3 reasons why your car insurance claim may be rejected

by Kanika Shelatkar Insurance Consultant

Owning a car is a great feeling. It gives one a sense of independence and one does not have to depend on crowded public transportation vehicles. But, as per a mandate issued by the Government of India, it is necessary for all vehicle owners to invest in car insurance. The Motor Vehicle Act of 1988 states that all vehicle owners must have a mandatory third party liability insurance cover which protects them from incidents of damage to vehicle or property, injuries and even death, in case of an accident. Car insurance provides the much needed financial security that arises out of such incidents and even covers you for legal liabilities. That said, there are a few reasons why your insurance claim may be rejected. Let’s find out what they are.

Not disclosing relevant information: As per the terms and clauses of your insurance policy, you are mandated to disclose the necessary information regarding the state of your vehicle to your insurance provider when you purchase a new insurance policy or renew it. The same applies when you file an insurance claim. If you withhold important information regarding your vehicle at such times, your insurance provider can reject your claim. A rejected insurance claim can also affect your credibility when you set out to purchase a new insurance policy or while renewing the existing car insurance policy. You need to inform your insurance provider if you have made a claim on your vehicle in the past, if you have been charged of any criminal offence, if there are any existing damages on your car, etc. Such information should be provided when you fill the claim form or when your vehicle is being inspected by the insurance provider.

Damages not resulting from accident: Every incident occurring on the road is not necessarily covered as part of your insurance policy. Typically, you are only covered for traffic-related accidents on a third party liability cover. If you have purchased a comprehensive 4 wheeler insurance policy, you should read what events are covered. For instance, you could be covered for certain natural disasters, but not all of them. The same applies for man-made incidents; you could be covered for vehicle theft but not for damage arising due to riots, strikes etc., for instance. As such, it is important to be aware of what your insurance policy covers before you file a claim. Similarly, in case of accidents, you could be eligible for cover in case of accidents occurring when your vehicle is in motion and not damages caused while it is stationary. This is why it is important to read the fine print of the insurance policy. Also note that damages occurring due to daily wear and tear of the vehicle cannot be claimed.

Fraud and deception: Car insurance fraud is a criminal offence that can lead to imprisonment. If the insurer feels that you have actively tried to deceive them, they can involve the local authorities and a criminal case can be registered against you. However, if you are not guilty of any fraudulent activity, you can protect your legal rights by seeking help from your lawyer. Also, it is always recommended that you take pictures or have witnesses to support your claim when the insurer feels the need to verify the information provided by you. If the insurer finds out that you have made a fraudulent claim, you could also be banned from receiving insurance for any vehicle in future.