11 reasons your auto insurance claim may be rejected

Recently, after a motorcycle accident in which the biker lost his life, the insurance company denied the claim as it was a 346cc motorcycle. Apparently, under the terms and conditions of the policy, the company was not required to pay if the capacity of the bike was over 150cc. While it could be a case of a bad sale when the owner has not been fully briefed on the police by the officer, there are various other reasons why claims may be denied. Typically, car and motorbike owners do not read the policy document and are unaware of the fine print or ignore the exclusions and scope of their policies. Here are some reasons why your claim might be rejected or not be fully paid by your auto insurer.

Grounds for rejection Insurance claims for vehicles, whether a car or a two-wheeler, are only taken into account if the damage is accidental, due to natural disasters, theft or accidental fire.

Ignorance of the policy and additional coverages: A common reason for claim rejection and grouse is that some specific damage is not covered by the policy and you have to purchase separate additional coverages for these. “For example, engine damage or loss of depreciation is not covered by the base policy and you need separate engine protections and additional non-amortization coverages for these,” explains Tarun Mathur, CBO, Policybazaar .com.

Car sent for repair: A common mistake is to have the vehicle repaired by yourself and then notify the insurer. “This is a mistake because it is difficult for the company to track the accident and the repair, which makes it difficult to assess the damage and approve the claim,” said Pankaj Arora, Managing Director and CEO of Raheja QBE General Insurance. This is the reason why you should go to the insurer, so that they not only assess the damage, but also provide roadside assistance and take the car to their partner garage.

Commercial use of the vehicle: If you bought a car for personal use, but start to use it for business purposes, the claim will be denied in the event of an accident.

Concealment or erroneous information: “If there are unwarranted disclosures or if material facts are not disclosed at the time of purchasing a policy, such as tampering with a no-claims bonus or pre-existing damage, then the claim is bound to be. rejected, ”says Rakesh Jain, ED & CEO, Reliance General Insurance. Likewise, if incorrect information is provided about the accident or the damage caused when filing a claim, it may be refused.

No insurable interest: This means that the owner has not transferred the registration and insurance to his name. In such a case, the claim will not be taken into account by the insurer.

Modifications to the vehicle: If you install a CNG kit in your car, add accessories or make any modifications to the vehicle body, you will need to notify the insurer immediately, otherwise your accident claim will not be accepted.

Policy guidelines: “If you do not adhere to the limitations of the use clause of your policy, the claim will be denied,” says Jain. So if you do not drive within the specified geographic limits or if the vehicle does not have the specifications listed in the policy, say a particular displacement, the claim is likely to be denied.

No driving license: If the person driving the vehicle is not in possession of his license at the time of the accident, the claim will be refused. In addition, he must have a valid license which has not expired and which corresponds to the type of vehicle for which it is specified. For example, if he only has the license to drive a two-wheeler but encounters an accident while driving a car, the claim will be refused.

Driving while intoxicated : Another obvious reason for denying a claim is drunk driving. Since it is illegal to drive under the influence of alcohol in India, any claims arising from an accident caused by drunk driving will be rejected.

Intimation delay: If you delay informing the insurer of the accident, your claim may be refused. The deadline is short, usually 24 to 48 hours, and you must make sure to notify the insurer within this period.

Delay in renewing the policy: If you forget to renew the policy and an accident occurs during this period, the claim will not be covered by the insurer.

Be aware of these exclusions

A basic insurance policy only covers accidental damage to the body and engine. Here’s what it typically doesn’t cover:

Indirect loss due to depreciation: Damage due to an insured party or a third party and not due to an uncertain event is not covered. “For example, engine damage from hydrostatic loss during monsoons is common. Here, the damage does not occur because of flooding or rains, but because someone has started the car in a flooded area. It will not be covered by the insurer, ”says Arora.

Voluntary deductible: “If you opt for a voluntary deductible to reduce your premium, you will have to pay the amount of the mandatory deductible plus an amount of the voluntary deductible at the time of each loss,” explains Arora.

Mechanical or electrical failure: Auto insurance policies do not cover mechanical or electrical problems.

Consumables: Items such as engine oil or lubricants are not covered by the base policy, nor are plastic parts or tires. Wear and tear: Any damage caused to the vehicle in the normal course of its use, for example worn tires or inner tubes, is not covered.

Key / lock replacement: Cars today have technologically advanced keys and keyless locking systems, which can be expensive to replace. It will only be covered if you have additional coverage for the same.

Back to the invoice: A basic policy will only give you the declared insured value (due to depreciation) of the car, which is less than the car’s road value. You can close the gap with additional coverage.

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