Your auto insurance claims may be rejected! Here is when
By Rakesh Kaul
We all expect our auto insurance company to indemnify any claims that arise during the term of the policy. However, most of us do not read the policy document and are not familiar with the scope of our policy and the exclusions. A claim can be dismissed on the basis of these fine print, resulting in disappointment and financial loss. Here are some reasons that could lead to the rejection or complete non-payment of the application:
Declared insured value (IDV): IDV is the value of your vehicle at the time the insurance is purchased. This is the amount you will get in the event of theft or total loss of your vehicle. It is strongly recommended that you obtain the correct IDV that most closely approximates the cost to market value of your vehicle, as any undervaluation or overstatement may affect the claim in the future.
No Claim Bonus (PNE): This is a reward (discount) granted by the insurance company to the insured at the time of renewal of the policy, for not having made claims during an insurance year. It is very important to report the correct claim status to get an accurate SOP according to the range (usually 20-50%), as a wrong report can lead to a conflict at the time of the claim. A false statement by BCN may adversely affect the settlement of the claim.
Delay in the notification of the complaint: After an accident, there is a deadline before which you must notify the insurance company. Any excessive delay in informing the insurance company may result in the rejection of the claim. The insurance contract advises the policyholder to immediately inform the insurer upon the occurrence of the event (accident). A few days after the accident, you should be fine.
Driving without a license / invalid license: The driver of the vehicle must have a valid and valid license. For example, if he has the license to drive a two-wheeler, but encounters an accident while driving a car, the claim will be refused. The license must not expire and must be in effect on the date and time of the accident.
No insurable interest: This means that the owner has not transferred the registration and insurance to his name. In such a case, if your vehicle suffers an accident, the claim will not be taken care of by the insurer, as there is no legal transfer of ownership through the RTO. Simply put, the policy holder should be the registered owner of the vehicle.
Modifications to the vehicle: Any modification made to the vehicle for, for example, the installation of a CNG kit, the installation of a music system, an amplifier, etc. must be reported to the insurer and the policyholder must be covered by the payment of an additional premium. If you do not report these changes, your request may be rejected.
False statement of facts: When you buy your policy, you need to be open about the condition of your car, your insurance history, etc. Making false statements could lead to your policy being considered invalid and therefore canceled by the insurance company.
Missing an insurance renewal: Failure to renew your auto insurance policy on time will cause your policy to lapse. In such a situation, if your car gets into an accident, the insurance company will not consider the claim and reject it. You will have to bear all the expenses out of your pocket.
Some important additional covers to consider:
Zero depreciation: In an auto insurance policy without depreciation, the full amount of the claim is paid by the insurance company without taking into account the depreciation on the value of the car. If this coverage is not chosen, then the amortization will be applicable according to the slab at the time of the loss.
Motor protection: Engine Guard Cover is an add-on available for car owners to protect their vehicle’s engine from uncertain loss and damage. This damage is only covered if this supplement is attached to the basic vehicle policy. This is an important addition to consider, as it can save you a lot of money in the event of damage.
Other points where your request will be rejected:
Driving while intoxicated is a legal offense, and it will lead to you facing criminal charges. In such a case, the insurer will not process any claim that you raise.
Use of your private car for commercial purposes
Drive outside the specified geographic area defined in your insurance policy
In conclusion, keep in mind that insurance companies don’t reject or deny claims if you make a claim for the right reasons.
Always remember to read your policy document and policy terms and conditions to find out what is included and what is not. A little work at the beginning will ensure that you are well informed and clear about your insurance policy, thus avoiding the rejection of the claim afterwards.
(The author is Director of Distribution, Edelweiss General Insurance. Opinions expressed are personal. Please read the offering document carefully before purchasing an insurance policy.)