We hear stories of sham insurance claims all the time in the news and they are increasing by the day. In most cases, career criminals are leaching to this kind of felony as a key source of illicit income. Over the decades there have been some really high profile occurrences of exposed scams including the infamous ‘Sukumara Kuruppu’ case in which he faked his own death by murdering his business partner in a ‘car accident’ for insurance money.
On the other hand, it can be overwhelming to be involved in a car accident, bear expenses of car repair, personal treatment, property damage or third party injury, if any, only to receive a denial from your insurance provider. Do not disregard the rejection or panic. Sometimes the reason could be as trivial as a miscalculation in coding or a factual error. With veracious paperwork and an in-depth understanding of your car insurance policy, you can even accelerate the procedure.
Listed below are top reasons why your car insurance claim can be rejected by insurance companies:
- Normal Wear & Tear:
- Consequential Damage:
- Personal Car Insurance Vs Commercial Car Insurance
- Intoxicated Driver:
Natural deterioration due to regular use of a car is not avoidable and hence you cannot be indemnified against this. This wear and tear consists of weakening of engine, scuffing of brake, suspension, peeling of paint or slight abrasion of the interiors as well as minor dents or nicks to the exterior while use.
Consequential Damage occurs when you use your car despite clear red flags. Driving along a flooded road when there is another option, knowing that it can lead to engine failure is one instance. Insurance companies show zero tolerance to claims of this nature.
If you have bought a personal car insurance, but the accident has occurred when you were using your car for commercial purpose (like hiring it out as a cab or use for official trip), then your claim will be rejected without a second thought.
Driving under the influence of alcohol or drugs is a crime. And insurance companies will only be happy to toss your claim to reject list if this allegation is proved.
It would be unfair to curse and rave about your insurance company’s hardheartedness when there were many incidents in the past that made them extra vigilant. It would be a while before we all forget the notorious Lord Brocket case, in which Mr. Brocket dismantled his Ferrari and Maserati and sold the parts at black market before reporting the cars stolen to the insurance company.
We must remember that insurance companies’ bread and butter is mainly claim rejections. Delaying accident reporting, different names on RC and insurance policy, mishap occurring outside the policy’s geographical realm can all be causes for denial. So it is important to make our claim foolproof and honest so that there is no chance of rejection. Of course if you feel that your claim is unfairly overruled, you have an option to file an appeal.
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GST Update: GST of 18% is applicable on car insurance effective from the 1st of July, 2017