Using private car as a cab can lead to insurance claim rejection

Insurance companies are trying to simplify the motor insurance claims process. HDFC ERGO General Insurance recently integrated artificial intelligence-enabled inspection technology into its WhatsApp chatbot. This will allow customers to instantly settle claims for minor damages of up to Rs 20,000. Online platform Policybazaar launched a Claim Assurance Programme under which it will provide customers with a dedicated claim manager and vehicle pick-up and towing to network garages. On their part, customers should be mindful of factors that can lead to motor claim rejections and take steps to avoid them.

 

Reasons for claim denial
 

If a policyholder files a fraudulent claim to get undue benefits from the policy, the insurer will reject the claim. “If a claim is beyond the policy risk period, the insurer will reject it,” says Parthanil Ghosh, director and chief business officer, HDFC ERGO General Insurance.
 

Motor insurance is sold for specific vehicle categories. “If you buy insurance for a private car, use this car as a cab and then have an accident, your claim will be rejected,” says Animesh Das, chief executive officer, Acko General Insurance.
 

Driving without even a third-party policy can lead to claim rejection. “According to the Motor Vehicles Act, every customer must have a valid third-party policy. If a customer files a claim without one, it will be rejected,” says Sandeep Saraf, head-motor insurance renewals, claims & customer experience, Policybazaar.com.

 

Vehicles must be driven on public roads in compliance with the Motor Vehicles Act.“Driving a vehicle without registration, driving under the influence of alcohol or without a valid licence can lead to claim rejection,” says Ghosh. 

 

Exclusions to be aware of
 

If a customer owns only a third-party policy, damage to their own car will not be covered. “Only damage to the person or property of a third party will be covered,” says Saraf.
 

Customers with a comprehensive policy (third party plus own damage) can also face a few exclusions. “If several parts get damaged in an accident and you own a standard policy, the insurer will apply depreciation to the bill, which means you may have to pay 25-30 per cent out of your own pocket,” says Das. Insurance also does not cover general maintenance and normal wear and tear.
 

Another exclusion relates to flooding. “If water enters the engine causing a hydrostatic lock, this damage is not covered by a standard policy. It is only covered if you have the engine protect add-on,” says Das.

 

Precautions to exercise
 

Avoid violating traffic rules. “Ignoring traffic conditions, over-speeding, over-taking, driving on the wrong side, and exceeding seating capacity must be avoided,” says Gaurav Arora, head corporate underwriting & claims, ICICI Lombard. He adds that one should be wary of allowing someone, who does not have a valid licence, to drive your car. Saraf says customers must notify the insurer about any incident within 24 to 72 hours.
 

If you modify the vehicle by installing a CNG kit, inform the insurer. “These modifications should be reflected in the car’s registration certificate and reported to the insurer,” adds Saraf. Avoid misrepresenting facts. Also, do not attempt to pass off older damages as part of the current claim. Do not get repair work started without informing the insurer as the latter like to carry out end-to-end verification of damages and documents before approving a claim. Das cautions against driving the car after it has got damaged. He suggests getting it towed. Arora suggests buying a comprehensive policy with all the relevant add-ons such as road side assistance, return-to-invoice, engine protect, zero depreciation, and so on.