How to Avoid Car Insurance Claim Rejection
One’s car insurance policy often holds the same value as one’s car itself, as it is responsible for securing one’s finances in case of an unforeseen event. It needs to be updated at all times and must be safely preserved for it to be produced at the time of the claim settlement process.
The policy has a detailed guideline that provides complete clarity on the course of action one must adopt for the entire claim settlement process – the importance of this document cannot be emphasized enough.
Why do claims get rejected?
The plausible reasons as to why claims get rejected are outlined below –
- There is the non-disclosure of vital information at the time of applying for the policy or at the time of renewal;
- The policyholder has acted in a fraudulent manner;
- The claim is for an event that is not covered under the policy;
- The claim falls under an exclusion clause in the policy;
- The claim has been filed after the cancellation of policy;
- If the nominee details have not been duly filled or updated when need be;
- If payment of premium has not been paid on time leading to the lapse of the policy.
What are the things that you can keep in mind to avoid claim rejection?
- Do not submit any fake documents – doing so is not advisable at all, as the insurer may declare that you have a mala fide intent to defraud the insurer and pursue legal action against you in a suitable forum. One will not just forfeit his or her policy cover, but will also face legal repercussions such as fines, penalty, and a jail term even based on the findings of the court.
- Do not forget to specify the modifications done on your car to the insurance company – the policy will only cover the express declarations that the policyholder makes at the time of getting the policy. Any upgrade made to the automobile must be immediately informed to the insurer as it not only affects your driving experience in the car but will also impact the premium that is to be paid to the insurer.
- Inform the company about the car accident within 48-72 hours – the insurer expects to hear of an accident or any damages or loss to the car within a stipulated period of time. This period is clearly outlined in the policy document itself and varied from insurance company to company. This step is important as the next from the insurer’s end will be entirely premised on the information provided and the time at which the said intimation is made.
- In case of a stolen car, do not forget to lodge an FIR – such an action of lodging an FIR in the nearest police station is always recommended in major cases such as theft of a car as it attests to the veracity of the claims, helps one recover the stolen car and will serve as proof for making the car before the car insurance company. For example-Suraj approached his insurance company for a claim as his car got stolen. While at the time of inspection, the company asked him to show the copy of an FIR of the lost car. Suraj was surprised to hear that as he did not register an FIR in the nearest police station. Hence, his claim got rejected by his insurance company as in the case of car theft, an FIR is a mandatory document that insurance companies ask for. Failing to provide the same can lead to claim rejection.
- Do not drive the vehicle without a valid driving license – the law of the land mandates that one is eligible to drive on the Indian roads only if he or she has a valid driving license issued by the RTO after the completion of a driving test. The insurance company has every right to reject a claim made by an individual who is driving the car in the absence of a valid driving license.
- Never claim for things that are not mentioned in your policy – each car insurance policy will cover specified subject matter such as losses arising out of a natural disaster, theft, accidental fire, car accident, etc. Any subject matter which is not expressly mentioned in the inclusionary clauses of the policy is understood to lie beyond the ambit of the said policy and hence cannot be made a part of one’s claim. To get further clarity on the inclusions and exclusions in the policy, do consult your insurer or insurance agent.
- Do not repair your vehicle without informing the insurance company – as you will not only lose an opportunity to avail the cashless/reimbursement services of the insurer but will also face some legal trouble for non-disclosure of material facts that would alter the risk of the insurer.
- Do not use your private car for commercial use – this is a standard exclusionary clause in most insurance policies and making such a claim is infructuous. On the contrary, the insurer can sue you for mala fides and breach of contract by virtue of non-disclosure of material information.
- Do not forget the expiry date of the policy – as one must renew the policy (either with the same insurer or purchase a policy from another) well within time to avail the benefits of NCB and maintain one’s credit history with car insurance intact.
Rejection of a claim can be quite disastrous for the policyholder who has put all his eggs in a single basket, counting on the insurer to cover for him at times of crisis.
In order to be placed in a difficult situation, ensure that all the obligations/ duties mentioned in the policy have complied with in a timely manner. Proceed with caution and ensure that your financial security is not adversely hit due to frivolous, avoidable lapses on your part.