Motor insurance is considered a must for acting as a safety net for vehicle owners. But often, claims made by insured vehicle owners are rejected due to a case of an incomplete understanding of the policy. Lately, this case has surfaced in the news where a motorcycle accident resulted in the death of the rider.
However, the claim was rejected by the insurer as the said bike was a 345 cc make. Unfortunately, the policy terms stated that the insurer would not reimburse the policyholder if the bike capacity is over 150 cc. The policyholder had looked past this detail and made the purchase, which ultimately proved ineffective and useless for them.
There are other reasons besides misinformation and incomplete understanding that can render a policyholders claim invalid. Usually, such a situation arises when vehicle owners skip reading the entire document of the policy that sums up its full scope. Besides, a general insurance claim for any vehicle is considered valid by the insurer only if the damage occurred due to accidents, natural disasters, fire or theft. Let us look at some reasons which could be the cause of your claim rejection.
1. Scope of Cover:
Often, claims made by people are rejected as some specific damages lie outside the coverage of the policy. For covering such damages, policyholders need to purchase add-ons that especially cover said damages. An example of this could be depreciation losses or engine damage problems in a vehicle. A policyholder will need a specific zero depreciation add-on and engine protector add-on for such losses, as they are not included in the basic policy.
2. Repairing Before Claim:
It is typically a mistake to get a vehicle repaired after an accident and then inform the insurer. In such cases, it becomes hard for the insurer to track the details of the accident and the repair. Hence, it gets hard for the insurance company to evaluate and estimate the damage and approve the claim. That is why vehicle owners must inform their insurers in the unfortunate event of an accident. By doing so, they not only maintain transparency but also help the insurer understand their case better.
3. Commercial Use:
If you own a personal vehicle and use it for commercial purposes, your insurer will deny any damage claims you raise. It is because Commercial and Personal motor insurance function differently. Commercial vehicle insurance is for protecting the policyholder’s business against any damage caused due to an accident. However, Personal vehicle insurance protects the car owner against accidents, natural disasters, fire or theft.
4. Hidden/False Information:
While purchasing motor insurance, if the policyholder provides false or incomplete information, then the claim they raise may be rejected.
Such wrongful disclosures or hidden material facts provided at the time of purchasing the policy impact future claims made by the insured. Claiming for a falsified no-claim bonus or one for pre-existing damages are bound to be rejected due to hidden or false details. Additionally, giving wrong information about an accident while filing a claim can result in rejection.
5. Modified Vehicle:
There are cases where the car owner decides to add new accessories to the vehicle or make changes to its body. Most common among such changes is the instalment of a CNG kit, re-painting, etc. In such cases, the insurer needs to be informed duly or else claims raised by the policyholder are considered invalid.
6. Driving Without Licence:
If the driver of a vehicle is in an accident and is not carrying his licence at the time of the accident, the claim made by them is denied. Additionally, the driver needs to have a valid license for the kind of vehicle they are driving. It means that if the driver only has a two-wheeler license but meets with an accident while driving a four-wheeler, the claim will not be honoured.
7. Drunk Driving:
Drunken driving is perhaps one of the most infamous reasons for denial of claims. As it is illegal to drive a vehicle under the influence of alcohol in India, all claims stemming from an accident caused due to drunken driving are denied.
To sum it up, there are several reasons that could result in the denial of a motor insurance claim. It goes without saying that finding oneself in need of help and not receiving it is an odd situation. That is why it is essential to be mindful of the above-mentioned reasons while filing a claim with your motor insurer.
