimes quote standard model conditions that are not part of your tariff or apply in a weaker form. If you are missing documents, ask for them. Under § 3(4) VVG you can request copies of the statements you made about the contract at any time, including your application with the health questions.

For some reasons it pays to look closely, because German law sets hurdles for the insurer:

• Obligations: In cases of gross negligence the insurer may only reduce the payout, not refuse it entirely. If your mistake had no influence on the loss or its extent, it has to pay in full (§ 28(3) VVG), unless you acted fraudulently. If it says you answered a question about the loss incorrectly, it must have warned you about the consequences separately and in text form beforehand (§ 28(4) VVG).
• Withdrawal over health questions: The insurer must have warned you in the application, in text form, about the consequences of wrong answers (§ 19(5) VVG). It has only one month to withdraw after learning about the breach (§ 21(1) VVG). After five years withdrawal is ruled out, after ten years in cases of intent or fraud (§ 21(3) VVG). If you answered wrongly through slight negligence or without fault, it may not withdraw at all.
• Reduction rate: If the insurer cuts the payout instead of denying it, it has to justify the size of the cut. You do not have to accept a flat 50 % reduction without reasons.

Sometimes the mistake is on your side. It is better to find that out now than to spend months on a dispute you cannot win. An honest check works in both directions.

The appeal: factual and point by point

Private insurers in Germany have no formal appeal procedure like public authorities do. Your appeal (in German usually called „Widerspruch“) is a letter in which you object to the decision with reasons and ask the insurer to review it. There is no fixed deadline, but reply within a few weeks while everything is still fresh. Public health insurance works differently: you have one month to object to a formal decision (§ 84 SGG), after that it becomes final.

A good appeal includes your policy number and claim number and refers to the denial letter by its date. Then you go through each of the insurer's reasons one by one and explain why it does not hold in your view. You name new evidence specifically and enclose it, for example a medical certificate, photos or an invoice that was missing. At the end you ask for a new review and set a reasonable deadline, usually two to three weeks. Send the letter in a way that lets you prove it arrived, and feel free to address it to the complaints department (Beschwerdemanagement). That team looks at the case with fresh eyes.

Keep it calm. Accusations, capital letters and threats do not help. The claims handler reading your letter has to explain to a manager why the denial does not stand. Make that easy for them.

Writing the appeal with AI

An AI such as ChatGPT, Claude or Gemini can help you turn your frustration into a clear letter, and it can write it in German for you. The prompt below makes the AI ask for missing details first, work only with your facts and not invent laws or court rulings. Copy it, paste in the text of the denial letter without personal data and add your notes.

You are helping me write an appeal against my German insurance company's decision to deny or reduce a claim.

Type of insurance: [e.g. household contents, disability, legal protection]
Text of the denial letter (without name, address, policy number): [paste here]
Relevant parts of my policy conditions, if available: [paste here]
My view and my evidence: [Why do I think the denial is wrong? Which documents can I provide, including new ones?]

Follow these rules:
1. First summarise in two or three sentences the reasons the insurer gives for the denial. Then ask me about anything missing for the appeal, and only write the letter once I have answered.
2. In the letter, go through each reason for the denial separately and set my arguments and evidence against it.
3. Work only with the facts I give you. Do not invent, exaggerate or leave out anything that speaks against me and appears in the insurer's letter.
4. Do not cite any laws, court rulings or case numbers that are not in my documents. If you think a legal basis is relevant, add it as a note below the letter so I can check it myself.
5. At the end, ask for a new review by the complaints department (Beschwerdemanagement) and set a deadline of [e.g. three weeks]. No threats.
6. Use placeholders such as [NAME], [ADDRESS], [POLICY NUMBER] and [CLAIM NUMBER] instead of real data. Mention health details only as generally as I give them to you.
7. Add a list of enclosures at the end.
8. Write plainly and naturally, the way a person writes a factual letter. No set phrases, no filler, no outrage and no typical AI wording.
9. Do not use dashes (neither en dash nor em dash). Separate thoughts with a comma, a full stop or a new sentence.
10. Write the letter in German. Below it, add an English translation so I can check the content.

To make sure the letter actually helps you, keep these points in mind:

• Keep personal data out: Black out your name, address, policy and claim number before you paste the denial letter into the chat. Do not give the AI diagnoses or medical findings, write something general like „back condition“. Add the real details to the finished text yourself.
• No invented rulings: AI models like to quote court decisions that do not exist in that form. A wrong case number is spotted immediately and costs you credibility. Only use what you have checked yourself.
• Check every sentence: You sign the letter, not the AI. Use the English translation to check the German text, and delete anything that is wrong or that you did not say.
• Not legal advice: The AI writes. It cannot reliably judge whether your arguments hold up legally. For large amounts, disability pensions or a withdrawal from your contract, the case belongs with a specialist lawyer for insurance law (Fachanwalt für Versicherungsrecht).

How to write the first claim report so that a denial is less likely in the first place is covered in the guide How to file an insurance claim.

The ombudsman: free and often faster than a court

If the insurer sticks to its decision, you can turn to an arbitration body. For most types of insurance, such as household contents, liability, car, legal protection, life and disability insurance, that is the Versicherungsombudsmann e. V. The procedure is free for you, you only pay your own costs such as postage. Complaints are possible up to a value of 100,000 euros. Up to 10,000 euros the decision is binding on the insurer but not on you: if you disagree, you can still go to court afterwards. You must be a consumer, claim your own rights under the contract, and your insurer must be a member of the association. Almost all large insurers are.

For private health insurance, compulsory private long-term care insurance and supplementary health policies, the Ombudsman for Private Health and Long-Term Care Insurance is responsible. It is also free but only issues recommendations that the insurer does not have to follow. In practice many insurers follow them anyway. Both bodies work in German, so prepare your complaint in German as well.

Both are recognised consumer arbitration bodies. While the procedure is running, the limitation period for your claim is suspended (§ 204(1) no. 4 BGB). You must have complained to the insurer itself first, and the appeal from the previous section does exactly that. Enclose the denial letter, your appeal and the insurer's reply with your complaint.

BaFin: supervisor, not referee

The Federal Financial Supervisory Authority (BaFin) supervises insurers in Germany. A complaint is free and can be filed online. BaFin then asks the insurer for a statement and checks whether it complied with the law and the policy conditions. It cannot decide your individual case or enforce payment for you. A BaFin complaint also does not stop any deadlines, the limitation period keeps running.

BaFin is most useful when the insurer does not respond at all, drags out the processing for months or when you suspect a more general problem. For the dispute about your money, the ombudsman is usually the better route. You can use both at the same time.

Limitation period and going to court

Claims under an insurance contract become time-barred after three years (§§ 195, 199 BGB). The period starts at the end of the year in which the claim arose and you knew about it. A claim from 2026 therefore generally becomes time-barred at the end of 31 December 2029. While the insurer reviews your claim, the limitation period is suspended under § 15 VVG until you receive its decision in text form. That time is added to the three years.

If arbitration does not help, the last option is a lawsuit. You can sue the insurer at the court where you live (§ 215 VVG), so you do not have to travel to its head office. Legal protection insurance with contract cover pays the costs if it was already in place before the dispute arose and the waiting period had passed. Why that waiting period causes problems so often is explained in the guide on the legal protection waiting period trap. Without legal protection, book an initial consultation with a specialist insurance lawyer before you sue, so you can judge the cost risk.

If your policy is managed by me

Then send me the denial letter before you reply, via WhatsApp, email or the simplr app. As an insurance broker I represent your interests, not the insurer's. I look at which clause the denial is based on and tell you honestly whether I think an appeal has a chance, in English or German.

For disputed cases I can bring in the claims service of Maxpool. Maxpool is the broker pool I work with. Its claims service reviews denials, cuts and delayed processing with its own claims specialists and deals with the insurer with the weight of a large broker pool behind it. It costs you nothing. Nobody can promise a particular outcome, but you do not face the insurer on your own.

The service only covers policies managed by me, meaning policies you took out through me or transferred into my care. It is best to transfer your policies before the next dispute comes up. If you would like to do that, get in touch. The policies themselves stay exactly as they are, premium and conditions included.