Why are motor claims rejected?

Buying insurance for your vehicle is no guarantee that the insurer will pay for all damages. Insurers can reject claims that do not meet the company’s internal policy criteria. At times, certain avoidable mistakes are committed by consumers that make their claims invalid.

When are these totally rejected?
Insurance policies cover only accidental damages. Any vehicle part that has failed because of natural wear and tear is excluded from the scope of cover. Depending on the car’s age, a certain degree of wear and tear is attributed to its parts. If the policy is not renewed on time, companies will reject claims that occur even a day later. After the renewal date has expired, the customer will have to go through formalities like having the car inspected before being given a policy. Claims can also be rejected if the driver was found to be under the influence of alcohol when the vehicle met with an accident.

What can a customer do?
There shouldn’t be any discrepancy in documents like original insurance policy or driver’s licence.

Ensure the car is used for the purpose stated in the policy. For instance, a car meant for private use cannot be used for providing taxi services, without making the required changes in the policy document. This will also mean paying higher premiums applicable to commercial vehicles.

When buying a second-hand car, ensure the policy document has been transferred in your name. Insurers reject claims if the name on the registration certificate does not match the name on the insurance policy document. However, there is a window of 14 days after the date of transfer to make the necessary changes in the policy document.

Don’t delay reporting any accident. Though insurers use their surveyor assessing the damage within 48 hours of the accident, they may relax the rules to some extent, if reporting is done on time. Any delay for over 10 days gives rise to suspicions, and therefore, rejection.

While visiting countries like Bhutan and Nepal by car, get in touch with the insurer to include clauses making the policy valid within that particular area.

Be careful where you park the car, especially in the monsoon season. Insurers include special terms in their exclusions section, such as ‘consequential loss’. So, despite covering disasters like floods, any damage to the engine due to it or because of being parked in low-lying areas will not be covered. The customer is expected to be careful enough not to start the engine, since there would be a possibility of engine seizure. This is deemed a consequential loss, not an accidental loss.