Discover effective strategies to prevent claim rejections for your car. Know about tips and actions that help to safeguard your claims, ensuring smooth and hassle-free reimbursement.
A car insurance claim rejection could be disheartening. However, it is crucial to provide financial protection for your car to prevent its damage in case of accidents or theft. The real test of an insurance policy comes in at the time of a claim, and if the claim gets rejected, the entire purpose of paying the premium is defeated. It is not always the fault of the insurer in case of a claim rejection.
One must understand how the claim process works for both comprehensive and third-party insurance so that you can ensure the claim gets approved and chances of rejection are nil. Let us understand what the main reasons for rejection are and how you can avoid making these mistakes:
Reasons for car insurance claim rejection in India.
Each insurance company follows a process for claim settlement for comprehensive and third party insurance. They must follow some rules and clauses and most of the time, the cause of rejection is that these are not followed.
Some common reasons for car insurance claim rejection in India are:
1. Failure to disclose accurate information
If the policyholder provides false information or fails to disclose material facts related to the vehicle or the driver, it can lead to claim rejection. Many times, accurate information is not provided at the time of taking the policy, and if the company finds out about a claim at the time, they are well within the right to deny the claim.
2. Policy violations
If the policyholder violates the policy terms and conditions, such as driving under the influence of drugs or alcohol, driving without a valid license, or using the car for illegal activities, the insurance company can deny the claim.
3. Lapse in policy
If the policyholder does not renew the policy on time or allows it to lapse, leading to coverage gaps, it can result in claim rejection. One must always make sure that the premium is paid in time to ensure there is no gap and the car is always insured.
4. Delayed or false information about the incident
The insurance company can reject your car insurance claim if they are not informed within the time about the accident or if false or inaccurate information is given to them.
5. Lack of documentation
The policyholder must submit all necessary documents, such as FIR reports, repair bills, and medical certificates, to support the claim. Failure to provide proper documentation can lead to claim rejection.
6. Peril not covered
If the damage is caused by an event or peril not covered under the policy, such as war, terrorism, or nuclear hazards, the insurer can deny the claim.
7. Pre-existing damage
If the damage to the car existed before the policy came into effect or was not caused by the insured event, it could lead to claim rejection.
8. Non-disclosure of modifications
If the policyholder fails to disclose any modifications made to the car after purchasing the policy, the insurer can deny the claim. It is important to declare all modifications to avoid claim rejection.
Proactive steps to minimise claim rejection
Taking proactive steps can help minimise the chances of claim rejection. Here's how.
1. Accurate information
· Policy application: Provide correct details about your vehicle, including its make, model, registration number, and modifications if any.
· Driver information: Accurately declare information about the driver’s age, driving license, and history to avoid claim denial.
· Incident: Inform the insurance company in time about the incident and not after getting repairs. This, for sure, will lead to claim rejection.
2. Timely renewals
Always make sure the policy is always in force and does not expire. For this, renew your car insurance policy on time to prevent coverage gaps and avoid claim rejection due to lapsed policies. Also, understand the grace period provided by insurers for policy renewal and ensure you renew within that specified timeframe.
3. Proper documentation
· Claims reporting: Notify the insurance company about an accident or damage promptly by submitting a duly filled claim form within the time given by the company which is usually 48 to 72 hours.
· Supporting documents: Collect and submit all necessary documents, such as FIR reports, photographs, repair bills, and medical certificates, as required by the insurer.
4. Avoid policy violations
· Driving under the influence: Driving under the influence of drugs, alcohol, or any substances that impair your judgment is not only illegal and unsafe but will also lead to claim rejection under your car insurance policy.
· Unauthorised vehicle uses: Ensure that the car is not used for illegal activities or by unauthorised individuals, as such violations can result in claim denial and also affect coverage in the future.
5. Regular maintenance
· Vehicle condition: Maintain your car in good condition, ensuring regular servicing, adherence to safety standards, and prompt repairs for wear and tear damages.
· Safety devices: Install anti-theft devices, GPS tracking systems, and other safety features that can reduce the risk of theft or accidents, increasing the chances of claim approval. Such devices also reduce the premium of car insurance and thus, are a good option to consider.
6. Proof of damage
Always keep proof of damage, like pictures and other details to be able to justify the claim. Also, pictures of any third-party damage should be taken. These not only help in claim settlement but also help in ease of reporting.
7. Avoid consequential loss
The car should not be run after an accident further causing any damage. The insurance company must be informed immediately, and one should wait for assistance from them. Any consequential loss will always be rejected by the insurer.
Conclusion
Preventing car insurance claim rejection requires proactive measures such as understanding the different types of insurance coverage, emphasising the importance of third-party insurance, and taking necessary steps to reduce claim rejection risks. Make informed decisions and choose the right third-party insurance policy for your needs.
Disclaimer: The above information is for illustrative purposes only. For more details, please refer to policy wordings and prospectus before concluding the sales.