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Why a car insurance claim is denied

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When you raise a claim after a car accident, you would be in anticipation of that money for the payment of your medical bills and other associated costs. However, things may not always happen as per your expectations. Many a times, people face situations where their car insurance claim is rejected. If that happens to you, you need to identify the reason for the same, so as to not encounter such a situation in the future.

Listed below are some of the common reasons that insurers provide for the refusal of claims:

  1. Expired car insurance policy

    When you are in possession of a new car, you are likely to keep the car under the cover of an insurance. But as the years pass, there may be an instance where you forget to renew your insurance. This should be taken seriously, as the absence of an insurance exposes you to the risk of an accident without a cover. The insurance provider will reject your claim even if the mishap occurred one day after the date of policy expiry.

  2. Delay in filing the claim

    In case your vehicle has met with an accident it is prudent to report the mishap as soon as possible. If there is a delay in filing claims, most insurers tend to reject the same.

    Usually, insurers provide a window of 24 to 48 hours for the accident to be reported. Additionally, insurance companies always reject a claim if the driver drove the car right after the accident, subsequently causing further damage to the vehicle.

  3. Consequential damages

    To understand this, let us take the instance of a car having a damaged part that is not covered under insurance. In case this part causes a damage to another part of the car (that is covered under the policy), the insurer will not cover the latter damage, as this has occurred due to a consequential effect.

  4. Driving under the influence of intoxicants

    If you meet with a car accident while driving under intoxication, there is no question of raising claims for the reimbursement of damages.

  5. Driver not able to produce a valid license at the time of the accident

    Every driver operating a motor vehicle on Indian roads are mandated by the law to be in possession of a valid driving license. In the case of an accident, if the driver was found to not have a valid license, insurance claims cannot even be raised. Having an expired license is equivalent to having no license at all.

  6. Not informing the insurer before repairs on the car

    If your car is involved in an accident, it is crucial to inform your insurance provider of the same, at the earliest. If you get the vehicle repaired on your own, and then intimate the insurer, they will be unable to trace back the scenario in which the accident took place. In this situation, irrespective of the cost of repair of the car, you stand to face a complete rejection of the claim.

    So, it is vital to get an authorised person from your insurance company to perform a detailed survey of your damaged car before you initiate any repairs on it.

  7. Car insurance policy not in your name

    When the vehicle involved in the accident is a used or second-hand car, and the auto insurance has not been transferred to the name of the new owner, there will be rejections in claims.

    The new owner needs to get the vehicle registered in his name and carry the registration certificate (RC) in the car. He also needs to ensure that the name in the car insurance policy matches with that in the RC, so as to avoid the chance of a claim refusal.

  8. Vehicle used beyond limits

    Insurance providers reject claims if the vehicle involved in the accident was found to be used beyond its limits in an inappropriate manner.

  9. Installations that were added after the original policy was bought

    If you have installed an accessory in your car that was not declared during the purchase of the insurance policy, there is a chance that your claim will be rejected by the insurer. This is likely to happen, irrespective of whether the damage is associated with the new accessory or not.

  10. Accident occurs beyond geographical limits cited in the insurance policy

    The IRDA defines two geographical zones for motor insurance. Metro cities like Mumbai, Chennai, Kolkata and Delhi come under Zone A, and the rest of the country is considered as Zone B. If your car meets with an accident in a zone that is not defined in your insurance policy, you stand a chance of facing a claim refusal.

  11. Claims pertaining to regular wear and tear

    Usually, comprehensive auto insurance policies only cover collisions, thefts, third-party liability and damages due to natural calamities. You will not be able to claim for repairs done due to regular wear and tear of the vehicle.

  12. Inappropriate use of vehicle in extreme conditions

    Overloading a car with more passengers than the prescribed limit, parking in no-parking zones, and not getting the vehicle serviced regularly are some examples of inappropriate use of the car. In case your vehicle was involved in an accident while it was being used inappropriately, the chances of your insurance claim getting rejected are high.

Getting involved in a car accident is definitely a devastating experience. It is followed by payments for the repair of the vehicle and for bearing personal and third-party injuries. In such a situation if your car insurance claim is rejected or is not honoured 100%, you will be highly taxed. So, it is important to be aware of what is covered under your auto insurance policy and follow timely renewal of the policy in order to avoid claim refusals.

GST Update: GST of 18% is applicable on car insurance effective from the 1st of July, 2017

Claim Reviews

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    0.5 4.5/5 "Excellent!"
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    "Good"
    0.5 5.0/5 "Blown Away!"
    My car insurance was recently purchased with New India Assurance through online. When I logged into the online site it gives better option with multiple insurer and I felt New India Assurance is good with reasonable premium and better benefits. I have paid 13,500 rupees for a year. I got the insurance paper. The claim experience is very good.
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    , hyderabad
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  • ICICI Lombard Car Insurance
    "Good Policy."
    0.5 3.0/5 "Satisfactory"
    I have bought my car insurance with ICICI Lombard for last 5 years which I'm continuing for with the same company. The claim experience was better and when i applied for the same, they have given upto 80%. Its covered with bumper to bumper facility. They have given the claim in 1 week.
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    , bangalore
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    "Good policy "
    0.5 5.0/5 "Blown Away!"
    My car insurance was purchased in the year 2014 with Royal Sundaram. My dealer has recommended me about this policy. I pay the premium amount of Rs. 14000 with the coverage value of Rs. 6.27 lakhs which covered with the bumper to bumper facility.
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    , ahmedabad
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    I had taken this insurance policy a while back and the premium amount has been quite good and not too high. The payment method has been easy and there has not been any sort of charges, and the policy covers bumper to bumper. Their customer support has also been responsive and was helpful as well.
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    0.5 4.0/5 "Great!"
    There was no claim experience for my Tata Tiago with ICICI Lombard. I have renewed the car policy at last june, I paid the amount around Rs. 10,600 because its around 1.5 year old vehicle. I took comprehensive plan which includes loss , damage, ICICI Lombard got tie up many showroom.
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  • ICICI Lombard Car Insurance
    "Best cover"
    0.5 4.0/5 "Great!"
    Very recently I took policy from Car insurance for my new Baleno car, it was done by ICICI bank, they deducted insurance fee from the loan. The loan department issued the policy copy on time. For first year its 100% coverage available its a bumper to bumper with ex showroom.
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    , new delhi
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  • ICICI Lombard Car Insurance
    "Good Car Insurance policy"
    0.5 4.0/5 "Great!"
    I have selected the ICICI Lombard for my car since the dealer has given me this insurance. I have been paying the premium amount of Rs. 15000. This is not covered for the bumper to bumper facility. They have given me a IDV value of Rs, 3.10 lakhs. They are providing the good garage facility all over the city.
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    , bangalore
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    "Yet to experience the policy"
    0.5 3.0/5 "Satisfactory"
    I have applied the claim for my car recently. I have given the car into the showroom and they have asked me to inform in the insurance company. When i visited other branch they have asked me to the home branch. They have given me a sufficient IDV value. Its covered with a bumper to bumper facility.
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    , chennai
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  • ICICI Lombard Car Insurance
    "Reliable Policy"
    0.5 5.0/5 "Blown Away!"
    Purchased my car insurance through ICICI Lombard and They have given me a low premium since i have taken a loan from ICICI bank. They have given me a good IDV value. This is a bumper to bumper covered policy. They have given me a road side assistance, no claim bonus benefits.
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    , chennai
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  • National Insurance Car Insurance
    "Good Insurance"
    0.5 3.0/5 "Satisfactory"
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    , bhubaneshwar
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  • ICICI Lombard Car Insurance
    "Competitive price"
    0.5 5.0/5 "Blown Away!"
    I have taken a car insurance from ICICI Lombard and the service is really good. I spoke wtih the customer care once for the claim. The garage people taken care of the full settlement process. The premium amount is nominal. They have given me a best claim what they can offer according to their norms.
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  • Royal Sundaram Car Insurance
    "Economic offering and wide accessibility"
    0.5 5.0/5 "Blown Away!"
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    , bangalore
    Reviewed on Jan 21, 2019
  • Royal Sundaram Car Insurance
    "Average"
    0.5 3.0/5 "Satisfactory"
    I took my car insurance with Royal Sundaram. I never contacted the customer service. It is a default insurance from the showroom. The premium is high because I go for bumper to bumper offer, road side assistance, zeo dep. It is a first party insurance and no claim. The policy period is one year.
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    , bangalore
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    "Good Policy"
    0.5 4.0/5 "Great!"
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    , new delhi
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  • National Insurance Car Insurance
    "Smart protection with National"
    0.5 4.0/5 "Great!"
    The major factor to chose National Insurance because of the premium is economic, I took the policy for 3 years the IDV value remains the same for the whole tenure. The customer support is good on time they activated the policy. I have Tata Tiago , its around four months vehicle. Its zero depreciation comprehensive plan. I taken the policy through showroom.
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  • ICICI Lombard Car Insurance
    "Satisfied with the policy"
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    My car insurance is with ICICI Lombard. The customer services are good and I got the policy documents on time. The policy coverage is good and there are features of a road side assistance is there. The premium is economical too. Good overall.
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    , bangalore
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  • ICICI Lombard Car Insurance
    "Need to reduce the premium"
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    I had a car insurance from ICICI LOMBARD which was offered by the showroom at the time of purchasing the vehicle. I felt the insurance premium is very high compared to others. I got a reminder call from the customer service at the time of renewal. It has zero dep for one year.
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    , new delhi
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  • Tata AIG Car Insurance
    "Excellent"
    0.5 5.0/5 "Blown Away!"
    I took my car insurance from TATA AIG through online channel. They have given lesser premium with zero dep and it includes road side assistance. The customer service is very good. The policy period is one year. I have no claim experience. It is a first party insurance.
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    , new delhi
    Reviewed on Jan 19, 2019
  • Tata AIG Car Insurance
    "Satisfied policy"
    0.5 5.0/5 "Blown Away!"
    TATA AIG is the best company to take the car insurance. Since long time i have taken this insurance. The customer care people used to call me to renew the policy and they used to policy renewal letter. I will do payment through online. Several times i have claimed the policy and i have received very good response.
    Was this review helpful? 1
    , hyderabad
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