Reasons for Rejection of Car Insurance Claims and Prevention Tips
Updated On Oct 15, 2023
Everybody who owns a vehicle has a car insurance policy in India. A mandatory requirement in the country is to get a legitimate car insurance policy for third party risk protection. Besides, by paying for comprehensive car insurance, you will even have damages on your car insured, provided you claim the damages from the car insurance provider. However, not all the claims that an insurance provider receives are accepted.
When you raise a claim for your car damages with your insurer, you expect that your insurer instantly compensates for the damages. Whenever you make a claim, three things would happen. Your claim may be approved, extra information may be sought by your car insurer or your claim may be rejected.
Reasons for Car Insurance Claim Rejection
Some of the common causes why car insurance provider can reject your claim
- Driver Related Problems: Driving without a driving license or underage driving or driving under the influence of drugs/alcohol are the common reasons for claim denial by your car insurance provider. Such actions are against the rules and, thus, by the time of the claim, the insured will not do anything.
- Lapsed Coverage: Whether it is made against an accident that happened after the policy duration has expired, insurance providers should not honor any demand. Renewing the insurance policy each year before it expires is imperative.
- Breach of Coverage Criteria: You must advise the insurer of the intent and use of the vehicle before purchasing car insurance. If you have told the insurance provider that the vehicle is meant for personal use, no claim can be made if the vehicle is used for commercial uses and that claim is denied.
- Claims Against Exclusions: Exclusions are circumstances which are not protected by the insurance provider, as set out in the policy statement. Thus, if a claim is made in the 'exclusion' section of the policy for the condition specified, it will be denied.
- Delay in Accident Reporting: Any accident should be promptly reported to the insurance provider. If you take a long time to raise a claim and do not furnish the insurance provider with the appropriate paperwork within the prescribed timeline, the claim will be denied.
- Non-Disclosure of Modifications: If you want to cover such additions or modifications in the policy, it is important to notify the insurer of any additional accessory installation or modification in the vehicle, otherwise the insurance provider will deny the claim in advance.
- False Insurance Claim: The making of deceptive or inflated statements will result in the dismissal of the claim which can have legal implications.
Tips to Prevent Rejection of Car Insurance Claim
- One way to avoid having your car insurance claim denied is by telling the truth. Thus, any details that you give to the car insurance provider should be true.
- Make sure to renew the insurance policies of your car on time. If your policy has lapsed/expired or lapsed, you cannot make a claim.
- To avoid claim denial by the insurance provider obey/abide by all the laws/rules/regulations always. Thus, under the influence of drugs/alcohol or without a proper driving license, you must not drive.
- To prevent denial of your claim, ensure you follow your car insurance provider's claim process. Any mistake because of not following the claim process will lead to denial of the claim.
- Always let the car insurer know of the modifications/additions you make to your car such that your claim will not be denied later.
- Before sending your vehicle for repair, always notify your car insurance agent about the accident. Before the inspection, if you take the vehicle to a dealership for repairs, then your insurer will deny your claim
A car insurance policy aims to redeem the damages caused should any unforeseen accidents occur in your car. Therefore, when filing a claim it is prudent of you not to make mistakes, which can lead to the claim being dismissed. You should be aware of the factors that a claim is denied to avoid potential mistakes and ensure that the claim is settled effectively to avoid such a scenario.
Disclaimer: This article is issued in the general public interest and meant for general information purposes only. Readers are advised not to rely on the contents of the article as conclusive in nature and should research further or consult an expert in this regard.