What Are The Factors That Will Lead To A Rejection Of Your Car Insurance Claim?
The Motor Vehicles Act makes motor insurance a regulatory norm. Every vehicle is required to have at least third-party insurance cover. Although it is in the interest of the policyholders, it is often regarded as an additional expense. This isn’t true as car insurance cover comes handy for repairs, damages or accidents.
Your policy coverage depends on the type of insurance cover you opt for. To protect only against liabilities of the third person, a third party car insurance cover can be sufficient. But if you wish to increase your insurance cover, a comprehensive plan can come handy. It extends its scope to include own damage as well as events like theft, natural and other man-made perils.
There are some cases where your claim may be rejected by the insurance company. Let us look at the factors that may lead to a refusal by the insurer –
#1 Making fraudulent claims
‘Uberrimae Fidei’ which means ‘utmost good faith’ is the underlying principle in a contract of insurance. Insurance is not a tool for making profits but to cover for uncertain future loss. In case of a fraudulent claim, the insurer can reject it. Moreover, there can be legal implications too.
#2 Modifications that are not reported
Often car enthusiasts modify their vehicles to tune it to their liking. It can either be an aesthetic or a performance modification. Since aesthetic and performance modification increases your premium, the insurance company should be intimated for any such changes. Thus, if you skip informing these changes to your insurer, it can lead to rejection of your four wheeler insurance claim.
#3 Commercial use
No claim shall be made if a vehicle having private insurance policy is used for commercial purposes. Your policy exclusion specifies it and should be noted at the time of purchase. Commercial vehicles have a separate insurance cover.
#4 Lapsed Policy
A lapsed insurance policy is equivalent to no insurance policy. Even if there is a single day’s delay in renewing your insurance plan, your policy becomes lapsed. So, to avoid such events of missed renewal dates, it is advisable you set a timely reminder before its expiry. You can alternatively opt-in for reminders that are sent by your insurer via email or text messages.
#5 Consequential Loss
Damages to your vehicle due to an already existing damage are termed as consequential loss and can lead to rejection by your insurer. It is particularly observed in the case of an engine where different parts are interdependent and ignoring fixing a specific part can further damage others as well.
#6 Claim against exclusions
Every car insurance policy specifies certain events that are outside its purview. These events are termed as exclusions and are mentioned in your policy document. If you raise an insurance claim for these events, the insurer is bound to reject it. So make sure you are thorough with the policy terms to avoid such rejections.
#7 Acts prohibited by the Motor Vehicle law
The Motor Vehicles Act makes it illegal to perform certain acts like driving under the influence of alcohol and other intoxicating substances, driving without a valid license and more. If your claim application is found with these conditions, it is rejected by your insurance company.
These are some of the factors that can lead to rejection of your claim and must be avoided at any cost. To conclude, familiarise yourself with the above situations and also the exclusions mentioned in your policy. It will help you ensure a hassle-free claim process and maximum coverage in case of an accident or damages.