Seeing the first dent or scratch on your car can be heart-breaking, especially if it was caused due to someone else’s fault. But what’s more disappointing is when your car insurance claim is rejected by your car insurance company.

Believe it or not, car insurance companies do not like to reject motor insurance claims without a reason. They resort to measures such as rejecting car insurance claims or considerably lowering the pay-out if they have a reason to believe that the car insurance policyholder did not deserve to be reimbursed the entire amount requested. 

Typically car and two-wheeler owners do not read the policy document and are unaware of the fine print or ignorant about the exclusions and scope of their policies. Here are some reasons your claim could be rejected or not fully paid by your vehicle insurer.

Car Insurance claim can be made in two ways viz, Cashless & Reimbursement. For cashless claims you need get your vehicle inspected and repaired at a network garage without making the job payment except the consumables cost. However, in case of reimbursement claim you have to make the initial payment at the non network garage. You can then submit the job sheet and invoices with your insurer to get the claim settled.

Top 10 Reasons of Rejection of Car Insurance Claims

1. Ignorance about Policy & Add-On Covers

A common reason for claim rejection and people’s grouse is that some specific damages are not covered under the policy and one needs to buy separate add-on covers for these. “For instance, engine damage or depreciation losses are not covered in the basic policy and you need separate engine protector and zero depreciation add-on covers for these

2. Missing an Insurance Renewal

Nothing can be worse than this if you imagine. Suppose your car insurance policy expired 5 days back and you missed the renewal. On the sixth day, you meet an accident in which your car was damaged with intense dents. When you intimate the insurance company about the loss, they will not consider the claim as admissible. The only reason is that your car was uninsured.

3. 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.

4. Violation of Policy Conditions

The type of car insurance policy binds you to use your vehicle in a particular manner. Say, for example, your vehicle is insured under the private category of the vehicle but you use it for commercial purposes. One day, while you were using it for goods transport you mistakenly hit another car passing by. It caused dents in your car for which you reported an own damage claim. But the insurance company will deny the claim after investigation as they will find a breach of the policy condition.

5. Concealment or Wrong Information

If there are wrongful disclosures or material facts are not disclosed at the time of buying a policy, such as falsification of no-claim bonus or pre-existing damages, then the claim is bound to be rejected. Similarly, if one provides wrong information about the accident or damage caused while filing a claim, it can be denied.

6. Policy Guidelines

If you do not comply with limitations of the use clause in your policy, the claim will be denied. So, if you are not driving within the specified geographical limits or if the vehicle does not have the specifications listed in the policy, say a particular engine capacity, the claim is likely to be denied.

7. Driving a modified Car without Intimation

When you took the insurance policy, you made some declarations on car specifications like engine capacity, alloys, or others. This is what the policy will cover for you. But after some time, you got an upgrade in the car’s engine and did not intimate the same to the insurer. So, if you meet an accident, the insurance company has the complete authority to reject the claim on the grounds of un-notified car modifications.

8. Damage due to Self-Negligence

If you recklessly park your vehicle at a No Parking area and it collides with another vehicle, under such circumstances your claim shall not be entertained.

While assessing your vehicle if car insurance company find these faults then it might affect your claim approval process. You can simply avoid doing the above things and get your claims settled by your car insurer.

9. When you Drink and Drive

You know that drunk driving is a legal offence and it will lead you to criminal processing. Imagine it was a friend’s party in which you consumed alcohol with your friends. After dinner, you were driving your car but lost control and banged a third person’s car. The traffic policemen may immediately grab you and the loss bearing party files a claim. The insurance company will investigate the case and on establishing the fact that you were drunk which led to an accident and claim, they will deny further execution of claim.

10. No Driving Licence

If the person driving the vehicle is not carrying his licence at the time of the accident, the claim will be denied. Also, he needs to have a valid licence that has not expired and is for the type of vehicle it is specified for. For instance, if he only has the licence to drive a two-wheeler but meets with an accident while driving a car, the claim will be denied.

Factors to ensure your Motor Insurance Claims are not rejected

1. Check Car Insurance Policy Status

Are you sure your car insurance policy was valid at the time the accident took place? If the event took place even a few hours after your policy lapsed, the claim will not be approved by the insurance company. Always ensure your policy is renewed on time to prevent rejections of claims.

2. Have a Valid Driving License

The first requirement for processing a motor insurance claim is that at the time of the accident the vehicle needs to be driven by a valid and effective driving licence holder. If your driving licence was not valid at the time of the accident, or if you did not have one, your car insurance company will not honour your request for claims.

3. Do Not Make Repairs without Informing the Insurance Provider

Assume your car met with an accident and you got it fixed without informing your car insurance company. Later, you raised a request with your insurance provider to claim the amount spent towards repairs. However, this was rejected by your insurer. Are you wondering why? As the car insurance provider was not informed about the accident and the subsequent damage to your vehicle, they could not verify the authenticity of your claim due to which your claim was rejected. In situations such as this, always inform your motor insurance provider first, as they will send a surveyor to inspect the extent of the damage to your vehicle after which your vehicle can be sent for repairs.

4. Inform Car Insurance Provider about Modifications

When buying a motor insurance policy, always inform your insurance provider of any alteration/modification you may have carried out in your car, for instance, installation of CNG or LPG kit. Your claim settlement may be impacted if any major alteration carried out in your car is not endorsed in your policy document.

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