18/04/2015
Seven reasons why your car insurance claim may be rejected
Buying a car insurance is a must and protects your economic interest in your car. However in certain conditions there can be rejection of claims.
Buying a car is a big deal. After all, it is a long-term decision and probably the most expensive monetary investment that you make after property. Needless to say, most of us love our cars and we are pretty careful about it too! Car insurance thus is the best way to safeguard your beloved.
In India, third party car insurance is mandatory, basically insurance against damage to third parties and their assets due to your car. However, almost everyone buys a comprehensive car insurance policy because damage to one’s own car can be a very expensive proposition and it’s just a practical thing to do.
Most of us don’t really know what gets covered with a comprehensive car insurance policy and end up wasting a lot of energy, time, and effort feeling frustrated when our car insurance claim gets rejected. Hopefully this article will tell you about common misconceptions that surprisingly a lot of us have around car insurance.
Before we go further, everyone must clearly understand that a car comprehensive policy covers only accident, collision, theft, damage due to natural calamities and third party liability. Other damages due to wear & tear, breakdown etc are not covered under insurance.
You might feel very safe after getting your car insured but here are seven common reasons why your car insurance claim may be rejected:
1) Here’s one common mistake, which even I have been guilty of committing. It is that we get the car repaired after accident on our own and then intimate the insurance company about the settlement. The insurer cannot trace back the accident and repair thus it is easy for them to reject the claim. One should always intimate the insurance company before getting the car repaired. An authorised personnel from their end inspects the damage, estimates the extent and cost of damage and helps you get the best deal for repair of your damage.
2) In case of used car or second hand car you may miss transferring your name in the policy copy. Remember insurance is in the driver’s name, not in your car’s name and hence this transfer of name is an important criteria after you buy your car. In such a case where transfer formalities have not been done, the policy is null and void and will not help you to settle the claim.
3) If you have installed a CNG/LPG kit and you have not covered the kit while buying the policy, you stand facing a complete claim rejection irrespective of whether the damage is related to the kit or not.
4) The driver driving the insured car at the time of accident should have a valid driving license. Moreover, if it is proven that the driver was under the influence of alcohol or drugs leads to the rejection of claim. So in the instance that you lent your car to one of your foreigner buddies without a a valid Indian licence and he crashed your car after a wild night of partying, not only do you stand a chance of facing severe legal consequences, you can also be rest assured that those damages will not be covered by insurance.
5) If you have booked your car as a private vehicle and if your car is used for commercial purpose either for carrying passengers or goods then it may lead to claim rejection.
6) You need to notify the claim within specified time. Usually it is 48 hours to 72 hours. If you fail to do so, insurance companies can reject your claim. More importantly, if you damage your car, say crash it and the engine gets damaged but you continue driving it, and it causes further damage to the car because of the driving. This is a consequential loss and the insurance company will definitely reject this claim.
7) Specific cases like car parked in a no parking zone or loaded with passenger more than seating capacity, unfortunately, a common occurrence amongst many careless Indians, can also be a cause of insurance rejection!
So keep in mind that it is extremely smart of you to buy insurance and it’s a practical investment that can save you from many unaccounted for and sudden costs, they don’t make you or your car bulletproof. Be truthful and safe, instead of being careless and reckless. Insurance companies will love you for it and helo you the most. Happy driving!
