8 Conditions leading to Car Insurance Claim Rejection

You’re in great trouble seeing your prized possession getting damaged viciously, while saving a biker from opposite side, but collided.  Thankfully, no bodily injury still, you’re heartbroken seeing it in such a condition.

Now, what next?

As it is your first costly possession, you have insured it well. And you’ve full trust on the insurer that it will cover you for the repair expenses. And you’re quite sure that you’ve read every condition carefully at the time of buying car insurance online.

WAIT!

Are you aware that your car insurance provider may not honour your insurance claim?

REASON? Let’s discuss some circumstances when your car insurance claim can be rejected.

1. Lack of Proper Knowledge

Rightly said that half knowledge is dangerous.  Many people buy insurance just for the heck of it or to just remain in the good books of law. But when a claim arises they have to face a lot of difficulties due to lack of proper knowledge of the product. Though the terms and conditions are clearly mentioned in the policy documents, very few bother to read or understand them. The result is either they end up facing a claim rejection or reimburse with the insufficient amount. 

Tip: It is recommended to thoroughly read the policy terms and conditions carefully. You can seek advice from your insurance advisor or the agent and clear your doubts.

2. Delay in Paying the Premiums

Stop being lazy and pay the car insurance premium on time. Ignoring this will lead to lapsed policy or leaves you uncovered. The consequences of carrying a lapsed policy are manifold. Moreover, the premiums that you have paid so far will go waste. Most importantly, no insurance company will entertain your claim with a lapsed policy. in such a case, you’ll have to shell out your savings as your insurer will not extend a helping hand. In addition, you will lose over accumulated no claim bonus in case you forget to renew the policy. To avail the NCB benefits, you must renew to policy within 90 days from the expiry date.

Above all, the legal liabilities in case of an accident to a third party can cost you a bomb. You can be liable to bodily injury, property damage or death of a third party when the insured vehicle is at fault. With a lapsed policy you can’t utilise the third party benefit under car insurance and end up bearing the entire burden on you.

Tip: Keep a close watch on your car insurance expiry date. It doesn’t matter whether you own insurance from leading insurers let’s say Tata AIG Car Insurance, the only thing that matters is up to what extent you are covered. Don’t pose a risk to yourself or others by lapsing your car insurance.

3. Acting Over-smart and Not Informing the Insurer

Many of us may think they take a wise decision by repairing the vehicle without informing the insurance service provider.

Not really! Sadly they’re doing a blunder.

The thoughts of getting your car repaired first and getting the same amount form the insurer is wrong. It’s your responsibility to inform the insurer about the incident. They will appoint a surveyor to investigate the damages, the basis of which your claim will be getting paid. Hence, the insurance company has all the rights t reject the claim on the grounds of not being informed by you immediately. Moreover, the inability to trace the incident spot and cost of damages can be a reason for your claim being rejected.

Tip: Rather taking up the blame on you, immediately inform the insurer. Avoid getting the repairs done on your own and then inform the insurer. You can only avoid if you don’t want to claim for small damages and willing to bear the expenses on you.

4. From bars to Outside bars – Take Care!

You must have noticed those boards mentioning “don’t drink and drive”.

Well, it needs enough guts to ignore this and drive after pushing those pegs inside.

But, WAIT!

You are not going to get a bravery award for this, instead, you will have to pay in a huge manner. There are many people who take the law in their hands and pay for it.

The increasing accidents on the road are in the rise and one of the root cause is rush driving or driving under the influence of alcohol.

Are you aware of that drunk and driving is permanently excluded from your car insurance policy. If not, check with your insurance document.

The insurance provider will straight forwards reject your claim if you found drunk while driving.

Forget about this, go behind the bars and you will pay a huge penalty a maximum to Rs. 5000 and imprisonment in the worst case.

Tip: Avoid driving while you are drunk. You are responsible for your own safety and violating the laws can only lead to the adverse situation only.

5. When Car Ownership isn’t Transferred in the Insurance Copy

Two possibilities are two:

You have either forget to transfer the ownership of your car in the insurance policy or you just acting lazy or intentionally delaying it.

Reason can be anything, but the loss is huge!

Transferring the car ownership is called RC transfer which is essential after buying the car, especially if you own a second-hand car.

If not the insurance company consider the claim invalid, in case RC is not being transferred. Why welcome tensions when you can easily complete the documentation related to your car insurance.

Tip: Whether you own a second-hand car or a brand new one, RC transfer is mandatory and updating the same in the insurance documents is also essential. Don’t wait for an incident to happen, do your responsibility first and stay protected throughout!

6. Not Keeping the insurer in Loop while Fitting LPG/CNG Kit

Installing CNG/LPG can be a good decision. But not information your insurer is not. You might have increased the life span of your vehicle by installing these kits, but not intimating the insurer you are increasing the chances of getting your claim rejected.

God forbid if you need to claim your insurance for an accidental cause, your insurer will reject the claim on the above ground. A little negligence can lead to a huge financial drain.

Tip: Speak out about an installing of CNG/LPG kit. Also, ensure you have updated the same to the RTO office.

7. Using Your Private Car for Earning Money

First of all, you bought it for your personal use right? Even you have declared the same while buying Cholamandalam car insurance (let’s say).

Now, what compels you to rent it out for Uber or Ola? Or any other commercial means to earn money.

Well, if you have decided, bear it in your mind that your insurer will not cover you for future claims. Be ready for claim rejection for using the vehicle for commercial purpose.

You could have certainly taken the right decision by buying a passenger carrying vehicle or goods carrying vehicle for this purpose.

Tip: Well if you want to use a car for a commercial vehicle then buy appropriate insurance that suits the purpose. Despite buying car insurance for a private vehicle and using the car for commercial means and facing claim rejection on the later stage, don’t make any sense. Take the right decision.

8. While not Carrying a Valid Driving License and Drive

Driving safely is essential.

But driving without a license, even if you drive safe, is not right. In other words, it is an offence. Your insurer will not entertain you in this case. Let’s say, you own Royal Sundaram car insurance. The last time while taking out your car on the roads, you missed you DL without realising the trouble it can ignite. After driving a few kilometres, when you stopped by the man in uniform, you were unable to produce your DL and realised the urgency. This led to nothing but a huge penalty on you.

In the worst case, if you meet with an accident, the insurer will not cover you for the expenses incurred in repair or any third party liability. So, why create any hassle when you can avoid such a thing and lead a peaceful state of mind?

Tip: Avoid driving when you don’t carry the driving license. Even don’t allow anyone to drive your vehicle if he/she doesn’t possess a valid DL.

Thumb-Rule

It is in your best of interest to avoid a self-made trap leading to claim rejection. Now that you know the main reasons for your claim getting rejected, try to avoid such blunders to stay covered. When you buy car insurance online or offline, the last thing that you wish for is to face claim rejection, even when you need it the most. So, why welcome an unnecessary headache, track your policy regularly, understand the clauses properly and set an alarm on the policy renewal date. Stay protected!

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