To legally drive a car on public roads in India, purchasing suitable car insurance is mandatory. By paying insurance premiums, you rightfully anticipate your insurance company to approve any claims made throughout the policy period.
But when a claim is denied, it can be frustrating, expensive, and disheartening. Claim rejections are not uncommon in the vehicle insurance industry. While some may label the insurance company as fraudulent for denying a car insurance claim, rejections often happen because of specific clauses.
To prevent your claim from being turned down, it’s crucial to understand the reasons for car insurance claim rejections. Here are a few grounds on which your car insurance claim may be denied:
Driving Without a License/Invalid License:
Operating a vehicle without a valid or proper license, or driving under the influence, can lead to car insurance claim rejection. These actions are against the law in India, making it impossible for the insurance company to approve the claim.
Not Informing Your Insurance Company:
A common mistake is not informing the insurance company before getting the car repaired. Reporting the incident to the insurer before any repairs allow them to assess the damage, estimate repair costs, and facilitate a smoother claim settlement.
Not Paying the Premium of Your Policy:
Timely payment of the premium is crucial for claim approval. If the premium is not paid on or before the due date, the insurance company can deny or reject the claim. Paying premiums on time ensures the policy remains active.
Not Informing About CNG/LPG Kit Fitted in Your Car:
Installing a CNG/LPG kit is beneficial for mileage but must be declared to the insurance company. Failure to inform about additional kits may lead to claim rejection.
Using Your Private Car for Commercial Purpose:
If you use your car for commercial purposes despite informing the insurance company otherwise, your claim might be rejected in case of an accident.
Providing Incorrect Information:
Furnishing incorrect details to reduce the premium can result in claim rejection. Providing accurate information is crucial to avoid claim denial and ensure policy validity.
Delaying to Report the Accident:
Timely reporting of accidents is essential. Delays and inadequate documentation can lead to claim denial. Informing the insurer before car repairs is a prudent practice.
Driving Outside the Specified Geographical Area:
Claims may be denied if an accident occurs outside the geographical area defined in the insurance policy. Understanding policy terms and geographical limits is crucial.
Modifying and Including New Accessories to Your Car:
Modifications or new accessories added during the policy period must be declared to the insurer before renewal. Failing to do so may lead to claim rejection.
Disobeying Rules and Regulations:
Violating specific rules like underage or drunken driving can result in claim rejection for one’s own damage. Engaging in irresponsible behaviour like drinking and driving can invalidate the policy.
Cooperation with the claims team, providing honest information, and timely submission of required documents are essential. Non-cooperation can lead to claim rejection even after follow-ups by the insurance company.
Tips to Ensure Your Car Insurance Claim Gets Approved:
#1 Inform Your Insurance Company:
Promptly inform your insurer about any incident. Use phone calls, emails, or mobile apps for communication.
#2 Report to the Police and File an FIR:
File a First Information Report (FIR) for theft or significant accidents, especially those involving third parties with injuries or fatalities.
#3 Provide All Relevant Documents:
Submit all necessary documents to your insurer promptly. Documents like the Registration Certificate and Driving License are typically required.
#4 Have Proof of Damages:
Capture pictures of damages to your car and any involved third-party vehicles. Although an authorized person will assess damages, having visual proof can aid the claim process.
#5 Don’t Repair without Informing:
Obtain approval from your insurer before initiating any car repairs. Repairs without a prior survey by the insurer may lead to claim rejection.
#6 Don’t Increase Consequential Loss:
Avoid running the car after an accident, which could result in consequential loss. Understand that insurers cover only the initial damage, not damages caused by subsequent actions.
#7 Read the Terms and Conditions:
Familiarise yourself with the policy’s terms and conditions to know what is covered and excluded. Understanding policy details helps in informed decision-making.
Remember, insurers typically approve claims when they are legitimate. Drive safely, follow proper procedures, and purchase car insurance to safeguard both you and your vehicle.
Understanding the reasons for car insurance claim rejections is crucial for preventing potential pitfalls. By following the recommended tips and being cautious on the road, you can enhance the likelihood of a smooth and successful claims process. Remember, insurance is a valuable resource that offers financial protection, and responsible handling of claims contributes to a reliable and effective insurance relationship.