Reasons Your Car Insurance Claim Can Be Rejected

image

04 Aug 2023

Discover the most common reasons why your car insurance claim could be rejected. Read our blog post to learn to avoid claim rejection and ensure coverage.

One might wonder that since they own a car insurance policy that they are paying a premium for, is it even possible that when they file a claim it might get rejected? Yes, it is 100% possible. The insurance company has the right to reject your claim if you have failed to abide by the rules and regulations, terms, and conditions laid out by them.

An insurer does not abruptly reject your claim. There’s a due process for the same. However, before you buy your car insurance, you should check how reliable the insurer is when it comes to fulfilling claims. Amongst the many other pre-requisites that you must look for in your insurer, one of them is a good claim settlement ratio.

What is the claim settlement ratio?

A claim settlement ratio is an average percentage of the claims settled by your insurer in a given year. It is a parameter that helps you gauge how likely your insurer is to approve your claim and settle it. When you are buying your motor insurance, you must always look for insurance companies that have the highest claim settlement ratio because the higher it is, the more reliable they are in terms of settling your claims.

But despite having a high claim settlement ratio, the insurer can reject your claim under the following circumstances

Invalid or no license

If you do not have a license or if it is outdated, not only will you lose the right to file the claim, but you will also be subject to many other complications that might include fines or stricter punishments.

Inconsistent premium payments

If you have been missing your premium payments, the insurer can reject your claim. Paying premiums on time will ensure that your policy remains active. If you miss any of these payments, not only will your claim be rejected, but you might face other consequences like heavy fines.

Unapproved modifications

Car or bike modifications are accepted by the insurers. You can get any modifications done to your vehicle under the prescribed guidelines by the government as well as the insurer, and you can get it protected under your auto insurance. It is necessary that you keep your insurer in the loop with the modifications you make to your vehicle. Hence, if the insurer finds out about any modifications made without their knowledge at the time of filing a claim, it may be rejected.

Delay in informing the insurer

In the event of an accident, one of your top priorities should be to inform your insurer. A delay in that may lead to the rejection of your claim. Besides that, in the case of filing a car accident insurance claim, you must also ensure to follow the due process like filing an FIR and following the needed documentation. Your insurance company gives you enough time to finish the process. Make sure you do everything that is needed within the given timeframe to avoid rejection of your claim.

Using the personal vehicle for commercial purposes

Vehicles have defined purposes, and there are insurance policies suitable for those purposes. If you own a vehicle that is only for your personal use and you have a personal auto insurance policy for the same, then you cannot use it for commercial purposes. If you are breaking the rules and your car faces any damages, the insurer may reject your claim.

Obsolete documents

When you are filing a claim, not only should you have all your documents in place, but they should be the latest and updated. It could be your PUC, license, and even your insurance. If you own an expired insurance policy that you have not renewed yet, you might not even have a chance to file a claim.

Offensive acts

If you get into an accident due to drunk and drive, your claim will be rejected. Other offensive acts like parking in a no-parking zone, driving in the wrong lane, driving above the speed limit, hitting and running, etc can also lead to rejection of your claim.

Refusal to cooperate

The claim filing process requires a lot of back and forth communication, exchange of information, and interrogation. If you do not cooperate with the insurance officer regarding the same and fail to give accurate information, your claim might not be approved by your insurance company.

To ensure that your auto insurance claim gets approved all the time, you must avoid the above situations. Always keep proof of the damage done to your car. In any case, do not try to increase the consequential loss by trying to drive your damaged vehicle. The best thing is to not take any action until your insurer says so. You can always get your claims approved with zero to minimal hassle just by being a responsible driver and policyholder.

Related Blogs
Difference Between First Party vs Third Party Car Insurance
All you need to know about Engine Protection Cover in Car Insurance
What is motor insurance and the type of vehicle insurance in India


image
Team Kotak GIC

The content of this blog has been created and carefully reviewed by the esteemed team at Kotak General Insurance, with the sole purpose of providing valuable guidance and sharing insights on the importance of general insurance. Our objective is to assist users in making informed decisions when purchasing or renewing insurance policies for their cars, bikes, and health. Our expertly curated information aims to empower our readers with the knowledge they need to protect their valuable assets and financial interests.