12 Common Reasons for Car Insurance Claim Rejection
Nothing in this world is damage-proof, including your car. You may have purchased your favourite car after saving for months but that doesn’t immune it from getting damaged due to unforeseen events. The only thing that is in your hand is to cover your vehicle under a valid car insurance policy. Car insurance will provide financial security to your car in the event of a loss or damage. You can ensure the best financial protection for your car if you compare car insurance plans online based on their coverage, premium and benefits.
According to the Motor Vehicles Act, 1988, every car plying on public roads should be covered under at least a third party car insurance policy. However, it is advisable to buy a comprehensive car insurance policy to cover any loss or damages sustained by your car. This is because comprehensive insurance provides financial protection against own damages of the vehicle as well as your third party liabilities. However, third party car insurance covers only the third party legal liabilities arising out of your car. Thus, you must choose comprehensive insurance instead of third party car insurance to ensure all-round protection of your car.
What is Car Insurance Claim?
When a car gets damaged or destroyed due to an unforeseen incident, the owner of the car needs to raise a car insurance claim at the earliest. A car insurance claim is a procedure of informing the motor insurer about the loss or damages to the car in order to get the financial assistance that covers its repair or replacement cost. Every car owner needs to raise a car insurance claim with his/ her insurer to get financial aid irrespective of whether he/ she has a comprehensive or third party car insurance policy.
As a car owner, you can raise two types of car insurance claims with your motor insurance provider - cashless claim or reimbursement claim. A cashless claim can be raised if your car is sent for repair at a network hospital or your motor insurer. In this case, the insurer will directly pay the repair bill amount to your garage. On the other hand, reimbursement claim can be raised if your car is getting repaired at a non-network garage of your insurer. In this case, you will have to pay the garage bill and your insurer will pay the claim amount to you. You can also compare car insurance plans based on the list of network garages while buying a comprehensive or third party car insurance policy.
How to Raise a Car Insurance Claim?
In the event of a loss or damage to your car, follow the steps given below to raise a car insurance claim with your insurance provider:
- Call the customer support of your insurer and inform them about your car damage or loss
- A surveyor will be sent by your insurer to inspect the damages to your car
- Provide all the requested information and documents to the surveyor
- Take your car to the garage from the accident spot
- Submit all the required documents to your motor insurance company
- Collect your car after repair from the network garage without paying the bill
- In case of a non-network garage, pay the entire repair bill and take your car home
- Submit the repair bill and payments receipts to your insurer
- Your insurer will pay your claim amount
12 Reasons Why Your Car Insurance Claim Can be Rejected
When you raise a car insurance claim, the insurance company decides to either approve or reject the claim. The decision is made based on the survey report of the surveyor and the documents that you have submitted. Everything is merry if your claim is approved. However, your insurer can also reject your car insurance claim forcing you to bear the cost of repairing your car. If you are wondering why the insurance company will deny your claim, take a look at the common reasons for rejection of car insurance claims:
If There is Delay in Claim Intimation
Every motor insurance company has a specified time frame within which the policyholder is supposed to raise a car insurance claim. For instance, some companies require you to intimate them about loss or damage of the car within 48 hours of the incident and some provide a time period of 7 days from the day of the accident/ event. If you fail to inform your motor insurer about the car damage or loss within the stipulated time, there are chances of your claim getting denied.
If You Raise Fraudulent Claims
The relationship between the policyholder and the motor insurance company is based on mutual trust. The car owner trusts the insurer to provide financial security to their vehicle in the event of damage or loss. Similarly, the insurer trusts the car owner to be honest and raise a genuine claim. In case you raise a fraudulent claim or intentionally damage your car, your insurer will have the right to reject your comprehensive or third party car insurance claim.
If You Drive Your Car in a Drunken State
Driving a car under the influence of alcohol is a legal offence under the motor laws of India. Going against the laws is not encouraged by any motor insurance company. If your car is damaged while you were driving it in a drunken state, you will be held responsible for the resultant accident. Therefore, if you are caught driving a car under the influence of alcohol or if you were drunk driving at the time of the accident, your insurer will reject your car insurance claim without any second thoughts.
If You Drive Without a Valid Driving License
The motor laws of our country also state that every person driving a car should have a valid driving license. No motor insurance company promotes underage driving or driving with a valid driving license. As a result, if you or the driver of your car does not have a valid driving license, then your insurer can reject your car insurance claim. The insurer will not be responsible for covering any loss or damages of your car while driven by a person without a driving license.
If You Violate Policy Terms & Conditions
All car insurance policies are governed by a few terms and conditions. Any violation of these terms and conditions can lead to rejection of the claim by the insurer. For example, a private car cannot be used for commercial purpose as per the terms of car insurance. If you use your personal car for commercial purpose and meet with an accident, any resultant loss or damages caused to the vehicle will be not be covered by your insurer due to the violation of policy terms and conditions.
If Your Policy Has Lapsed
Every car insurance policy has an expiry date. As the car owner, you are supposed to renew your comprehensive or third party car insurance policy before the expiry date. After the expiry date, the car insurance policy ceases to exist or get lapsed and the insurer is not obligated to cover your car damages. Therefore, if you fail to renew your policy on time, your motor insurer can reject your car insurance claim.
If the Car Damage is Excluded
All car insurance plans come with certain exclusions. The insurance company does not provide coverage for any situations or expenses mentioned under exclusions. So if you raise an insurance claim for an excluded situation, your insurer will reject it. For example, general wear and tear of the car or damages caused outside the geographical boundary of India are excluded under car insurance. If you raise a claim for these expenses, then your insurer is within its rights to deny your car insurance claim.
If Your Car Has Been Modified Without Informing the Insurer
At the time of buying a car insurance policy, you are required to provide details about your car and its condition. If any changes or modifications are made to the vehicle during the policy tenure, the policyholder must inform the insurer about the same. In case you do not notify them about your car modifications, your insurer will find out about it during the survey of your car before claim approval. In that case, your insurer can reject your car insurance claim for non-disclosure of information.
If You Are Not the Owner of the Car You Drive
The owner of the car and policyholder of car insurance must be the same person. You cannot raise an insurance claim for a car that you do not own. Even if you have purchased a second hand car and the ownership transfer is still under process, you cannot raise a claim. In case you do raise an insurance claim for a car you do not own legally, your motor insurer can reject it.
If There Has Been a Consequential Loss/ Negligence
When a car part is damaged, it can lead to loss or damages of other car parts. For example, damages sustained by your car tyres while being towed to the garage after an accident. This is considered as consequential loss which is not covered by car insurance. Hence, any claim arising out of a consequential loss will be rejected by your insurer.
If Car Damages Result Out of Your Negligence
A motor insurance company expects you to take good care of your car. In case your car gets damaged due to your negligence, your insurer can deny your claim.
If You Repair Your Car Without Informing the Insurer
When your car gets damaged, you must not get it repaired unless the vehicle has been inspected by the surveyor. If you repair your car before the survey without informing your insurer, your car insurance claim can get rejected.
In a Nutshell
Car insurance is the best way to financially secure your car against unforeseen incidents. You can compare car insurance plans to buy your ideal policy but your car damages won’t be covered unless you raise a car insurance claim. Make sure to keep the above-mentioned reasons in mind to avoid getting your comprehensive or third party car insurance claim getting rejected
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