Reasons why insurance companies reject car insurance claims

Reasons why insurance companies reject car insurance claims

Know the common reasons why car insurance claims get rejected and how you can avoid them

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2 mins
01 Feb 2023

Having a car insurance policy is a prudent decision as it covers losses caused due to natural calamities, accidents, collisions, theft, fire and more. Though many insurance providers offer a seamless claim settlement process, they can also reject your car insurance claim on several grounds.

As a customer, you should be aware of the different reasons which can lead to an insurance company rejecting your claim.

Reasons why a car insurance company rejects claims

A car insurance company refuses to pay the claim amount if the policyholder violates the policy contract. Often rejection of a vehicle insurance claim can impact individuals financially. For instance, if your car is severely damaged and the insurance provider rejects your claim request, you are required to pay for the entire repair cost on your own.

Hence, it is essential to be mindful of why the insurance company denies your claim or rejects your claim application.

Here are some of the key reasons:

Asking for false claims

Any fraudulent claim against a car insurance policy can have severe consequences. If your insurer detects a false claim, your application will be rejected, and you may have to go through legal penalties.

Expired policy

Before filing a claim, policyholders must check if their insurance policies have expired or lapsed. If so, insurance companies will not approve such claims for vehicle damage.

Violating motor vehicle laws

As per the Motor Vehicles Act, everyone must abide by some rules and regulations to ensure road safety. Car insurance policies work hand-in-hand with these rules. Violating these regulations will increase the risk of accidents, adding to an insurer's liability. Thus, any infringement of these laws will lead to car insurance claim rejection.

Not disclosing car modifications

Individuals may want to modify their cars to improve performance and aesthetics. While some alterations, like safety kits, can substantially bring down their policy premium, some may increase. However, car owners must inform their insurance providers to get it updated in their policies. If not, insurers reserve the right to reject such claims on the grounds of un-notified changes.

Non-compliance to claim process

In an unfortunate event like an accident or collision, a policyholder needs to make an intimation to the insurance company to address the incident and associated damages. Every insurance company follow some claim process and provide a specific deadline to raise a claim. The insurance company will reject the application if a policyholder takes more than this predefined time to file a claim and submit necessary documents as evidence.

Things to keep in mind while claiming car insurance

Go through the following pointers to sidestep the chances of claim rejection:

  • Renew policies on time

    Every car insurance policy comes with an expiry date; thus, it is wise for policyholders to renew the policy within the predefined time. If one raises a claim against an expired policy, the insurance providers will disapprove the same.

  • Provide all the necessary documents to the insurance company

    Insurance companies initiate the claim settlement process after receiving the necessary documents. Therefore, car owners need to submit all the documents while raising a file to the insurer as evidence without fail to confirm approval.

  • Review the terms and conditions of your insurance policy carefully

    Every policyholder must thoroughly review the terms and conditions of a car insurance policy. This will help them gain insights regarding the reasons for rejecting an insurance claim.

  • Keep a proof of damage

    When you file a claim for accidental damages or injuries, the insurance provider sends an authorised claim manager to assess the damages to detect the authenticity of the same. However, it is advisable to click photographs of the damaged vehicle of both your and third parties involved in the collision to make the procedure convenient.

  • Do not repair your vehicle without informing the insurer

    If your vehicle meets with any accident and needs necessary repair and replacement services, inform the concerned insurer. As per the claim process, the insurance company will examine the damaged car at the accident spot. Your insurer may reject the claim application if you send your vehicle to a garage for repair before this inspection.

By avoiding these reasons for rejecting an insurance claim and taking preventive measures, you can avoid getting your motor insurance claims rejected by the insurance provider.

Disclaimer

Insurance is the subject matter of solicitation. Bajaj Finance Limited (‘BFL’) is a registered corporate agent of third party insurance products of Bajaj Allianz Life Insurance Company Limited, HDFC Life Insurance Company Limited, Future Generali Life Insurance Company Limited, Bajaj Allianz General Insurance Company Limited, SBI General Insurance Company Limited, ACKO General Insurance Limited, Niva Bupa Health Insurance Company Limited , Aditya Birla Health Insurance Company Limited and ManipalCigna Health Insurance Company Limited under the IRDAI composite CA registration number CA0101. Please note that, BFL does not underwrite the risk or act as an insurer. Your purchase of an insurance product is purely on a voluntary basis after your exercise of an independent due diligence on the suitability, viability of any insurance product. Any decision to purchase insurance product is solely at your own risk and responsibility and BFL shall not be liable for any loss or damage that any person may suffer, whether directly or indirectly. Please refer insurer's website for Policy Wordings. For more details on risk factors, terms and conditions and exclusions please read the product sales brochure carefully before concluding a sale. Tax benefits applicable if any, will be as per the prevailing tax laws. Tax laws are subject to change. Visitors are hereby informed that their information submitted on the website may be shared with insurers. BFL is also a distributor of other third-party products from Assistance Services providers such as CPP Assistance Services Pvt Ltd, etc. All product information such as premium, benefits, exclusions, sum insured, value added services, etc. are authentic and solely based on the information received from the respective insurance company or the respective value-added service provider or Assistance company.

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