10 Reasons Why Insurance Companies Can Reject Your Car Insurance Claims
In India, everyone who owns a car has a motor insurance policy. Having a valid car insurance policy with a third party liability cover is a legal mandate in the country. Besides, you can also get damages to your car covered by opting for comprehensive car insurance, provided you claim the damages with your motor insurance company. But not all claims received by an insurance company gets approved.
Car Insurance Claim Status
When you register a claim with your motor insurance provider, three things can happen. Your claim may get approved, your insurer may seek additional information or it may get rejected.
In the first scenario, your insurer will approve your claim after verification and pay the claim amount to you.
In the second scenario, your insurer will put your claim on hold and ask you to provide some additional information, including some documents, before making the decision. Once they receive the required documents or information, they will either approve or reject your claim.
In the third scenario, your insurance company will reject your car insurance claim and will refuse to pay the claim amount to you.
Rejection of Car Insurance Claims
Car insurance claims can be quite tricky. Not even the best car insurance comes with a guarantee of disbursing all the claims. The claims are either approved or rejected based on terms and conditions of the policy. Any mistake or violation of these terms can lead to rejection of the claim.
Rejection of a car insurance claim can affect you financially. Imagine a situation where your car was seriously damaged in an unfortunate event but your motor insurance company rejects your claim. In this situation, you will have to pay for the repair of your car from your own pockets, which can be really expensive.
Hence, it is really important to not make any mistakes while making car insurance claims and avoid getting your claims rejected.
10 Common Reasons for Rejection of Car Insurance Claims
To avoid making any mistakes, you must be aware of the situations that can lead to rejection of your insurance claim. Here are 10 common reasons for rejection for car insurance claims:
Making False Claims
The concept of insurance is based on good faith. Both the insured and the insurer is expected to be honest at all times. Thus, you should not be making any fraudulent claims with your insurer. In case your motor insurance company finds that you are claim is false, then they can reject your claim. Moreover, the company can also file legal charges on you.
Non-Disclosure of Car Modifications
After you purchase a car, you may want to make some modifications to enhance the performance, appearance and security of the vehicle. While some modifications may increase the premium, such as fitting of CNG kit, others may reduce the policy price, such as the installation of a safety feature. No matter what the modification is, it can impact your car insurance premium. Therefore, any modifications that you make to your car should be intimated to your motor insurance provider. If your insurer gets to know about any modifications during the claim process, they can reject your claim.
As a car owner, you have the right to raise a motor insurance claim as long as you have a valid policy. If your four wheeler insurance policy has expired or lapsed, then even the car insurance company is not legally bound to consider your claim and pay for your vehicle damages. Hence, your motor insurer can deny your claim if your car insurance has expired.
Violation of Motor Laws
Motor insurance works in coordination with motor vehicle rules and regulations. There are certain motor laws that every driver is expected to follow to ensure his/ her safety as well as of other people on the road. Violation of motor laws can add to the risk of an accident, thereby, increasing the liability of the insurer. Moreover, insurance companies only pay for unintentional damages and defying the motor laws is considered an intentional act. Hence, if you violate motor laws, such as drunk driving your car and driving without a valid licence, your insurer will reject your car insurance claim.
Claims Arising Out of Exclusions
Every car insurance policy comes with certain exclusions that specify the situations which are not covered in that policy. Any claims arising out of these exclusions get rejected. Illegal usage of the car, wear & tear of the vehicle and driving outside the geographical limits are some of the most common car insurance exclusions. If you make a claim out of these exclusions, your insurance provider has the right to deny your claim.
Negligence of Car Owner
A motor insurance company can deny a claim if it arises due to the negligence of the car owner or driver. As a car owner, you have the responsibility to maintain your car and ensure its safety from any probable risk. If you don’t get your car serviced on time, it can lead to major faults damaging your vehicle. In such a situation, your insurer may deny your claim on account of your negligence.
Commercial Use of Private Cars
Private car insurance policies are designed to cover any damages caused to or by a four wheeler used for private purposes. If you use your private car for commercial purposes and raise a claim arising out of commercial usage of the vehicle, your insurer can reject your claim.
Non-Adherence to Claim Process
Every car insurance company has a specific claim process. You may be required to intimate the insurer about the accident within a specific time period and may need to submit certain documents. If you fail to follow the claim process and do not coordinate with the surveyor or claims team, then your motor insurer will reject your insurance claim.
While buying the car insurance, you should fill the proposal forms honestly. You should not fabricate any information and lie to the insurance company. You may be able to reduce your premium at the time by lying but may lead to rejection of future claims. This is because any false information will come to fore during claim settlement, which may result in your motor insurance company denying the claim.
Remove Your Car from the Accident Spot
It is natural to panic if your car meets with an accident. However, you should never run away or remove your car away from the accident spot. Most car insurance companies inspect the damaged car on the accident spot as per the claim process. If you take your car home, you may defy the claim process leading to the rejection of your claim.
Tips to Prevent Rejection of Car Insurance Claims
Here are a few tips to prevent rejection of car insurance claims:
Speak the Truth
One way to avoid getting your car insurance claim rejected is by speaking the truth. The best car insurance companies investigate the claim before approving it and will, ultimately, discover the truth. Hence, any information that you provide to your motor insurance company at any point in time should be correct. Moreover, avoid making any false claims as not only your claim will be rejected but you may face legal consequences.
Renew Your Policy on Time
Always renew your car insurance policy on time. You cannot raise a claim if your policy has expired or lapsed. Thus, if you don’t want your insurer to deny your claim, your policy should be renewed on time. Set up a reminder for policy renewal if you are worried that you will forget renewing it.
Abide by the Law
Follow all the rules and regulation at all times to avoid the rejection of claims. Adherence to motor laws will not only reduce the probability of an accident but will also ensure that your insurance company honours your claim. Thus, do not drive under the influence of alcohol or without a valid driving licence.
Follow the Claim Process
Make sure to follow the claim process of your motor insurance provider to avoid rejection of your claim. The process is unique to every insurer and should be followed carefully. Any mistake you make due to not following the claim process can result in denial of your car insurance claim.
Inform About Car Modifications
Always inform your motor insurer about any modifications you make to your car. The modifications made to your car can affect your car insurance policy premium. Thus you need to inform your insurer about the modifications so that your claim does not get rejected later.
Avoid Consequential Loss
Avoid any consequential loss to your car if you don’t want your claims to be rejected. Not even the best car insurance company covers consequential loss to a car. For example, if your parking lot gets flooded due to incessant rains, trying to start the engine of your submerged car can increase the damages to your car leading to consequential loss and rejection of claims.
First Inform, Then Repair
Always intimate your motor insurance provider about the accident before sending your car for repair. Your insurer may want to inspect your car on the spot as part of the claim process. If you send your car to a garage for repairs before the inspection, then your insurer can reject your car insurance claims.
Summing It Up
Getting a car repaired can be very costly. The last thing you would want after a car accident is to face rejection of your car insurance claims. If you keep the above-mentioned reasons and preventive measures for denial of car insurance claims in mind, any loss or damages to your four wheeler will be covered by your motor insurance company.
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