The Insurance Internal Appeal Process: What Happens and How to Win

The Insurance Internal Appeal Process: What Happens and How to Win

When your insurance claim is denied, the first step is almost always the internal appeal — a formal request to the insurer to reconsider its decision. But what actually happens inside the insurer when you submit an appeal? Who reviews it? What are they looking for? And how do you structure your appeal to give yourself the best possible chance of winning?

This guide pulls back the curtain on the internal appeal process and gives you the practical knowledge to make yours as effective as possible.

What Is an Internal Appeal?

An internal appeal (also called an internal review, formal complaint, or reconsideration request, depending on the country) is a request to the insurance company itself to review its initial claim decision. It is handled by the insurer — not by an independent body like FIDReC, FOS, or AFCA.

Internal appeals are:

• Free for the consumer (always)
• Required before most ombudsman services will accept your case
• Resolved more quickly than external processes (typically 14 to 45 days, depending on jurisdiction)
• Successful more often than people expect — many claim denials are overturned at the internal appeal stage

Do not treat the internal appeal as a formality. It is a genuine opportunity to change the outcome, and many cases are resolved here without the need for escalation.

Who Reviews Your Internal Appeal?

This is one of the most important things to understand about the internal appeal process. In most insurers, the initial claim decision is made by a frontline claims officer following internal guidelines and checklists. The internal appeal, however, is reviewed by a different, more senior person:

Claims team leader or senior claims officer: For routine appeals, a senior claims officer or team leader may review the file. They have authority to approve claims that were incorrectly denied by a frontline officer.

In-house medical advisor (for health and life claims): Many insurers have in-house medical advisers who review appeals involving medical necessity disputes. These are typically qualified doctors or nurses. If the initial denial was made by a non-medical claims officer, a medical appeal reviewer may take a different view when presented with strong clinical evidence.

Legal or compliance team: For complex or high-value appeals, the insurer's internal legal or compliance team may be involved, particularly where the policyholder has raised regulatory compliance concerns or cited specific legal provisions.

Ombudsman or Defensor (in countries with mandatory internal ombudsmen): In Germany, Colombia, Mexico, and some other markets, insurers are required by regulation to have an independent internal ombudsman (Versicherungsombudsmann, Defensor del Consumidor Financiero) who can review escalated complaints. This person has genuine independence from the commercial claims team.

What Reviewers Are Looking For

The internal appeal reviewer's job is to determine whether the initial decision was correct given the policy terms, the evidence, and applicable regulatory requirements. They are not looking for a reason to deny — they are looking at whether the denial was justified.

They will specifically examine:

Accuracy of the denial grounds: Did the denial correctly identify and apply the relevant policy clause? Was the exclusion actually applicable to the facts?

Completeness of the evidence review: Did the initial claims officer consider all the evidence? If you are providing new evidence in the appeal (medical records, expert reports, photographs), this can change the outcome.

Procedural compliance: Did the claims team follow internal procedures correctly? Were the correct checklists applied? Was the decision made within the required timeframe?

Regulatory compliance: Does the denial comply with applicable regulatory requirements? In the UK, for example, does it comply with FCA's ICOBS rules? In Singapore, does it comply with MAS's fair dealing guidelines?

Legal risk assessment: A sophisticated internal reviewer will also consider what happens if you escalate to an ombudsman or court. If the denial does not appear supportable, the reviewer may prefer to settle now rather than face a regulatory finding or court judgment.

How to Write an Effective Internal Appeal

Lead with the strongest argument first

The most common mistake in internal appeals is burying the best argument. Start with your strongest point. If the policy clearly covers your loss and the exclusion cited is ambiguous, say so in the first paragraph.

Address every denial ground

If the insurer cited three grounds for denial, address all three — even if you think one or two are minor. Leaving denial grounds unaddressed suggests you cannot refute them.

Provide new evidence where possible

The most successful internal appeals involve new evidence that the initial reviewer did not have. This might be:

• A detailed medical report from a specialist (more authoritative than a GP letter)
• An independent repair assessment or engineering report
• A statement from a witness
• Photographs or video evidence
• Published clinical guidelines or research supporting your position

Reference your policy precisely

Quote the specific policy clause(s) that entitle you to coverage. Show the reviewer exactly where in the contract your claim is supported. Vague assertions ("I'm sure I'm covered") are far less effective than specific references ("Clause 4.1(b) of the Policy provides coverage for [X], which clearly applies to my situation because [Y]").

Cite regulatory standards

Where relevant, reference the regulatory standards the insurer must meet:

• UK: FCA ICOBS (Insurance: Conduct of Business Sourcebook), DISP (Dispute Resolution)
• Singapore: MAS Fair Dealing Guidelines (FAA-G11), Insurance Act
• Australia: AFCA rules, Insurance Contracts Act 1984
• USA: ACA appeal rights, state insurance regulations
• Germany: VVG (Versicherungsvertragsgesetz), BaFin guidelines

State the consequence of failure to resolve

Inform the insurer of your right to escalate to the relevant ombudsman or regulatory body. This is not a threat — it is factual information that signals you are serious and have done your homework. It also triggers the insurer's own internal calculation about litigation and regulatory risk.

ClaimBack at claimback.app generates professional appeal letters that incorporate all of these elements — specific policy citations, regulatory references, evidence framework, and a clear escalation notice — tailored to your jurisdiction and claim type.

Internal Appeal Timelines by Country

Country	Required Response Time
Singapore	21 working days (MAS guideline)
UK	8 weeks (FCA DISP requirement)
Australia	45 calendar days (AFCA rules)
USA	30 days (urgent) / 60 days (standard) under ACA
Malaysia	14 working days (BNM guideline)
Germany	Reasonable time (VVG); typically 4–8 weeks
New Zealand	40 working days (standard)

If the insurer does not respond within the applicable timeframe, you can typically escalate directly to the ombudsman or regulatory body without further waiting.

What Evidence Has the Most Impact

High-impact evidence:

• Specialist medical reports addressing the specific denial grounds (for health/life claims)
• Independent professional reports (surveyors, engineers, loss adjusters)
• Published clinical guidelines from recognised bodies
• Expert opinions that directly contradict the insurer's stated basis for denial

Moderate-impact evidence:

• GP letters (useful but less authoritative than specialist reports)
• Photographs and video
• Repair estimates from multiple sources
• Your own detailed chronological account of events

Lower-impact evidence:

• General correspondence
• Character references
• News articles or social media evidence

When to Escalate: Recognising a Dead End

Not every internal appeal is resolved in your favour. Know when to move on. If you have received:

• A final internal decision upholding the denial with no new reasoning
• A response that ignores your evidence and arguments
• No response within the required timeframe

It is time to escalate to the external process — FIDReC (Singapore), FOS (UK), AFCA (Australia), your state's Department of Insurance (USA), or the equivalent body for your country. Do not submit multiple rounds of internal appeals if the insurer is clearly not going to change its position.

Conclusion

The internal appeal process is a genuine opportunity to reverse a claim denial — not just a procedural hoop to jump through. Understand who is reviewing your appeal, give them new evidence to work with, reference your policy precisely, and use regulatory standards to anchor your argument. A professionally structured appeal letter, generated by ClaimBack at claimback.app, can make the difference between a denial being overturned at this stage or a drawn-out escalation to an ombudsman or court.