Reasons Why Auto Insurance Claims Are Rejected


It is important to declare the details of the car, incorrect disclosures may result in the claim being rejected

When we choose the policy, we meet the different conditions in the policy documents under which insurance claims can be rejected. But soon after purchasing a policy, we tend to ignore or forget these little details. However, it may come as a shock to you when your application is rejected. Therefore, it is always wise to read the terms and conditions of your policy. A history of claim denials can also damage your reputation with your insurer in the future. So here are the conditions under which your auto insurance claims can be dismissed.

  • Car modification: When we buy insurance for our car, information about brand, color, engine should be declared. Therefore, if we want to make any changes and include additional accessories to the vehicle, it is important to let the insurance provider know. If not, they might dismiss the claim on the grounds of unreported car modifications if you are claiming accident damage to the modified car.

  • Lack of insurance renewal: Renewing insurance on time is important as any loss incurred during the expiration of the renewal deadline may result in the claim being rejected. For example, in the case of expired insurance coverage, if the car encounters an accident before the insurance is renewed, the claim will be rejected because the car is considered uninsured.

  • Driving without a driver’s license: This is one of the cases that can lead to multiple problems as it is against the law. In the event that you experience an accident and do not have a valid driver’s license, the insurance company reserves the right to reject the claim initially.

  • Drink and drive: Driving while intoxicated is a legal offense, and will result in criminal charges if caught. In the event that you are driving and hit a vehicle causing a breach in the car and a third party files a claim, your insurer will not cover the cost of third party coverage if it is determined that you were in. intoxicated while driving. Moreover, if you file a claim for damages for your car, this will also be rejected.

  • Driving before the transfer of ownership: If you are buying a used car, it is important to change the owner immediately. For example, if you drive a used car in which you have not made the transfer of ownership and an accident occurs, the insurance company may reject the claim on the grounds that it is not legally transferring the ownership. ownership through the RTO. In addition, any legal action filed for the incident will be the responsibility of the current owner of the vehicle.

  • Erroneous statement: When you take out an insurance policy, you are declaring the purpose of the use, whether it is for a taxi or for private or commercial use. If you damage your vehicle and file a claim for own damage, and use your private vehicle as a taxi during the incident, the insurance company may reject the claim for non-compliance with the policy condition. .

  • Fraudulent claim: Your insurer may deny coverage if it finds out that a false statement has been made. For example, your car has been having trouble starting the engine for a while, but before you got it fixed you hit a pole and nicked the car. If you file a claim that the accident resulted in engine problems, it may be considered a misleading cause of loss.

It is a good idea to be cautious and not to make any mistakes that could result in the rejection of an auto insurance claim. It is important to state the details of the car, the purpose of use, and any additional modifications you may make to the car, as incomplete or incorrect disclosures may result in the claim being dismissed. Keep in mind that when making a claim, the insured must be transparent with the insurer to increase the chances of having a claim approved. This is good practice, to be honest with your insurer, as it can help you understand if your claim will be approved and, if not, why.

The author is Technical Head Claims at Digit Insurance

DISCLAIMER: Opinions expressed are those of the author and Outlook Money does not necessarily endorse them. Outlook Money will not be responsible for any damages caused to any person / organization directly or indirectly.

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