Basic Reasons for Rejection of Car Insurance Claims

Your Car Insurance Policy covers the losses arising out of: 

• Natural disasters like floods, cyclones, etc.
  
• Damages arising due to a Car Accident 
  
• An accident with any third-party which may lead to their bodily injury or property damage.
  
• Theft of your car.
  
• An accidental fire which may happen in your car.
  
• Accidents that unfortunately lead to death or loss of life.
  

Other than these events, there can be instances when you file a claim but it gets rejected by the insurance company. It may annoy you but an insurance policy will pay only if it falls in the scope of cover.

As a customer you should know reasons due to which you can face rejection in Car Insurance Claims:

1. If you make a fraudulent claim

An insurance company sells you a car insurance policy because you will never dupe them just to seek benefits. Against your car insurance claim, an insurer can deny you the claim if you try to create a fraud picture of the claim.

Like your car was giving you some trouble in running. But after an accident which caused a dent on the right side of the bumper but you say that the car suddenly stopped then it may be a case of fraud.

2. 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.

3. Driving without a Driver’s License

If in any case, you are found driving your car without a driver’s license, you will be held equally liable for fault if you meet an accident. In such a case, the insurance company reserves the right to reject the claim at the outset. 

4. 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.

5. Delay in Claim Intimation

There is a deadline before which you should make intimation to the insurance company about the accident and associated losses.

If by any chance, you take more than the predefined time to make claim intimation, there are chances of the insurance company to disapprove the claim.

6. 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. 

7. 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.

8. You don’t own the car you drive

Think of it this way that you were driving a second-hand SUV bought from your friend. The transfer of ownership was still due. You just learned driving so there was a hitch but in all cases, you were extremely passionate about it.

After 10 days of purchase, one morning you drove to enjoy the ride in your car. You missed a signal and hit a college student. The boy was injured and his bike got damaged. The incident was reported to the police immediately and you were asked to show the insurance policy.

You called up the insurance company who denied you the claim because there was no legal transfer of ownership through RTO. Not only this, the traffic policeman will charge you with fines because you were caught driving without insurance policy.

9. Uncovered Losses

Your Car Insurance Policy does not cover intentional damage, that is when you purposely break your car. If you file a claim for any such reason, your claim will be rejected.

10. Non-Disclosure

Non-Disclosure of information is considered bad when it comes to claim or policy buying. Like if you do not tell the insurer at the time of filing a claim that you were drunk which led to the accident but they found it later, your claim will be rejected.

11. Claims arising out of Consequential Losses

If you drive a damaged car which further deteriorated the condition leading to engine damage, then such losses will not be covered under the Car Insurance Policy.

12. Negligence

Any kind of negligence that contributes to the occurrence of losses will not be covered. Like if you drive your car in flooded areas despite the manufacturers manual which states the car will breakdown if driven in such condition. The claim arising in such a situation will not be paid.

A Car Insurance Policy helps us to redeem the loss amount which we would otherwise spend from our savings. It will be prudent of you to not commit any mistake that may lead to the rejection of a car insurance claim.