Top Reasons for Two Wheeler Claim Rejection

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If it is important to know how to make a two-wheeler insurance claim for a policyholder, then it is equally important to why under certain situations, claims are denied. It is usual for an insurance company to deny a claim by insured and while that is common, we tend to think that it is being done on purpose and blame the insurance company for rejecting or canceling the claim application. This is why it is important to read the insurance policy carefully before signing and not end up in disappointment.

Two wheelers today cost a bomb to buy. So it is vital that we ensure to insure it at all times. All though having a two wheeler third-party liability cover is mandatory, having a comprehensive two wheeler insurance will help in times of accidents, theft, damage, etc. Since the coverage is vast, the premium for this policy is higher.

A claim for an insurance policy is made on two instances, when the policyholder has already paid the repair bill and want a refund for the same or the damage is done and the insured wants the insurer to take care of the bill payment for the repair. In both these circumstances, it is completely possible that the insurance company will reject your claim. One can also opt for not making any claim and pay for damages themselves and enjoy no-claim bonus reward at the time of renewal, but know that making a claim is expensive and this means the no-claim bonus will freeze for that year.

So following are few reasons for rejection of a claim;

1. Invalid or expired Driver’s License:

If the insured bike was part of an accident and has been damaged, he/she can claim insurance only if they have a valid Driver's’ License and this is mandatory requirement under Motor Vehicle Act of the law. If he/she is driving a geared vehicle, and only has license for LMV (Light Motor Vehicle) or the license has expired, the claim under such situations will be denied. So therefore, having a valid two wheeler insurance policy is not enough, having proper DL is also equally important for the type of vehicle one is driving.

2. Driving while intoxicated:

Drunk and drive or driving under the influence of drugs is strictly prohibited. While intoxicated if the insured bike owner was driving and has met with an accident or has caused own damage and to the vehicle or has hurt the third-party, the insurance company has all rights to reject your claim immediately. The insured could also be criminally punished for such acts.

3. Delay in intimation:

Not informing about the incident such as accidental damage, theft, third-party damage, etc. to the insurer immediately, can also lead to cancellation or investigation of the incident of the claim as mentioned in the policy. If the policyholder intimates the insurer about a situation immediately, the insurer will be able to help him/her with required assistance. In the event of theft and third-party damage, the insured will have to file a complaint with the nearest police station to record the damage.

4. Incorrect No-Claim Bonus:

No-claim bonus is a reward given to the policyholder as a discount by the insurer for not claiming the insurance and for a good and safe driving record. The discount percentage for NCB is a minimum of 20% and a maximum of 50%. For renewing the policy, the insured should declare correct value of the vehicle and accurate policy details along with previous claims if any. Before deciding on the premium, the insurer will investigate all the information given by the policyholder. If he/she has given wrong information about previous claims and has claimed for NCB, the insurance company will reject the claim immediately and this can also affect the premium amount.

5. Incomplete insurance transfer:

If one is buying a used vehicle from a seller, he/she should make sure that the insurance is also transferred along with the ownership of the two wheeler. This process should be complete within 15 days of the ownership transfer. If the seller does not have an insurance or it is expired, one can either buy a fresh policy and register the new vehicle under it or can renew the existing policy by transferring it to the name of registered owner of the vehicle. Failing to do so, will lead to rejection if the new owner is claiming the insurance. This also means that the no-claim bonus is not valid to the new owner if the transfer is incomplete.

6. Misinterpretation of the incident:

The policy holder should provide accurate information about the damages caused to the vehicle and the details of the incident and third-party injuries if any. To get higher claim amount, if the insured provides inaccurate or false details by concealing the information, can lead to claim cancellation.

7. Triple riding and overloading:

A two wheeler vehicle has a seating capacity of 2 person. Riding with the third will compromise the safety of the vehicle and the person who are seated. The driver can easily lose control over the bike and end up causing an accident and hurting the pillion riders as well. Claiming for such incidents will be denied by the insurance company as the insured person has already violated the traffic and safety rules set by the government. Bike by nature is not a utility vehicle. Therefore using it to carry goods for commercial purpose by overloading the vehicle and ending up damaging the bike is a punishable offense. The bike insurance policy holds good only if the insured vehicle is used for the purpose that is mentioned in the schedule certificate of insurance and Motor Vehicle Act.

8. Limitation with coverage:

A two wheeler insurance policy is a peril policy which means the policy will provide you cover only for the risks mentioned in the policy. Generally motor insurance cover 10 such perils. Therefore general wear and tear, mechanical breakdowns, electrical problems, fiber body parts, tyre damage, etc. are not covered under the policy and one cannot claim for the same damage.

9. Negligent acts:

Leaving the keys in the vehicle, or not ensuring the vehicle is locked, or parking in ‘no parking space’, etc. are considered as negligent acts. In these cases, the chances of the vehicle being stolen are higher especially in a public space. Claiming after such an incidence will not considered by the insurance company and the application will be rejected.

10. Not Registering:

All vehicles that are traveling on Indian roads should be insured with proper insurance according to the Motor Vehicles Act and as regulated by the IRDA. Without registering with proper RTO, one cannot claim the insurance if the registration is faulty or incomplete.

According to the statistics given by the IRDA, a majority of the insurers reject the claim for valid reasons, and it is difficult to convince the general public on the same. While it is advisable that you chose the insurer with higher Claim Settlement Ratio, please note that not every claim made by you will be accepted without adhering to the mentioned clauses.

These are some of the top reasons why the insurance company rejects your claim. So the next time you blame the insurance company for not considering your claim, read the clauses carefully to understand the limitations and exclusions from an insurance policy. For further clarity on these clauses, contact your insurance provider for more information.