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Insurance claims for vehicles, whether cars or two-wheelers, are entertained only if the damage is accidental, due to natural disasters, theft or accidental fire. Here are some reasons your claim may be denied or not paid in full by your vehicle insurance company.
Reasons An Insurance Claim Can Be Denied
Recently, after a motorcycle accident in which the rider lost his life, the insurance company rejected the claim because it was a 346 cc bike. Apparently, as per the terms and conditions of the policy, this company is not responsible for paying if the capacity of the bike is more than 150 cc. While this may be a case of misselling where the owner has not been informed of the policy by the agent, there are several other reasons a claim may be denied. Usually car and two-wheeler owners do not read policy documents and are not aware of the fine print or do not know about the exclusions and scope of their policies. Here are some reasons your claim may be denied or not paid in full by your vehicle insurance company.
Common Term Insurance Claim Rejection Factors
Insurance claims for vehicles, whether cars or two-wheelers, are entertained only if the damage is accidental, due to natural disasters, theft or accidental fire.
Ignorance about the policy & additional covers: A common reason for the rejection of claims and the grouse of the public is that some specific damages are not covered in the policy and one must buy separate additional covers for this. “For example, engine damage or depreciation loss is not covered under the basic policy and you need a separate engine cover and zero depreciation add-on covers this,” says Tarun Mathur, CBO, Policybazaar.com.
Cars sent in for repairs: A common mistake is to repair your vehicle yourself and then notify the insurance company. “It’s a mistake because it’s difficult for companies to track accidents and repairs, making it difficult to assess damage and approve claims,” said Pankaj Arora, MD & CEO, Raheja QBE General Insurance. This is the reason you should contact the insurance company, in order to not only evaluate the damage but also provide roadside assistance and take the car to the partner’s garage.
Use of vehicle for commercial purposes: If you buy a car for personal use, but start using it for commercial purposes, the claim will be rejected in case of an accident.
Common Reasons Why Insurers Deny Life Insurance Claims
Concealment or wrong information: “If there is any mis-disclosure or material facts not disclosed at the time of purchasing the policy, such as falsification of unclaimed bonus or pre-existing damage, then the claim is definitely rejected,” said Rakesh Jain, ED & CEO, Reliance Insurance General Similarly, if you provide wrong information about an accident or damage caused while filing a claim, it can be denied.
Lack of insurable interest: This means that the owner has failed to transfer registration and insurance in his name. In such cases the claim will not be entertained by the insurer.
Modification to the vehicle: If you install a CNG kit in your car, add accessories or make changes to the body of the vehicle, you will have to inform the insurer immediately, otherwise your claim in case of an accident will not be approved.
Policy guidelines: “If you don’t comply with the limitation of use clause in your policy, the claim will be rejected,” says Jain. So, if you do not drive within the specified geographical limits or if the vehicle does not have the specifications listed in the policy, say a certain engine capacity, the claim is likely to be rejected.
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No driving license: If the person driving the vehicle did not carry his license at the time of the accident, the claim will be rejected. Also, he must have a valid license that has not expired and is for the specified type of vehicle. For example, if he only has a two-wheeler driving license but has an accident while driving a car, his claim will be rejected.
Drunk driving: Another reason for claim denial is drunk driving. As it is illegal to drive under the influence of alcohol in India, any claim arising out of an accident caused due to drunk driving will be rejected.
Delay in intimation: If you delay informing the insurer about the accident, there is a chance that your claim will be rejected. The time frame is small, generally 24-48 hours, and you must make sure that you are intimate with the insurer during this period.
Delay in policy renewal: If you forget to renew the policy and an accident occurs during this period, the claim will not be entertained by the insurer.
Why Insurance Companies Might Deny Your Personal Injury Claim
Basic insurance policies only cover accidental damage to the body and machinery. Here’s what’s usually not included:
Consequential loss due to depreciation: Damage due to a policyholder or the actions of a third party and not due to an uncertain event is not covered. “For example, engine damage due to hydrostatic loss during the monsoon is common. Here the damage did not occur due to flood or rain, but because someone cranked up the car in a water-logged area. It will not be covered by the insurance company,” said Arora.
Voluntary Deductible: “If you opt for a voluntary deductible to reduce your premium, you will have to pay the mandatory deductible amount plus the voluntary deductible amount at the time of each claim,” says Arora.
Consumables: Things like engine oil or lubricants are not covered in the basic policy, as well as any plastic parts or tires. Wear and tear: Any damage caused to the vehicle in the normal course of use, say worn out tires or tubes, is not covered.
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Key/key replacement: Today, cars have advanced technology locks and keyless entry systems, which can be expensive to replace. It will be covered only if you have additional cover for the same.
Back to the invoice: The basic policy will only take you the Declared Insured Value (due to depreciation) of the car, which is lower than the value of the car on the road. You can bridge the gap with add-on covers.
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Reasons Your Insurance Claim Might Be Denied And How To Prevent It
Road accidents are sometimes inevitable, even if you observe safety measures. Fortunately, you have motorcycle insurance that can help with the damage to your vehicle.
But don’t panic. Having a claim denied does not have to be the end of your case. But what can you do in such a situation? Find out in this article what you can do when your claim is denied.
“Denial” in this context means rejection of an insurance claim. In this case, the insurance company tells you that it will not cover the cost of the damage to your vehicle. In other cases, the company may inform you that they will not pay in full.
Along with a claim denial, your insurance company will provide you with an official letter or statement explaining why your claim was denied.
Top Reasons For Life Insurance Claim Rejection
There are reasons or circumstances where your car insurance claim may be denied. You can see our previous article for more information: Why Your Car Insurance Claim May Be Denied.
Insurance agents play an important role in facilitating your claim process. You can discuss with your agent to seek clarification as to why your claim was denied. Identify the reason and make sure you understand the reason.
Sometimes, the mistake may be from your end. Errors can include incomplete or missing documentation, which can delay your claim.
If you don’t have an agent, you can go to the claims department to seek clarification on your insurance denial.
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Your insurer can give you a detailed explanation of the problem. Ask whether you can appeal or dispute the decision given by the insurer.
You can also file a formal complaint with the complaints unit. You must provide the necessary supporting documents. On a side note, please make sure you keep a copy of the document.
If there is still no answer despite your complaint to the insurance company’s complaint unit, you can consult a lawyer to help you. You can get a legal review for your case that was denied by the attorney. But please make sure that you consult the right lawyer; speak to a lawyer with expertise in the field. For example, get a special lawyer who specializes in insurance-related matters.
You can also submit your complaint to the relevant party with relevant information and documents for consideration to conduct an investigation.
Reasons For Life Insurance Claim Rejection Or Cancellation
Refer to the Malaysian General Insurance Association or Persatuan Am Insurans Malaysia (PIAM) for general insurance or takaful claims.
The Ombudsman for Financial Services (OFS) is an alternative dispute resolution channel to resolve complaints between Financial Service Providers and their respective clients.
However, please note
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