With higher disposable incomes and attractive car loan offers, many people can afford a car and reduce their dependence on public transport and the related disadvantages arising out of it. Having suitable car insurance adds a layer of security to our luxury, and helps us protect ourselves and others.
However, getting your claim approved can be much more difficult than getting your car loan approved, and some simple blunders can lead to rejection and burn a significant hole in your pocket. Let’s take a look at it.
Blunders That Can Leads To Car Insurance Claim Rejection
1. Delay in filing the claim
The foremost blunder that many people make is not informing the insurance company of the accident. It is expected that the insurance company is notified immediately after an accident. Many insurance providers give a window of 48-72 hours to report the claim. This report should be filed even before the car is taken to the garage for repairs. Many insurance companies provide additional benefits such as a car towing facility that will help you bear the burden of taking the car to the garage.
2. Insufficient documentation
The approval of any claim is dependent on providing the necessary documents. Some mandatory documents that need to be provided are Driving License, Motor Claim Form, Insurance Policy, RC, etc. The required documents should be submitted in its entirety and in the requested time frame, failing which the car claim can be rejected. If you have installed expensive gadgets in your car, then it is essential to save and submit the receipts of these gadgets to get them included in your settlement amount. If you decide to install a CNG/LPG kit in your car, you need to inform your insurance company immediately.
3. New car not transferred in your name
While purchasing a car on resale, many individuals fail to transfer it to their name in their insurance policy papers. In such cases, the policy is considered null, and all claims made against it stand rejected. Therefore, it is necessary that whenever you purchase a second-hand car, you should get the transfer of the legal ownership done from the RTO at the earliest.
4. Using a private car for commercial purposes
If any accident occurs while a private passenger car is used for commercial purposes, or for unlawful or criminal purposes, the insurance company will reject any claims brought for it. Driving a car for other purposes that are not allowed by the terms and conditions of the insurance company is a common blunder many people make.
5. Failing to file the FIR
The First Information Report (FIR) is an official description of the accident taken by the relevant authorities and can play an essential part in helping the insurance company to process the claim faster. Some individuals try to settle with the third party without informing the police or the insurance company.
6. Failing to record the evidence
The accident scene plays an important part in the claim approval process as it can give crucial information to the insurance company. It is always preferred that the insured takes photos or video clips of the undisturbed accident scene, such as your damaged car, the witnesses, etc. to serve as a proof for your claim. If there is a third party involved, then taking his/her information will also help during third party settlement. Appropriate pieces of evidence will help the insurance company to process the claim faster.
7. Providing inaccurate or incomplete information
Many claims are rejected because the information provided is not complete and inaccurate. Many people either exaggerate the facts or hide them in order to get fair compensation. This act is called “non-disclosure” and can get the claim delayed or cancelled altogether, and can make you liable to any cost the insurance company has spent in investigating the claim.
8. Non-intimation of car modification
When you fill the insurance form, you are requested to fill the details such as the car model, specifications, engine capacity, etc. If you decide to upgrade or modify your car which substantially alters its specifications, you need to inform the insurance company. Un-notified car modifications can lead to car insurance rejection.
9. Driver’s fault
If your car was being driven by someone who was not carrying a license, or was carrying an invalid license, then the car claim may stand rejected. Also, reasons such as driving under the influence of alcohol or drugs, driving without proper documentation, parking in a ‘no-parking’ zone, or driving with an intentional purpose of self-damage can be ground for car claim rejection.
10. Non-payment of premium and failing to renew policy
The insurance cover for any vehicle exists only if the premiums are paid on time, and the policy stays in effect. Non-payment of premium, or failing to renew the policy can lead to a lapse of the policy and the cover, thus freeing the insurance company of any liability on your damaged car.
11. Overloading passengers
If the insurance company finds out that the car was overloaded with passengers over and above the limit, the claim can get rejected as overloading the vehicle can lead to imbalance and makes it prone to accidents. According to the relevant guidelines, a sedan can have 4 passengers.
12. Driving away from the accident scene
No matter how difficult it gets, one should not move away from the vehicle from the accident scene, nor should take it to the garage for repairs. Even driving the vehicle after the accident and before submitting the claim will be treated as ‘consequential loss’ and will highly impact the claim settlement process. It is always best to leave the car untouched at the accident spot until the insurance company executive arrives to ascertain the damage done.
13. Not selecting the right policy
Not getting acquainted with the insurance policy is another mistake that many car owners make. Each insurance policy is different and affords a different level of protection to the people involved. Along with the benefits, many insurance companies have their inclusions and exclusions, which need to be taken care of. Along with this, the policy documents also clearly state the number of days within which the claim needs to be submitted, and so on. Failing to note these details and act on it can increase the chances of claim rejection.
While driving is a necessity of the times in which we live, it is important for us to be prudent in our driving and as honest citizens, we should adhere to all the rules set by the authorities for our safety. As discussed, if we are careful with our car insurance policy and our dealings with the insurance company, it will keep us safe from the possibilities of claim rejections and the resulting frustrations arising out of it.