Rejections, of all kinds, can be disappointing. If the rejection is related to car insurance, it can affect your bank balance. Insurance doesn’t offer instant gratification. It is a promise based on certain terms and conditions. It is natural for a policyholder to feel offended if the insurance company doesn’t live up to the promise of claim settlement. But there are two sides to a coin. And the car insurance company has its reasons for claim rejection.
- 7 Most Common Reasons for Car Insurance Claim Rejection:
- Prevent Claim Rejection:
- Frequently Asked Questions:
7 Most Common Reasons for Car Insurance Claim Rejection:
By being aware of the following points, you can avoid making such mistakes and ensure that your claim (if and when it is raised) gets settled smoothly.
1) Being Untruthful:
Insurance is based on the underlying principle of ‘Utmost Good Faith’. This means one should not raise a fraudulent claim. Insurance is not for making profits, it is for mitigating losses. If the insurance company finds out that the claim has been raised on a fraudulent basis, they will reject it. There might be legal implications to it as well.
2) Non-disclosure of Modifications:
Car enthusiasts love to modify their cars. Car modifications can be slotted in three categories: Performance enhancement, Aesthetic enhancement and Security. Performance and Aesthetic changes will increase your premium whereas Security enhancements (anti-theft device) might decrease it. Whatever the case, you need to inform your insurance company as soon as you modify your vehicle.
For example, if you modify your car to increase its speed, do not inform your insurer, and it is involved in an accident due to speeding, chances are that the insurance company will reject your claim.
3) Commercial Use:
You cannot raise a claim for a vehicle used for commercial purposes if it is insured with a private car insurance policy. There is a separate commercial car insurance policy for it.
4) Lapsed Policy:
No insurance company is going to honour your claim if the application is made against an event that has occurred after the policy expiry. It is like raising a claim for a policy you haven’t purchased!
5) Claim against Exclusions:
Exclusions are those conditions which are not covered by an insurance company. Such exclusions are mentioned in the policy document. Thus, if you raise a claim for a condition mentioned in the exclusions section of the policy, it is not going to get honoured.
6) Disobeying Rules and Regulations:
There are specific rules such as underage driving, drunken driving, etc. that need to be followed. Your claim for own damage will be rejected if it is found that the car accident took place because you were drinking and driving.
You need to raise a claim within a specified period and cooperate with the claims team regarding details related to the event against which the claim is raised. For example, the claims inspector might ask you some questions if you have raised a claim for a car accident. You need to answer those questions honestly.
If you fail to provide an honest narrative or if you do not provide supporting documents (if needed), the insurance company might follow up with you for a while but eventually will reject your claim based on non-cooperation.
Also, read: Insurance for your Luxury Car
Prevent Claim Rejection:
You can prevent the rejection of your car insurance claim by ensuring to follow the below-mentioned points.
1) Don’t Increase Consequential Loss:
Consequential loss occurs when you try to run the car after an accident. This is a major loss in terms of damage. For example, if your car is submerged in water and you try to start the engine. The car had already suffered water damage. But because you tried to start the car, additional water has affected the engine due to which the hydrostatic lock got activated. In this example, your insurer will pay only to cover the initial damage caused by the water and not the expenses related to the hydrostatic lock. This consequential loss claim will be rejected.
2) Respect the Law:
An insurer will honour a claim only when unintentional damage has occurred. When you break the law, your intentions are not in the best interest of you or those around you. Thus, your claim will be rejected. Always make sure that you respect the law. For example, make sure your driving license is valid.
3) Follow the Claim Process:
Each insurance company has a set of rules when it comes to their claim process. To get your claim honoured, you need to follow your insurer’s claim process. This could include intimating the insurance company within stipulated time under the right conditions, or submitting the required documents, or coordinating with the claims team.
4) Be Honest:
In case of an accident where multiple parties are involved, only the true claim will be honoured. Your claim will be rejected if you are found to be guilty of falsification. Remember that insurance companies carry out a thorough investigation of the incident via various means. Thus, always be truthful about what exactly caused the damage or injuries.
5) Renew in Time:
Always make it a point to renew your car insurance policy in time. A claim will be rejected without any investigation if you raised it against an expired policy. Renew your policy and go through the inclusions and exclusions thoroughly if you want your claim to be honoured. Remember that reading the fine print will help you get a clear idea about the policy. You need to be sure that you raised the claim in a correct manner and against a corresponding inclusion.
6) Inform about Changes:
One of the most common reasons for a claim getting rejected is that the insurer is not aware of the changes made to the car. For example, installing a CNG kit in your car. Your claim may be rejected if the fuel type on your car insurance policy does not match the actual fuel type of your car. Same goes for any modification. You need to inform your insurer about all types of car modifications.
7) Don’t Repair without Informing:
Last but not least, do not send your car for repairs without getting a go-ahead from your insurer. This is because, after an accident, your car will be surveyed for the extent of damage it has suffered. Your insurer will give an approximate estimate of the expenses related to repairing this damage. Your claim can be rejected if you get your car repaired without a survey.
Frequently Asked Questions:
Nowadays, one can easily purchase car insurance online in India. However, one must be proactive when it comes to checking the credibility of an insurer before purchasing car insurance. People usually compare car insurance based on premium and coverage but they should also compare car insurance based on service offered and the insurer’s claim settlement reputation.
If you feel that your claim has been rejected on unfair grounds, you can write to the insurance company’s grievance officer or the insurance ombudsman. Their contact details shall be mentioned in your policy document.
Renewing car insurance online can help you to get the most suitable policy at a lower cost. Follow these steps to buy car insurance online:
> Visit your preferred insurer’s website (example – www.acko.com)
> Find the car insurance online page
> Enter the details related to you, your car and your previous policy
> Go through the coverage and exclusions thoroughly
> Make payment
If you renew your car insurance policy in time, you will get your new policy within minutes. You may be given an option to download the policy from the insurer’s website or it will be sent to your email ID or both.
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