Always read your policy document as well as the terms and conditions to understand what is and is not covered.
We all expect our auto insurance carrier to cover any claims we make during the policy’s term.
The majority of us, however, do not read the policy paper and are uninformed of the policy’s scope and exclusions.
Due to these tiny print, a claim may be denied, resulting in disappointment and financial loss.
Here are some of the reasons why a claim might be denied or not completely paid:
IDV (Insured Declared Worth): IDV is the value of your car at the time of purchase. It is the amount you will receive if your vehicle is stolen or completely destroyed.
It is strongly advised that you obtain the right IDV, which is closest to the cost of the market value of your car, since any undervaluation or overvaluation may have an influence on your claim in the future.
No Claim Bonus (NCB): This is a reward (discount) offered to the insured by the insurance company at the time of policy renewal for not filing any claim requests during the policy year.
It is critical to declare the correct claim status in order to receive accurate NCB within the range (typically between 20 and 50 percent), as incorrect declaration can result in a claim conflict. A false NCB declaration could jeopardize the settlement of a claim.
Delay in notifying the insurance company after an accident: There is a deadline by which you must notify the insurance company.
Any inordinate delay in notifying the insurance company can result in the claim being denied.
The policy contract instructs the policyholder to notify the insurer as soon as the incident occurs (accident).
It should be alright after a few days from the accident.
Driving without a license or with an expired license: The driver of the vehicle must have a current and valid driver’s license.
For example, if he possesses a two-wheeler license but is involved in an accident while driving a car, his claim will be dismissed.
The driver’s license shall not be expired, and it should be valid at the time of the accident.
Lack of insurable interest: This indicates that the owner has not transferred the registration and insurance to his name.
If your car is involved in an accident in this situation, the claim will be denied by the insurer because there is no legal transfer of ownership through the RTO.
In simple words, the policyholder must be the vehicle’s registered owner.
Modifications to the vehicle: Any modification to the vehicle, such as installing a CNG kit, installing a music system, or installing an amplifier, should be reported to the insurer, and the policyholder should pay an additional premium to have the alteration insured.
Your claim may be rejected if you do not declare these modifications.
Misrepresentation of Facts: When purchasing your policy, you must be honest about the state of your vehicle, your previous insurance history, and so on.
If you make fraudulent declarations, your policy may be deemed invalid and so cancelled by the insurance company.
Failure to renew your car insurance policy on time: If you do not renew your car insurance policy on time, your coverage will lapse.
If your car is involved in an accident in this situation, the insurance company will not evaluate the claim and will reject it.
You will be responsible for any costs out of your own pocket.
Consider the following crucial add-on covers:
Zero depreciation: In a zero depreciation automobile insurance policy, the insurance provider pays the total claim amount without taking into account the car’s depreciation.
If this option is not used, depreciation will be applied according to the slab at the time of claim.
Engine Protect: The engine protection cover is an optional add-on that allows automobile owners to protect their vehicle’s engine from loss or damage.
Only if this add-on is added to a basic vehicle coverage will this damage be covered.
This is a vital add-on to consider because it can save you a lot of money if something goes wrong.
Other reasons your claim will be rejected include:
Drunk driving is a criminal offense that will result in criminal charges.
The insurance will not process any claims you make in this situation.
- Using your personal vehicle for business purposes
- Driving outside of your insurance policy’s specified geographic area
- Finally, keep in mind that if you are claiming for the appropriate reasons, insurance providers will not reject or deny your claim.
Always read your policy document as well as the terms and conditions to understand what is and is not covered.
A little effort up front can ensure that you are well-informed and understand your insurance policy, reducing the likelihood of a claim being denied later.
