Why your car insurance claims can get rejected
- A car insurance can get rejected due to several reasons that can be avoided easily with little caution.
- Drunk driving, driving without a licence, false declaration, fraudulent claims can lead to a rejection of insurance claim.
When we buy a car insurance policy, we come across several terms and conditions mentioned in the policy documents. These terms and conditions state what is covered under the policy, what is not and what could result in the rejection of a claim.
Usually, we tend to ignore reading those terms and conditions while purchasing the policy. But those small details often provide important information. It is always recommended to read the policy documents carefully to get the optimum benefit out of a car insurance policy.
Ignoring these small details can result in the rejection of a claim when required. This means the car owner might have to pay a hefty amount of money from his or her own pocket despite having a car insurance policy for covering the damage. Also, a claim rejection can hurt the car owner's claim reputation with the insurance company in future.
Here are some conditions that could result in the rejection of an insurance claim.
Missing insurance renewal
Renewal of car insurance policy on time is important to stay under the cover of the plan. Otherwise, any loss during the lapse in delayed renewal of the insurance policy can result in the rejection of the claim. The insurance company will deem the car uninsured for that period unless the policy is renewed on time.
While buying an insurance plan the buyer has to declare the purpose of use. He or she has to inform the insurance company whether the car is meant to be used as a taxi or for commercial purpose or as a private vehicle. In case the car is damaged due to an accident and it is found that it was being used as a taxi, despite being declared as a private vehicle, the insurance company can reject the claim. In this case, the breach of policy condition becomes the reason for claim rejection.
Modifying a car with fancy gadgets is a strict no no if you don't want your insurance to be rejected. While purchasing a car insurance the details of the vehicle such as colour, make, engine etc. needs to be declared. In case a modification is made to the stock vehicle and it is not intimated to the insurer, the insurance company might reject the insurance claim citing unnotified car modification. Hence, if you really want to modify your car, it is best to notify the insurer about that.
Drunk driving is a serious legal offense and can lead to criminal charges if caught. It can also result in rejection of insurance claim in case it is found that the driver was under influence of alcohol and the vehicle was damaged by him. Also, in case of a third-party claim as well, the insurer will not cover the expense because of drunk driving issue.
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It is often seen that some people try to squeeze out money from the insurance company by making a fraudulent claim. A false claim is highly likely to get rejected by the insurer if found non viable.
Driving without a driving license
Driving a car without a driving licence is a serious legal offence and leads to criminal charges. This is not only a legal offence, but results in rejection of insurance claim as well. If it is found that the vehicle was involved in an accident and the driver was a minor or had no driving licence, the insurance company reserves the right to cancel the claim.