A car insurance policy protects you against financial losses arising out of the theft of your car or damages caused due to an accident. While buying third-party car insurance is mandatory for any car, a comprehensive policy offers better protection to you as well. Right since insurance was introduced to the world, there have been people annoyed about their claims being rejected for no reason. While we understand the anger, it is important to remember that an insurance company has to pay if the claim falls within the scope of the cover. Hence, the root cause of the rejection lies in the lack of understanding of what the policy covers and what it doesn’t. Today, we will be talking about the most common reasons for the rejection of car insurance claims and how you can prevent them.
What does a Car Insurance policy cover?
While the cover can vary, a typical car insurance policy provides cover for financial losses arising out of:
- Damages to the car due to:
- An accident
- A natural disaster like an earthquake, flood, etc.
- An accidental fire
- The theft of the car
- An accident with another car resulting in the damage of third-party property and/or physical injury to the people in the other car
- Accidents resulting in death
Before you start looking at car insurance quotes, know what the policy covers.This is the first step to ensuring that your claim doesn’t get rejected by the insurer. Ensure that you check with the insurance company and get a detailed list of all scenarios under which the company will honour the claim or reject it.
Here are some of the most common reasons for rejection of car insurance claims and how you can prevent them:
- A fraudulent claim
The relationship between the insurer and the insured should be based on trust. However, if you try to dupe the company for benefits, then your claim can be rejected. For example, car insurance does not cover damages to the car due to wear and tear of the engine or car parts. Let’s say that your car was giving problems on the road due to wear and tear. You meet with a small accident that dents the front of the car and you claim that the car has stopped running because of the accident. Once the insurer gets the car examined and realizes that the claim is fraudulent, they will reject it.
- Drunk driving
Driving under the influence of alcohol is illegal and a punishable offence. If you get into an accident while driving drunk, then the insurer can reject your claim.
- No driver’s license while driving
According to the country’s law, you cannot drive a car on public roads without a driver’s license. If you are found in an accident driving the car without a license, then the insurer has the right to reject the claim.
- Un-notified car modifications
The insurer calculates the IDV (Insured Declared Value) of the car based on its specifications. The premium amount is calculated taking all the details of the car into account. If you make any modification to the car, then it is your responsibility to inform the insurance company who will re-calculate the premium to match the modified vehicle. Failure to do so gives the insurer the right to reject your claim on the grounds on un-notified car modifications.
- Filing a claim after the deadline
All car insurance policies inform the insured about the deadline before which a claim needs to be filed. So, if you meet with an accident and face damages, then you must ensure that you inform the insurance company within a specified time limit. A delay can result in the rejection of your claim.
- Breach of policy conditions
If your car has been insured as a private vehicle and you use it for commercial purposes and meet with an accident, then the insurer can reject your claim due to the violation of policy conditions. Remember, you need to stick to all the policy conditions to ensure that your claim does not get rejected.
- A non-renewed policy
If you miss renewing the policy, then your car is basically uninsured. Let’s say that your car insurance policy was up for renewal four days ago, and you missed it since you were busy. Before you could get in touch with the insurer, you meet with an accident, and your car gets damaged. In such cases, the insurer will not entertain your claim since the policy has lapsed.
- Intentional damage
If someone damages their car in a fit of rage and files a claim with the insurer, the claim will get rejected. Car insurance does not cover intentional damage to the car.
Remember, reliable car insurance companies like Tata AIG work by a fixed set of rules. In most cases, rejections are caused due to some violation or breach of terms mentioned in the policy document. Ensure that you read all the fine print thoroughly and clear all doubts before buying a policy. We hope that this article sheds some light on the common reasons for the rejection of car insurance claims. Be prudent and follow all rules to get your claim approved. Good Luck!