According to published IRDA statistics, an average of 10% of all car claims made is either fully or partly rejected by top insurers in the country often for valid reasons. Most of the claims get rejected due to the negligence or ignorance of the policyholder in understanding the policy wordings or purchasing a policy having a lower premium without considering its inclusions and exclusions and ending up with getting the claim rejected.
These are the top reasons which might lead to rejection of your Car insurance claim. Understanding them can help you to avoid claim rejections.
- Invalid driving license
It is important that you have a valid driving license in case you want to claim for the damage in case of an accident. A valid driving license is a fundamental requirement and found driving without it at the time of the accident will definitely lead to rejection of the claim even though your policy is in force.
- Drunk driving
Your insurer has all the rights to reject your claim if you are found drunk (or under the influence of drugs) driving at the time of the accident. There is no ground for appeal in such cases. In fact, you could be criminally prosecuted and imprisoned, if you endanger the lives and properties of others.
- No registration
As per the motor vehicle act, the vehicle registration should be valid at all times and should not be allowed to lapse. You cannot file an insurance claim even if your car insurance is valid under such circumstances.
- Repairing the car without intimating your insurer
If your vehicle gets damaged in an accident then you should not move your vehicle from the spot of the accident till you intimate your insurance company surveyor and ask for the permission to move the vehicle for repairs. In case you move the vehicle then you might get the claim being rejected. It becomes difficult for the surveyor to assess the loss in such a situation.
- Negligence of the policyholder
If found that you left the windows of the car open or left the keys in the ignition when the vehicle is unattended then the insurer will not be responsible if your car gets stolen. It would imply that you did not take the necessary measures to protect the car and the insurer would not be liable to pay the claim.
- Non-disclosure of material facts
An insurance contract is based on the principle of utmost good faith. If you are found lying about the material facts like a presence of an anti-theft device or failure to notify about LPG/CNG kit installation or any such things then the insurer is not liable to pay for the claim. He will have all rights to reject the claim.
- Class of use
A personal vehicle cannot be used for commercial purpose. In case your car is found to be used for commercial purpose or for any illegal purpose and then if the vehicle gets caught in an accident then the insurer would not be liable to pay for the loss or damage. Your claim will definitely get rejected.
- Losses not covered under the policy
There are certain exclusions in the policy like electrical/mechanical breakdowns, damage/loss due to war, mutiny, nuclear energy causes etc. which are not covered. So if your car gets damaged due to any of such reasons then your claim is liable to get rejected.
If you fill your car with either people or goods over and above the capacity of the car then it would invalidate the policy and lead to claim rejection as you would risk the lives of people inside it and the road users at large
- Consequential loss
Consequential losses result from direct loss. Suppose, your car enters a flooded area and you damage your car engine by continuing to drive your car in the flooded area. In such a case, your claim would not be entertained by the insurer. Now, let’s assume that an accident leads to engine oil leakage in your car and you continued to drive on leading to engine seizure. Again, your motor insurance claim will be rejected by the insurer.