07 Common Reasons to Why Car Insurance Claim May Get Rejected

Isn't driving a car a liberating feel? You save for months and years to buy your dream car. While buying a car, you would have come across third-party car insurance. Third-party insurance is a legal mandate in India. You would have been suggested to buy a comprehensive car insurance policy. People usually do not consider four wheeler insurance that important. Yet, the fact remains that nothing on this planet is damage-proof. What if under an unforeseen event the car meets with an accident. Even the slightest dent in a car is stressful. Just imagine, if the accident was bad and the car involves a lot of repairs. The financial part could be exhausting and disheartening. This is when a car insurance policy comes into the picture.

Why Car Insurance?

A car insurance policy provides financial security to the car in case of loss or damage due to an accident/ mishap. Buy car insurance online, customize the plan as per needs and make an informed choice. It is always better to with a comprehensive car insurance policy as it provides financial protection against own damages of the vehicle and third-party liability as well. It is vital to understand that third-party car insurance covers the third-party legal liabilities arising out of the car. Ensuring the all-around protection of the car is in your hands. It is important to read the car insurance policy documents carefully. However, people often are unaware of the inclusions and exclusions of car insurance. There are several reasons behind the rejection of a car insurance claim. The reasons could vary from person to person and insurer to insurer.

What is a Car Insurance Claim?

Under any unforeseen event, when the car gets damaged, the car owner raises a car insurance claim provided the policy is active. To put it simply, in a car insurance claim, inform the motor insurance company about the loss or damage incurred to the car. The insurer will help to get financial assistance for the repair/ replacement expenses. Regardless of what type of car insurance policy you have, the insurer needs to be informed at the earliest.

Car Insurance Denied? Here's What You Need to Know

When you raise a claim, the insurer either approves or rejects the claim. The decision is made on the premise of the survey report and the submitted documents. A rejection of a car insurance claim implies bearing repairing expenses from the pocket. Wondering, why would the insurer reject the car insurance claim? Let us briefly explore the common reasons leading to car insurance claim rejections.

1. Fraudulent Claim: One of the most common reasons that the insurance company denies the claim is when a fraud picture of the claim is created. For instance, if the car was giving some trouble in running. The car meets with an accident causing a dent on the left side of the bumper. However, the policyholder says that it stopped suddenly then it is a case of insurance fraud.
2. No Driving License: If a person driving the car is not carrying the driving license at accident time, the car insurance claim will be denied. Next, the driving license needs to be valid, for the vehicle specified and not expired. For example, supposedly if Karan has a two-wheeler license, however, meets with an accident while driving the four-wheeler, then the car insurance claim will be denied.
3. Use of Vehicle for Commercial Purpose: If a car was bought for personal use, yet is used for commercial purposes the claim will be rejected in case of an accident/mishap.
4. Driving Under Toxication: Another common reason for car insurance claim denial is drunken driving. It means driving the car under the influence of alcohol which is illegal in our country. In case a mishap occurs because of drunken driving a claim arising from the same will be denied.
5. Delay in Intimation of the Claim: When the accident occurs it is important to intimate the insurer as soon as possible. Check with the insurer while buying the policy about the deadline of intimation about the accident and losses associated. To make the claim intimation, if it takes more than the time predefined, chances are that the insurer denies the claim.
6. False Information: At the time of claim if any information is found to be incorrect, false, or wasn’t disclosed when buying the policy it will be denied. While buying car insurance ensure that all the information is provided correctly.
7. Missing on Car Insurance Renewal: Imagine you have a car insurance policy that expired a week back. It means you missed the car insurance renewal. In case you meet with an accident and the car incurs the damage. So when you inform the insurer about the loss, the claim will not be admissible. The reason for it is that the car insurance policy expired.

The Bottom Line

A car insurance policy is an ideal way to financially safeguard the car against any adversity. With a plethora of car insurance options available in the market, take time, understand, and then zero down. Read the terms and conditions of the policy carefully.  Protect those wheels and make the best choice.