Grounds on which insurance company can reject your car insurance policy claim

policy

Your car is one of your priced possessions that you invest your hard-earned money in. After all the real estate and other financial investments, your car is your single biggest asset that you strive hard to take care of. Over the time, this 4 set of wheels becomes your second home, which like family requires your proper care and attention. Hence, insuring it from any kind of damage is of utmost importance.

However, your responsibility doesn’t end thinking that you’ve got a car insurance policy which will insure your vehicle from accidents, collisions, damage from natural calamities, theft, and third party claims. In fact, you need to be responsible after buying that too, as it can lead to rejection of claims.

What if you come to know today that in spite of having a valid car insurance policy, your car company won’t pay for the damages caused due to an accident? What if they have denied your application only become of your own negligence? Disturbing, right? Yes, we relate to your pain.

So to save you from the horror of car insurance claim rejection, here we help you understand the grounds on which your claims can be rejected.

Driving under the influence of alcohol or drugs:

If your insurance company finds out that you were under the influence of drugs or alcohol at the time of the accident, then it has the right to reject your claim straight away. You cannot negotiate in this regard and no court will hear you. Also, and a tough criminal action can be initiated against you.

Driving without a valid license:

The insurance company is liable to reject your claim if you or the person driving the care does not have a valid driving license. Hence, it’s important to be wary not just about the renewal of the policy, but also about the renewal date of the license too. Also, ensure that you don’t allow any person without a valid driving license to drive your car.

Using private vehicle for a commercial purpose:

If you are using your private vehicle for commercial purpose i.e. as a passenger vehicle or a goods carrier vehicle, then the insurance company has the right to reject your claim.

Installing CNG/LPG kit without informing:

Your insurance company would sure appreciate your step of installing CNG/LPG kit as your step towards protecting the environment. But doing so, without informing them would welcome claim rejection as the installation of these kits requires an additional premium.

Not transferring your name in your insurance policy copy after purchasing a used car:

Call it your negligence or forgetfulness, but not getting the car insurance policy transferred on your name  will give the power to the insurance company to discrete your claim. While buying a used car, always remember to transfer your name on the policy papers as the policy will belong to the previous car owner only.

Failure to prevent theft:

Your car is your own property and if the insurance company finds out that your negligence has led to the theft of the vehicle, then they can reject your claim. Hence, the insured should always take all the reasonable steps to prevent the car from any damage or theft.

Consequential loss:

In simple words, a consequential loss is a type of damage arising out of a certain action taken by the policyholder. If your car enters a water-logged area and you damage it while continuing to drive it, then this won’t be covered by the insurance company. Though this could be an unintentional act, a mistake or an emergency, but the insurance company won’t be liable to entire your claim for such situations.

Getting the repairs done before informing the insurer:

Now we understand that you might not call your insurance company while you are in an emergency situation and would get your car repaired on your own. But your insurance company won’t allow you to do this as they would want you to first inform them about it. This is because they can send their authorised personnel to repair your car. But, if first, you get your car repaired and then you call them, then be ready for your claim to be rejected as the insurer won’t be able to trace the accident and repair.

Informing the insurer too late about the damage:

Your insurance company doesn’t tell you to call them in the next 2 minutes of the accident. But they have a limited timeframe of 48-72 hours under which you need to inform them about the accident or any other damages caused.

Damages caused due to mechanical or electrical breakdown:

If your vehicle is damaged due to some electrical or mechanical breakdown and not due to some external impact, then the insurance company has the right to reject your claim.

We know that you buy a car insurance to financially protect yourself and your car. But there may be circumstances under which your claims can be rejected. So always keep in mind about the above-mentioned grounds to ensure a swift and hassle-free claim process.

Leave a Reply