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8 Common Causes for Auto Insurance Claims Rejection

19 September, 2016

Third party auto insurance is mandatory in India, but many owners choose comprehensive coverage because repairs to vehicles can be very expensive and coverage can reduce this financial burden.

Unfortunately, most people do not completely understand what is offered under such comprehensive coverage plans. It is important that you read the fine print and ascertain scenarios or expenses that are actually covered or excluded. Do not wait until an expense arises, only to find that your claim has been rejected.

Some of the common causes for auto insurance claim rejection include the following:

1.      Read the claim form carefully before applying for a claim. Be it cashless or reimbursement, reading the minutes of the form is a must.

2.      Intimate the insurer about the accident or vehicle loss within 48 hours.

3.      Sometimes people forget to transfer the name on the car insurance policy when they purchase a used car. This makes the policy null and void, and claims are therefore rejected.

4.      Installation of LPG or CNG kit that is not covered under the insurance policy can result in rejection, even if the damage is caused by an insured peril.

5.      The driver should hold a valid license at the time of the accident for claims to be processed. Moreover, if the driver is under the influence of alcohol or any illegal substance, the claim is rejected.

6.      Owners who acquire a car insurance plan for personal use, but use the car as a commercial vehicle will often find their claims rejected by the insurer.

7.      Consequential loss claims are also rejected. For example, the engine is damaged due to a collision and you continue driving the vehicle. This causes further engine damage resulting in consequential loss, which is not covered.

8.      Claim arising due to vehicle theft from unsecured parking lot or accidents where the seating capacity was exceeded the permissible limit will be rejected.

For this reason it is important to be aware of the inclusions and exclusions under a policy. This will help to avoid any unpleasant experience and unnecessary losses later on. For comprehensive coverage, check out Royal Sundaram’s Car Shield plan. It offers many benefits, such as roadside assistance and complete price coverage, while all exclusions are made clear on the company website.