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Reasons Why Insurance Companies Reject Car Insurance Claims?

Insurance Claim Denials: Overview

In India, individuals owning a car must have third-party insurance to ensure their vehicles are road-legal. Apart from this, one can also avail of extensive financial coverage by opting for a comprehensive car insurance policy. As per car insurance claim rules, when a car owner registers a claim with their respective insurance provider, it can be rejected or approved for several reasons. Read on to know more about it.

Let’s explore the reasons why a car insurance company rejects claims

Usually, filing claims for car insurance can be complicated as insurance companies do not guarantee approval of every claim application. As already stated, these claims can either be rejected or approved depending on specific car insurance claim rules.

A car insurance company refuses to pay the claim amount if policyholders violate or breach 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.

Asking for false claims

Individuals cannot make any fraudulent claims with the insurer as it can have significant consequences. If your insurance company finds a false claim, they can immediately reject an application. In some cases, it can land policyholders into legal trouble as well.

Expired policy

As a vehicle owner, one must raise a claim against a valid insurance policy. If the insurance policy has lapsed or expired, the insurance company will not honour the claim for vehicle damage.

Violating motor vehicle laws

Vehicle insurance works hand in hand with the rules and regulations of the Motor Vehicle Act. There are rules and regulations that individuals need to follow to maintain safety on roads. Suppose policyholders violate the motor vehicle laws, the risk of accident increases, thereby increasing an insurer’s liability. In such cases, a policy provider may decide to reject an insurance claim following an inspection.

Not disclosing car modifications

After purchasing a vehicle, one may want to perform some modifications to improve its performance, driveability, and appearance. However, some modifications may increase the premium, while installing any safety kit can significantly reduce the premium. Irrespective of the mod, one needs to keep the insurance provider in the know and update the policy. If not, a policy provider may not agree to reimburse any expenses.

Non-compliance to claim process

Every motor insurance company follows a particular claim process. Vehicle owners must inform their insurance company about an accident and submit necessary documents and evidence in a specific timeframe. Individuals who do not follow the claim process specified by the insurer and do not cooperate with the surveyor, the claim manager, or the claims department of a policy provider, then a motor insurance company will reject a claim application.
When individuals know about the car insurance claim rules, they need to keep certain points in mind to avoid rejection of claims.

Things to keep in mind when claiming for car insurance

  • On-time policy renewal
    Vehicle owners are required to renew car policy within the stipulated tenor. As already mentioned before, one can’t raise a claim request if the policy has expired or lapsed. Thus, individuals must renew their motor insurance policy on time to avoid rejection.
  • Provide documents to the insurance company
    Individuals need to provide all the essential documents to the insurer without delay. An insurance provider will initiate the claim process only after getting the necessary documents.
  • Analyse the terms and conditions of your insurance policy
    After getting the policy document, it is advised to go through the terms and conditions of the policy. It will allow individuals to understand the inclusions and exclusions to avoid rejection of claims.
  • Keep proof of damage
    It is wise to take pictures of your own vehicle and the third-party vehicle or any other damage if your car is involved in an accident. Although the insurance company will always send an authorised claim manager to inspect the damages, it is always advisable to collect damage proof to make the claim process convenient.
  • Do not repair without informing
    It is imperative to inform concerned insurance providers about the incident before sending a car for repair. An insurer may analyse the concerned vehicle on the spot of the accident as a part of an insurance claim process. If policyholders send their vehicle to the garage and get it fixed before the necessary inspection, their insurance claim application can be rejected.
    Therefore, by following the car insurance claim rules and keeping the preventive measures in mind, one can complete a claim and receive reimbursement for any financial losses during an accident.

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