We all know that we are living our day and night full of uncertainties and accidents can happen at any time anywhere. If You are using any car then you may need a car insurance claim anytime.
Suppose Mr. A was going somewhere and his car got damaged in an accident. Now what will he do? Obviously, he will file a claim from his insurance company. But after some time of investigation the company rejected the claim. Now he was shocked?
He was surprised there was a mistake from his side. But now it is too late. Below are the points which will help you to understand the reasons for rejection in a motor insurance claim:
1- No Valid License or No License
This is the most important reason which you should always care about. If you drive your car without a valid license or without a license at the time of the accident then your insurance claim may get rejected.
Always check that the driving license is valid while driving. It’s not expired and you are eligible for the vehicle which you are driving. Driving license should be valid in India because other country driving license may not be valid in India.
Sometimes we give our vehicle to our friends, relative to use it. Whenever you give your vehicle to another person for use then be careful and check it that the person is having a valid driving license.
A single mistake can give you a huge dent in your pocket. Ensure that you have a proper driving license while driving the vehicle on Indian roads.
2- Influence of Alcohol or Drug
The second most important reason for the rejection of the car insurance claim is drunk and drive. Company does not entertain your claim if you are in the influence of alcohol or any drugs while driving the vehicle.
The influence of alcohol or drug makes you incapable to drive the vehicle safely. The company will reject your motor insurance claim if found that you were driving the vehicle in the influence of alcohol or drug at the time of incident.
Many times, it is noticed that people go to parties or bars and drink alcohol. After returning to home they drive the car or bike by own. This is not correct because it increases the chance of an accident on the road.
It may put you, yourself, and third-party all-in danger. So, avoid this situation always use alternate travel methods when you are drunk. Always avoid drunk and drive. It is not safe.
3- Negligence Behavior
Sometimes a small ignorance cost us a huge amount. Insurance companies also reject your car insurance claim on your negligent behavior towards your vehicle and driving.
For example, if you park your car in no parking zone or you forget your key in your vehicle. The company count it as your negligent behavior and the insurer may reject your claim if any theft or accident happens.
So always be careful to avoid any such kind of mistakes. Please avoid to park your vehicle in no parking zone, don’t forget your key in-vehicle, Please close the door properly and lock it properly.
4- Policy Ownership is Different
Mr. A purchased an old car from his friend Mr. B. He transferred the RC in his name but still, insurance is running in the name of Mr. B only.
After some time his car got damaged in an accident and he filled claim of Rs.80000 from his insurance company. He was shocked that his car insurance claim was rejected. The company rejected the claim because the car was in the name of Mr. A but insurance policy was running in the name of Mr. B.
Ownership of insurance policy and car both should be in the name of the same person and which was not in the above example.
So, whenever you purchase an old vehicle from anyone then please transfer the car ownership and insurance both in your name immediately. If insurance of vehicle is expired the purchase new insurance.
5- Use of Personal Vehicle as Commercial
If you are using your private vehicle for commercial activity and accident happened then you are not supposed to get your insurance claim.
If You have purchased an insurance policy for private car and company has taken the premium according to the tariff rate of private car insurance. The company expects that you will not use your car for commercial purposes because the tariff of commercial vehicles is different.
So, in case of using your private car as a commercial purpose and any claim arising out then the company will not entertain the insurance claim.
It is advisable to avoid commercial use like for ferrying passengers or for commercial loading purposes.
6- Delay in Intimation of Claim
A long delay in intimation of an incident may be one of the reasons for the rejection of your motor insurance claim. Always report your claim immediately or within the time frame given by your insurer. Make a thumb rule to report your incident as soon as possible.
The company may require on spot investigation and other formalities to understand the loss and exact situation of an incident.
Please don’t do any kind of delay to intimate to your insurance company. Company give you proper guideline while purchasing a policy for your vehicle.
7- Consequential Loss
What is consequential loss? Suppose you are going somewhere and your car front bumper got damaged and the left door is also broke down in an accident. But you didn’t tow the car and also not informed to your insurer however you drive it up to the garage for repair.
Now due to driving it up to the garage the engine of the car also gets damaged and rear bumper also broke down.
In this case damage of engine and rear bumper is a consequential loss because ideally it was not damaged on the spot when an accident happened. Engine and rear bumper damage due to driving it to the garage.
So, Company may reject the claim for consequential damage and may not pay the claim of the engine and rear bumper in the above case
8- Wrong NCB Declaration
When you do not file any claim in preceding policy year then on renewal insurance companies provide a reward that is called NCB (No Claim Bonus). It’s a discount which you get on your basic premium.
Never provide any wrong details of your claim status. If you have taken any claim in the previous policy then please mention it clearly and do not avail discount on behalf of no claim bonus.
Suppose you give the wrong NCB details to the company. After verification of it your insurer gets found that you have taken the wrong No Claim Bonus discount.
The first company will send you a recovery letter. If you fail to pay it within the time limit then the company will reject your insurance claim if filled any or may cancel the policy.
So Please provide correct NCB status while taking policy for your vehicle.
9- Expired or Lapsed Policy
One day Mr. A was going to his office and his car gets damaged in an accident. He filled the claim for the damage but he got to know that his claim rejected by his insurance company.
When he checked the reason for rejection, he found that the policy has lapsed because he didn’t renew it.
I hope you will not do this type of mistake. Always renew the policy on time or before time. A small negligence can give you a big monetary burden.
Double-check your policy renewal date. Insurance companies also send you a renewal notice and other reminders to pay the renewal.
10- Beyond Geographical Limit
The insurance policy you purchase for your vehicle in India has a certain geographical limit to use. Companies do not cover any claim arising out beyond the limit of geographical area.
For example, your policy is valid for India, and any claim arising out in Pakistan, Nepal then the company will not pay you any claim for it. Always avoid using your vehicle beyond the geographical limit.
If you have any urgent requirement to go in a nearby country then take a prior approval and endorsement from your insurer. Possible you need to pay some additional premium for the extra
11- Repairs of Vehicle Without Intimation to Insurance Company
If you have repaired your car without intimating to your insurer then maybe your motor insurance claim gets rejected. If you inform the company later then the company would not be in a position to investigate the incident details and spot properly.
The company expect that whenever any mishap or incident occurs, first you will inform them then after you will get it repaired as per requirement. So, don’t do any delay in informing your insurer and do not try to first repair it and then intimate to the insurer.
12- Up-gradation in Vehicle
After purchasing the policy If you have done any up-gradation like CNG, LPG, etc in your vehicle then please intimate it to the company and endorse it in your policy.
If you will not endorse the same then company may reject the claim if arising out.
Claim will be rejected either it is related to the up-gradation or not. Endorsement of any changes in vehicle would be good for you.
13-Filling One Claim for Two Separate Damages
This is a very important point to understand. Suppose, one accident happen three months back and your car front bumper got damaged. The second accident occurred two days back and the rear bumper got damaged. Now you are filing a claim for both the bumper at the same time.
Your insurance company may reject the claim of the front bumper and pay only for the rear bumper. Surprised? But it is true. You are supposed to file the claim at the time of the incident only not three months later.
Every company has its time frame to file the claim and you should file the claim within the time limit.
If any damage occurs in the vehicle then intimate your company and file the claim immediately, please don’t wait to file the claim with another damage in the future.
14- Extreme Condition of Vehicle or Not Roadworthy
Please don’t drive your vehicle if it in extreme condition and not in the condition to use it. If your car is in mishap condition, or there is any other problem and not ok for use then please do not drive.
Because if you are using it in this condition and any incident arising out then the company may reject your claim. Take the alternate travel method. First you make the vehicle in the ok condition then drive it.
15- Availed Anti Theft Discount but Device Not Installed in Vehicle
Usually insurance companies provide you a discount if you have installed an anti-theft device in your vehicle. You take this discount if you really have installed the device. If you don’t have installed the device please do not take this discount on this behalf to only reduce the premium.
Because if you have taken the discount without having the device then your theft claim may get rejected. Anti-theft device must be approved by the Automobile Research Association of India (ARAI)
16- Reckless Driving and or Violation of Traffic Rules
What is reckless driving? Driving the vehicle in the wrong direction, over speeding, and or violating traffics rules is called reckless driving.
The company may reject your claim if any accident happens in this scenario also. Try to follow the traffic rules and drive safely.
17- Fraudulent Claim
There are many cases were found that claim was a fraud. If anyone files a fake claim then the company will also reject it.
Fraudulent claim can be like – someone doesn’t have the vehicle in real but he took the insurance on behalf of fake registration numbers or some forgery in documents etc
18- Information of Accessories
If you want that your insurer provides you the claim for the accessories also. Then you have to mention it while taking a policy. It may cost you an extra premium to cover it.
But if you have not mentioned it in your policy then the company will not pay any claim for the accessories. Accessories can be anything like music system etc.
19- Incorrect Information About Incident
Always provide the correct details of the incident. Do not misguide or give any wrong details to the insurer. If the company found any mismatch in actual facts and statements then your claim may get rejects.
A small wrong detail can give you huge monetary dent. You should do proper and complete documentation regarding any claim and give complete details.
20- Wrong Details In Policy Maybe the Reason of Car Insurance Claim
Claim rejection reason maybe your information also. Always provide correct details at the time of buying a policy
Provide correct registration number, engine number, chassis number, LPG or CNG details, and other required details. Please do not give the wrong claim status of the previous policy. Wrong details can be the reason behind rejection or delay of claim.
Please also provide correct personal details, Nominee details in your motor insurance policy.
Mr. A has a commercial loading vehicle and the loading limit of that is 40 ton. But one day he was going to deliver some goods to a fruit company. But on the way vehicle gets damaged in an accident.
Mr. A filed the claim but his claim was rejected. When He checked the problem then he found that claim was rejected due to loading the goods beyond the limit.
Insurance companies may decline the claim if you load the goods beyond the limits. So, do not overload the vehicle if you want the claim paid by the insurance company.