Top Reasons Why Your Car Insurance Claim Could be Rejected

In India, it is mandatory to insure your car with at least a third-party liability cover as per the Motor Vehicles Act. Car insurance comes with a number of exclusions based on which your insurance claim can be denied. A few of the top reasons on the basis of which your claim can be denied are:

• Invalid driver’s licence

If you or someone else was driving your car without a valid licence when the accident took place, your insurance claim is likely to be denied.

• Regular wear and tear of the vehicle

If your vehicle exhibits the regular wear and tear due to its aging and you raise a claim request for the same, your insurance claim will be denied as no insurance policy covers the regular wear and tear of a vehicle.

• Rash driving

If the accident took place as a result of your rash driving, you raising an insurance claim will be futile as your insurance claim will certainly be denied.

• Underage driver

If you or the person driving the vehicle was underage when the accident took place, your insurance claim will be denied.

• Driving under the influence of intoxicants

If you or the person driving your vehicle was under the influence of alcohol, drugs or other such similar intoxicants during the time of the accident, your insurance claim will be denied.

• Vehicle driven by an unlisted driver

If your vehicle was being driven by a person you haven’t declared in your insurance policy at the time of policy issuance, your insurance claim will be denied.

• Telematics data shows driver’s fault

Telematics is the technology oriented readings of your vehicle at any given point in time. A telematic device is installed in your vehicle which reads and tracks your vehicle's speed, acceleration, distance covered, etc. These readings are used by a few of the insurers to check if any law was broken by the driver/policyholder when the accident took place. If the insurers do find out that the driver/policyholder caused the mishap as a result of breaking any traffic rules, the insurance claim will be denied.

• Declaring incorrect information

If you have provided incorrect information at the time of policy issuance in order to get discount on the insurance premium, and if the insurer finds out that you have declared relevant information incorrectly, your claim request will be denied.

• Vehicle inspection not done Vehicle inspection is mandatory, it is to be done by the insurer before issuing the insurance policy. Not having your vehicle inspected at the time of policy inception will lead to denial of your claim.
• Use of commercial vehicle for personal purpose

If you had declared at the time of policy issuance that your vehicle was to serve commercial purpose but was found to be used for personal purpose at the time of a mishap, your claim will most definitely be denied. The same applies for when a private vehicle is used for commercial purpose.

• Theft/Accident due to negligence

If your vehicle was stolen/involved in an accident due to your negligence such as parking outside without proper security, your claim will be denied on the grounds of your negligence.

• Security devices not installed

Some of the insurers deny claims based on the fact that the vehicle is without any ARAI approved security devices. It is safe to install ARAI approved devices in your vehicle.

• Fraudulent and inflatent claims

If you happen to stage an accident to get the insured amount from the insurer, in case the insurers find out about what you have done, your insurance claim will be denied and could also lead to cancellation of your insurance policy.

• Getting your vehicle repaired before informing the insurer

If you proceed to get or have your vehicle repaired after a mishap, prior to informing the insurer about mishap, your claim is likely to get denied. It is vital that you inform your insurer about the mishap, raise a claim request and wait for the insurer’s approval for vehicle repair before getting it repaired.

• Informing the insurer post the approved timeframe

You have to inform the insurer within the allotted time frame post a mishap. The ideal time usually allowed by most of the insurers is within 48-72 hours starting from the time of incident.

• Not transferring the insurance policy to your name

If you have purchased the vehicle but have neglected or forgotten to transfer the existing car insurance policy to your name, your claim raised at the time of a mishap will be denied. The name on the vehicle documents and insurance policy document should match in order for you to receive your claim settlement.

• Consequential loss

If your vehicle already has a pre-existing condition, like weak engine, coolant leakage, etc. and you decide to use the vehicle further without getting the existing conditions fixed, your insurance claim will be denied by the insurer. You can not raise a claim for your vehicle's repairs that was a consequence of your continued negligence.

• Not Informing your Insurer about the removal or installation of CNG/LPG kit

If you have removed or installed a CNG/LPG kit in your car, you have to inform your insurer as this is a premium bearing endorsement for which you will have to pay extra premium. Not declaring this at the time of installation/removal to the insurer will lead to denial of your motor insurance.

• Mechanical or electrical breakdown

Car insurance usually doesn’t cover mechanical or electrical failure of your vehicle. Raising a claim request for the mechanical or electrical breakdown of your vehicle will definitely be denied by the insurer.