Reasons why insurance companies reject car insurance claims

Know the common reasons why car insurance claims get rejected and how you can avoid them
Apply Now
Reasons why insurance companies reject car insurance claims
Apply Now
2 mins
19-June-2024

Having a car insurance policy is a prudent decision as it covers losses or damages caused to the car. The policy covers damages 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 that can lead to an insurance company rejecting your claim.

Having a car insurance policy is a prudent decision as it covers losses or damages caused to the car. The policy covers damages 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 that 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, your car gets severely damaged, and the insurer rejects your claim request; you will have to pay for the entire repair cost.

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. Your application will get rejected if your insurer detects a false claim, 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 on the lines of 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 rejection of your car insurance claim.

Not disclosing car modifications

Many car owners modify their cars to improve performance and aesthetics. While some additions like safety kits substantially bring down your policy premium, some may increase. Policyholders need to inform the insurance providers if they want to get coverage for the expensive modifications made to the car. If not, insurers will not provide coverage for the damages caused to the added features and reject the claim request, if made any.

Non-compliance to claim process

In case of accident or collision, policyholders must immediately inform the insurance company about the incident and damages caused to the car. Every insurance company follows some claim process and provide a specific deadline to raise a claim. The insurer will reject the application if you do not file the claim and submit necessary documents as evidence within the predefined time.

Also check: mparivahan App

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 insurer sends surveyor to assess the damages and verify the claim authenticity. Keep photographs of your damaged vehicle as well as of the third party, if any. It will help in your claim process.

  • Repair your vehicle only after 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.

You can avoid rejection of your motor insurance claim if you follow the above tips.

Disclaimer

*T&C Apply - 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, ACKO Insurance Company Limited, ACKO General Insurance Limited, ICICI Lombard General Insurance Company Limited, HDFC ERGO General Insurance Company Limited, Tata AIG General Insurance Company Limited, The New India Assurance Company Limited, Cholamandalam MS General Insurance Company Limited, Niva Bupa Health Insurance Company Limited , Aditya Birla Health Insurance Company Limited, Manipal Cigna Health Insurance Company Limited and Care 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. Tax laws are subject to change. BFL does NOT provide Tax/Investment advisory services. Please consult your advisors before proceeding to purchase an insurance product. Visitors are hereby informed that their information submitted on the website may also 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., Bajaj Finserv Health 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 Assistance service provider company.

Note – While we have made all efforts and taken utmost care in gathering precise information about the products, features, benefits, etc. However, BFL cannot be held liable for any direct or indirect damage/loss. We request our customers to conduct their research about these products and refer to the respective product’s sales brochures before concluding their sale.

Premium indicated is exclusive of taxes for third party coverage of four-wheeler within 1,000 CC, between 1,000 and 1,500 CC and exceeding 1,500 CC. Premium may vary based on the specification of the vehicle.