Have you experienced a scenario where your car insurance claim got rejected? It is a huge disappointment, as you end up paying everything out of your own pocket, even after having a policy. So, why does a claim get rejected? What can be done to avoid such things? Here, we have listed 8 common reasons why a car insurance claim gets rejected and the ways to tackle them.
8 Reasons for Car Insurance Claim Rejection
1. Filing a fraudulent claim
One of the biggest red flags for a car insurance company is a fraudulent claim. You are not supposed to lie about the damages done to your car or the incident in general. One thing you need to get clear is that a car insurance policy is not for making profits but to moderate the losses. Therefore, you should not mention the previous damages on your car in your claim to get compensation for damages from a recent incident.
If the insurance company finds out that you have made a fraudulent claim, you can end up fighting a legal battle with it. Losing your insurance is not the only bad thing that could happen to you in such a case. You might very well have to pay compensation to your car insurance company for the extra effort and time they had to put in to inspect the fraud.
2. Getting your car repaired before making the claim
This is one of the rookie mistakes that many people make. You are not supposed to repair the car before notifying the insurance company. You should not speed up the process of getting your car fixed if you are to avail of the policy benefits at the end. Intimate the insurer first, so that they can inspect the incident and assess the damages done to your car.
In fact, the insurer can very well help you identify the right garages to get your car repaired so that you can enjoy some discounts without compromising on the quality of the work. Just make sure that you file for the claim within the accepted time period, which would be mentioned in the policy’s terms and conditions.
3. Modifying certain parts of the car and not mentioning it to the insurer
It is very important to notify the insurer about any modifications that you make to your car. Broadly, the modifications can be put in three categories: security, aesthetic, and performance. If you make any security modifications like adding an anti-theft alarm or a camera, then the prices of your premiums can go lower. However, they can go up, if the modifications you made belong to the other two categories.
No matter what the modification is, you are supposed to inform your insurance provider. For example, let’s say you made a few tweaks in the car to increase its speed but did not mention this change to your insurer. Now, if you are involved in an accident with your car because of over-speeding, the insurer has the right to reject the claim. To avoid such a situation, you need to intimate your insurer about any changes you make.
4. Breaching policy conditions
There are certain guidelines and conditions in the policy that you should definitely follow. If you don’t, and you are involved in a car accident, then the company has the right to reject your claim. One of the simplest examples to explain this would be a case where you have used your private car for commercial use.
If your private car gets involved in an incident while being used for a commercial purpose, the company can simply reject the claim, calling this a violation of the policy. So, make sure that you have a commercial car insurance policy if you are to use the car for commercial purposes.
5. Reporting late about the accident
If you are filing a claim after a couple of days of the incident, then you are already late in most cases. Most of the insurers in the market do not accept a claim after 48 hours of the incident. You might get some relaxation in some cases, and that too after some deliberation, but the general rule of thumb is that you must file the claim within the first 24 to 48 hours of the accident.
6. Having a Lapsed policy
One of the main ways to get your car insurance claim rejected is by having a lapsed car insurance policy. It is equivalent to making a claim to get cover for damages without having a car insurance policy. This is the exact reason why you always need to make sure that you have renewed your policy on time. You never know when a mishap can take place and having a lapsed policy at that time can be a huge problem.
7. Claim against exclusions
As mentioned above, you need to read the conditions listed out in the policy. Every car insurance policy has certain exclusions for which the company does not pay. Note that the exclusions can vary from insurer to insurer. Now, if you end up making a claim for any of the exclusions, then there is a high chance that your claim will face rejection. Therefore, make sure that you are well-versed with such exclusions in advance so that you do not end up filing for a claim that the company does not cover.
8. Breaking general traffic rules
Drunk driving, driving over the speed limit, underage driving, and driving without a valid license are just some of the instances that have the potential to lead to a rejected claim. If the mishap happens because, or during, any such situation, the insurance company has all the right to reject your claim for damages.
Now that you know the major reasons for your car insurance claim to get rejected, you should be careful to not do any of these. In conclusion, always remember how important it is to draw an accurate picture of the incident for the insurer if you are to make a successful claim. You should not lie about the damages done to the car. Apart from that, you need to read the policy thoroughly and follow traffic rules all the time.