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Can Auto Insurance Claim Be Rejected?

IndianMoney.com Research Team | Updated On Wednesday, March 16,2016, 06:00 PM
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Can Auto Insurance Claim Be Rejected?

Your comprehensive auto insurance plan, covers you for both third party liability, as well as own damage. If your car meets with an accident and damages the car of another citizen or injures him (unrelated third party), the auto insurance plan settles the claim. Since you have availed a comprehensive auto insurance plan, you are also covered for the damage suffered by your car, or compensation if your dream car has been stolen.

Too good to be true….  there’s a small catch. Sometimes your auto insurance claim may be rejected.

Do you have a driving license?

You don’t have a valid driving license and meet with an accident. This could be your worst nightmare. To have your motor Insurance claim settled, make sure you have a valid driving license. This is one of the important requirements, under the Motor Vehicle Act and Insurance Policy. Your car might be insured. However this alone does not guarantee you settlement, on your motor Insurance claim.

If at the time of the accident, you did not hold a valid driving license or your friend who was driving (any other person who was driving), did not have a valid driving license, or the validity of your driving license had expired, or even if the driving license was not for that particular class of vehicle, then your motor Insurance claim will not be settled by the insurer.

Met with an accident. Intimate your insurer immediately

Your car is insured and you have met with an accident. Make sure you intimate your insurer immediately, to settle your claim. If you delay informing your insurer on the accident, the insurer may lose the opportunity to confirm relevant facts on the accident. How would your insurer know who was at fault and who committed the accident? Your insurance surveyor would find it very difficult to estimate the loss you suffer, due to damage on your car. Has your dream car been stolen? Register an FIR at the police station immediately. This would ease the motor insurance claim settlement process.

Have you overloaded your car?

Your car has a maximum number of passengers, it is permitted to carry. Make sure you do not exceed this limit. Your family…your extended family…your neighbors, all of them travel in your car. If you treat your dream car like a tractor and overload it…well your auto insurance claim may get rejected.  The insurer perceives that you met with an accident, because you lost control of your car as it was overloaded.

Have you registered your car?

You need to register your dream car with the concerned registering authority, as per the Motor Vehicle Act. You need to complete all registration formalities before you drive your car on the road (in a public place). If your car is unregistered and meets with an accident, your auto insurance claim will not be settled.

You try to cheat your insurer

Your car has been damaged in an accident. You need to provide an accurate assessment of your loss (damage suffered by the car), to the insurer. This holds true even for third party injury and damages. If you try to cheat your insurer by providing false information and misleading details, your auto insurance claim could be rejected.

You use your car for commercial purposes

Your car has been registered for private use. It has to be used only for private , social and pleasure travel. You want to make some quick money…. You use your car for commercial purposes… A part time goods carrier. If your car meets with an accident, your auto insurance claim would be rejected.

So be wise. Your dream car costs a lot. In today’s uncertain World an accident happens anywhere, anytime. Repairing your car costs a lot. So make sure you do everything possible, to make sure your auto insurance claim does not get rejected.

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IndianMoney.com Research Team

The research team at IndianMoney.com comprises of certified and experienced professionals who share the company's vision to make every Indian financially literate by equipping every Indian with right and unbiased advice. IndianMoney.com research team provides newsletters, articles, videos and FAQs on various financial products and concepts only to help you make wise financial decisions.

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