15 Reasons: Why Your Car Insurance Claim Gets Rejected?

car insurance claim gets rejected
Why Claim rejection

We all know that we are living our days and night full of uncertainties and accidents can happen at any time anywhere. If You are using any car and its insurance policy, then you may need a car insurance claim anytime. But in some cases, car insurance claim gets rejected. And there may be several reasons behind the rejection of the claim. Sometimes, there are mistakes from the customers’ side also, and claims get denied.

In this article, I will explain about top 15 reasons why your car insurance claim gets rejected. After reading this article, you will be so much more aware of multiple things and would not do any mistakes from your side. And there will be a higher chance that you get your claim on time if there are no mistakes from your side. So without any further delay let’s talk about the top reasons behind car insurance claim rejection.

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1- No Valid License or No License

This is the most important reason which you should always care about. If you drive your car without a valid license or without a license at the time of the accident then your car insurance claim may get rejected. Always check that the driving license is valid while driving. It’s not expired and you are eligible for the vehicle which you are driving.

Sometimes we give our vehicle to our friends, and relatives to use it. Whenever you give your vehicle to another person for use then be careful and check that the person is having a valid driving license. A single mistake can give you a huge dent in your pocket. Ensure that you have a proper driving license while driving the vehicle on the roads. So that you don’t get any car insurance claim rejection because of not having a driving license.

2- Influence of Alcohol or Drug

The second most important reason for the rejection of the car insurance claim is drunk and driving. The company does not entertain your claim if you are under the influence of alcohol or any drugs while driving the vehicle. The influence of alcohol or drug makes you incapable to drive the vehicle safely.

The company will reject your motor insurance claim if found that you were driving the vehicle under the influence of alcohol or drug at the time of the incident. Many times, it is noticed that people go to parties or bars and drink alcohol.

After returning home they drive the car or bike on their own. This is not correct because it increases the chance of an accident on the road. It may put you, yourself, and third-party all-in danger. So, avoid this situation and always use alternate travel methods when you are drunk. Always avoid drunk and driving. It is not safe.

3- Negligence Behavior

Sometimes a small ignorance cost us a huge amount. Insurance companies also reject your car insurance claim on your negligent behavior towards your vehicle and driving. For example, if you park your car in a parking zone or you forget your key in your vehicle. The company may count it as your negligent behavior and the insurer may reject your car insurance claim if your car is stolen.

So always be careful to avoid any such kind of mistakes. Please avoid parking your vehicle in the no parking zone, and don’t forget your key in-vehicle, Please close the door properly and lock it properly.

4- Policy Ownership is Different

Mr. A purchased an old car from his friend Mr. B. He transferred the RC in his name but still, insurance is running in the name of Mr. B only. After some time his car got damaged in an accident and he filed a car insurance claim of Rs.80000 from his insurance company. He was shocked that his car insurance claim was rejected.

The company rejected the claim because the car was in the name of Mr. A but the insurance policy was running in the name of Mr. B. Ownership of the insurance policy and the car should be in the name of the same person and it was not in the above example.

So, whenever you purchase an old vehicle from anyone then please transfer the car ownership and insurance both in your name immediately. If the insurance of the vehicle is expired purchase new insurance.

5- Use of Personal Vehicle as Commercial

If you are using your private vehicle for commercial activity and an accident happened then you are not supposed to get your car insurance claim. If You have purchased an insurance policy for a private car and the company has taken the premium according to the tariff rate of private car insurance.

The company expects that you will not use your car for commercial purposes because the tariff for commercial vehicles is different. So, in case of using your private car for a commercial purpose and any claim arises then the company will not entertain your car insurance claim. It is advisable to avoid commercial use like for ferrying passengers or for commercial loading purposes.

6- Delay in Intimation of Claim

A long delay in intimation of an incident may be one of the reasons for the rejection of your car insurance claim. Always report your claim immediately or within the time frame given by your insurer. Make a thumb rule to report your incident as soon as possible.

The company may require spot investigation and other formalities to understand the loss and exact situation of an incident. Please avoid any kind of delay to intimate your insurance company.

Companies give you proper guidelines while purchasing a policy for your vehicle. And if you have any confusion regarding a car insurance claim at the time of the accident, you should consult with your insurance agent and company.

7- Consequential Loss

What is consequential loss? Suppose you are going somewhere and your car’s front bumper got damaged and the left door also broke down in an accident. But you didn’t tow the car and also not informed your insurer however you drive it up to the garage for repair.

Now due to driving it up to the garage the engine of the car also gets damaged and rear bumper also broke down. In this case, damage to the engine and rear bumper is a consequential loss because ideally it was not damaged on the spot when an accident happened.

Engine and rear bumper damage due to driving it to the garage. So, Company may reject your car insurance claim for consequential damage and may not pay the claim of the engine and rear bumper in the above case

8- Wrong NCB Declaration

When you do not file any claim in the preceding policy year then on renewal insurance companies provide a reward that is called NCB (No Claim Bonus). It’s a discount which you get on your basic premium. Never provide any wrong details of your car insurance claim status. If you have taken any claim in the previous policy then please mention it clearly and do not avail discount on behalf of no claim bonus.

Suppose you give the wrong NCB details to the company. After verification of it, your insurer gets found that you have taken the wrong No Claim Bonus discount. The first company will send you a recovery letter. If you fail to pay it within the time limit then the company may reject your car insurance claim or may cancel the policy. So please provide the correct NCB status while taking the policy for your vehicle.

9- Expired or Lapsed Policy

One day Mr. A was going to his office and his car gets damaged in an accident. He filed a car insurance claim for the damage but he got to know that his car insurance claim was rejected by his insurance company. When he checked the reason for rejection, he found that the policy has lapsed because he didn’t renew it.

I hope you will not do this type of mistake. Always renew the policy on time or before time. A small negligence can give you a big monetary burden. Double-check your policy renewal date. Insurance companies also send you a renewal notice and other reminders to pay the renewal.

10- Beyond Geographical Limit

The insurance policy you purchase for your vehicle in India has a certain geographical limit to use. Companies do not cover any car insurance claim arising beyond the limit of geographical area. For example, if your policy is valid for India, and for any claim arising out in Pakistan, or Nepal then the company will not pay you any claim for it.

Always avoid using your vehicle beyond the geographical limit. If you have any urgent requirement to go to a nearby country then take prior approval and endorsement from your insurer. Possible you need to pay some additional premium for the extra

11- Repairs of Vehicle Without Intimation to Insurance Company

If you have repaired your car without intimating to your insurer then maybe your car insurance claim gets rejected. If you inform the company later then the company would not be in a position to investigate the incident details and spot it properly.

The company expects that whenever any mishap or incident occurs, first you will inform them then you will get it repaired as per requirement. So, don’t delay in informing your insurer, and do not try to first repair it and then intimate to the insurer.

12- Up-Gradation in Vehicle

After purchasing the policy If you have done some up-gradation like CNG, LPG, the addition of accessories, etc in your vehicle then please intimate it to the company and endorse it in your policy. If you will not endorse the same then the company may reject the claim if arising out. The claim will be rejected whether it is related to the up-gradation or not. Endorsement of any changes in the vehicle would be good for you.

13-Filling One Claim for Two Separate Damages

This is a very important point to understand. Suppose, one accident happen three months back and your car’s front bumper got damaged. The second accident occurred two days back and the rear bumper got damaged. Now you are filing a car insurance claim for both bumpers at the same time.

Your insurance company may reject the claim for the front bumper and pay only for the rear bumper. Surprised? But it is true. You are supposed to file the claim at the time of the incident only not three months later.

Every company has its time frame to file the claim and you should file the claim within the time limit. If any damage occurs in the vehicle then intimate your company and file the claim immediately, please don’t wait to file the claim with another damage in the future.

14- Anti Theft Discount

Usually, insurance companies provide you with a discount if you have installed an anti-theft device in your vehicle. You should take this discount if you really have installed the device. If you don’t have installed the device, you should not avail of the discount on this behalf to only reduce the premium.

Because if you have taken the discount without having the device then your theft claim may get rejected. Anti-theft devices must be approved by the Automobile Research Association of India (ARAI)

15- Accessories Details

If you want that your insurer provides you with a claim for the accessories also. Then you have to mention it while taking a policy. It may cost you an extra premium to cover it. But if you have not mentioned it in your policy then the company will not pay any claim for the accessories. Accessories can be anything like a music system, electronic items, etc.

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