Free quotes from top insurers with lowest premiums in 30 seconds
*Please note that the quotes shown will be from our partners
*savings provided by insurer

When an Auto Insurance Claim is Rejected?

It is common for Auto insurance companies to reject large number of car insurance claims or to reduce there payment values. Generally they would do this, only if they have genuine reasons. Filing claims and receiving the monetary benefits could be a difficult task. There are several factors that can result in claims rejection:

  • The insurer may come to the conclusion that driver was largely or entirely at fault in case the claim is related to theft from the vehicle or of the vehicle itself. The car insurance policy may contain a clause which invalidates the claim.
  • The insurer may call off the claim if the information provided during application was inaccurate or false.
  • Another reason why a claim may get rejected is that the customer may have taken an insurance policy for a normal private car while it was actually used for commercial purposes. When a customer has a taxi, he should use a policy which is designed for taxis.
  • In case of partial damages, which occur as a result of accidents, a customer often gets claims lesser than demanded because of the depreciation of the vehicle. So, an insurance company puts a car back in the same position as it was prior to the damage of the vehicle. For example, if the engine of a five-year old Maruti car is damaged, the insurance company is liable to pay the customer equivalent to five year old engine. If it is replaced with the new one, then the depreciation is deducted as per the tariffs so as to bridge the gap between the cost of the new engine and five-year old engine.
  • If you are unable to provide receipts to backup claims of theft of items from your vehicle.
  • If the value of the car is considerably less than the money you've invested in restoration or enhancements.

In any insurance policy your insurer expects you to disclose all the information that could be of importance to them. You are obliged to do this even if the detail is not requested. This process is known as “utmost good faith”. Insurance companies often use this extremely wooly approach to sharing information to justify rejecting or downscaling claims. If such situations arise with your car insurance claim, there are certain important points to remember:

  • The small print of your policy carries a lot of weight, read it thoroughly before, during and after your claim.
  • Keep the accurate records of conversations and correspondence along with all the receipts backing up your claim.

The payout figure announced by your insurance company is not a set in stone. Rather than just accepting the amount on offer you are perfectly entitled and rightful to question the payout. And you can put forward your case for why it should be increased.

You May Also Like
  • Top 5 Motor Insurance Companies in India
    / 5 ( page reviews)

    Getting a Motor Insurance, unlike other forms of insurance, is not a choice but a legal compulsion. It is mandatory to have a third-party motor insurance under Indian Motor Act. But it is recommended by experts to get a ...

    read more
  • Zero Depreciation Car Insurance Coverage & Features
    / 5 ( page reviews)

    English Hindi   Mr. Kamal Shah got furious as he had to spend Rs 30,000 from his pocket towards repairing of the car. The comprehensive car insurance, which he bought last year, only reimbursed Rs 70,000 after fa...

    read more
  • Insured Declared Value (IDV)
    / 5 ( page reviews)

    Insured Declared Value is the maximum Sum Assured fixed by the insurer which is provided on theft or total loss of vehicle. Basically, IDV is the current market value of the vehicle. If the vehicle suffers total loss, ID...

    read more
  • 9 Secrets That Your Motor Insurance Provider Won’t Tell You
    / 5 ( page reviews)

    Due to the dangerous driving conditions, it is compulsory to have third party insurance for every vehicle plying on Indian roads. It ensures the overall safety of the people involved in a road mishap. As we all know, it...

    read more
  • Money Saving Advice for All Car Owners
    / 5 ( page reviews)

    After a dream home, a dream car is your second-largest purchase that you make in your lifetime. But the expense does not cease when you drive off the car dealer's lot. Owning and maintaining a vehicle makes up the secon...

    read more